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SHENZHEN DOBOT CORP LTD
深圳市越疆科技股份有限公司
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code: 2432
GLOBAL
OFFERING
Joint Sponsors, Joint Sponsor-Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
SHENZHEN DOBOT CORP LTD
ʮ̡
(A joint stock company incorporated in the People’s Republic of China with limited liability)
GLOBAL OFFERING
Total number of Offer Shares under the Global
Offering
: 40,000,000 H Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 2,000,000 H Shares (subject to reallocation)
Number of International Offer Shares : 38,000,000 H Shares (subject to reallocation and the
Over-allotment Option)
Maximum Offer Price : HK$20.80 per H Share, plus brokerage of 1%, SFC
transaction levy of 0.0027%, Stock Exchange
trading fee of 0.00565% and AFRC transaction levy
of 0.00015% (payable in full on application and
subject to refund on final pricing)
Nominal value : RMB1.00 per H Share
Stock code : 2432
Joint Sponsors, Joint Sponsor-Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
PA SECURITIES (HK)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no
responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability w hatsoever for
any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies in Hong Kong and Avai lable
on Display” in Appendix V to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the
Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or any of the other documents referred to above. The Offe r Price
is expected to be fixed by agreement between the Overall Coordinators, on behalf of the Underwriters, and our Company on or about Thursday, December 19 , 2024
or such later time as may be agreed between the parties, but in any event, no later than 12:00 noon on Thursday, December 19, 2024. If, for any reason, the O verall
Coordinators, on behalf of the Underwriters, and our Company are unable to reach an agreement on the Offer Price by 12:00 noon on Thursday, December 19,
2024, the Global Offering will not become unconditional and will lapse immediately.
The Overall Coordinators, on behalf of the Underwriters, may, with the consent of our Company, reduce the indicative Offer Price range below that
stated in this prospectus (being HK$18.80 per H Share to HK$20.80 per H Share) at any time on or prior to the morning of the last date for lodging
applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the number of Hong Kong Offer Shares and/or the
indicative Offer Price range will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at www.dobot.cn (with
respect to Chinese version) and www.dobot-robots.com (with respect to English version) as soon as practicable but 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. For further information, see the sections headed
“Structure and Conditions of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Offer Shares, the Overall Coordi nators
on behalf of the Hong Kong Underwriters, have the right in certain circumstances, in their absolute discretion, to terminate the obligation of the Hon g Kong
Underwriters pursuant to the Hong Kong Underwriting Agreement at any time prior to 8:00 a.m. on the Listing Date. Further details of the terms of the ter mination
provisions are set out in the section headed “Underwriting—Underwriting Arrangements and Expenses—Hong Kong Public Offering—Grounds for Termina tion.”
It is important that you refer to that section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be
offered, sold, pledged or transferred, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S.
Securities Act and in accordance with any applicable U.S. state securities laws. The Offer Shares are being offered and sold only outside of the United
States in offshore transactions in reliance on Regulation S.
Our Company is a Specialist Technology Company (as defined in Chapter 18C of the Listing Rules). The securities of Specialist Technology Companies
carry high investment risks including risks of share price volatility and inflated valuation due to the difficulty in valuing such companies. Invest ors
should fully understand the investment risks of a Specialist Technology Company and the risks disclosed by our Company before making their investmen t
decisions.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the
public in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our websites at www.dobot.cn (with respect to Chinese
version) and www.dobot-robots.com (with respect to English version).
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
December 13, 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 Stock Exchange at www.hkexnews.hk under
the “ HKEXnews > New Listings > New Listing Information ” section, and our websites at
www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com (with respect to
English version). If you require a printed copy of this prospectus, you may download and print from
the website addresses above.
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
Service .......
www.eipo.com.hk Investors who would like to receive
a physical Share certificate.
Hong Kong Offer Shares
successfully applied for will be
allotted and issued in your own
name.
You may submit your application to
the White Form eIPO Service
Provider at www.eipo.com.hk
(24 hours daily, except on the
last application day) from 9:00
a.m. on Friday, December 13,
2024 until 11:30 a.m. on
Wednesday, December 18,
2024 and the latest time for
completing full payment of
application monies in respect of
such applications will be 12:00
noon on Wednesday, December
18, 2024 (Hong Kong time).
HKSCC EIPO
channel ......
Your broker or
custodian who is a
HKSCC Participant
will submit
electronic
application
instructions on your
behalf through
HKSCC’s FINI
system in accordance
with your instruction
Investors who would not like to
receive a physical 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.
You are advised to contact your
broker or custodian for the
earliest and latest time for giving
such instructions, as this may
vary by broker or custodian.
We will not provide any physical channels to accept any application for the Hong Kong Offer Shares
by the public. The contents of the electronic version of this prospectus are identical to the printed
prospectus as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or principals, as
applicable, that this prospectus is available online at the website addresses above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in this prospectus for
further details of the procedures through which you can apply for the Hong Kong Offer Shares
electronically.
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IMPORTANT


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Your application through the White Form eIPO service or the HKSCC EIPO channel must be made
for a minimum of 200 Hong Kong Offer Shares and in multiples of that number of Hong Kong Offer
Shares as set out in the table below. No application for any other number of Hong Kong Offer Shares will
be considered and such an application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the table below for the
amount payable for the number of Shares you have selected. You must pay the respective amount payable
on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.
SHENZHEN DOBOT CORP LTD
(HK$20.80 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES
THAT MA Y BE APPLIED FOR AND PA YMENTS
N o .o fH o n g
Kong Offer
Shares applied
for
Maximum
Amount
payable (2) on
application/
successful
allotment
N o .o fH o n g
Kong Offer
Shares applied
for
Maximum
Amount
payable (2) on
application/
successful
allotment
N o .o fH o n g
Kong Offer
Shares applied
for
Maximum
Amount
payable (2) on
application/
successful
allotment
N o .o fH o n g
Kong Offer
Shares applied
for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
200 4,201.96 3,000 63,029.30 40,000 840,390.72 300,000 6,302,930.40
400 8,403.90 4,000 84,039.07 50,000 1,050,488.40 350,000 7,353,418.80
600 12,605.87 5,000 105,048.85 60,000 1,260,586.08 400,000 8,403,907.20
800 16,807.81 6,000 126,058.61 70,000 1,470,683.75 450,000 9,454,395.60
1,000 21,009.77 7,000 147,068.38 80,000 1,680,781.45 500,000 10,504,884.00
1,200 25,211.72 8,000 168,078.14 90,000 1,890,879.12 600,000 12,605,860.80
1,400 29,413.68 9,000 189,087.91 100,000 2,100,976.80 700,000 14,706,837.60
1,600 33,615.63 10,000 210,097.68 150,000 3,151,465.20 800,000 16,807,814.40
1,800 37,817.59 20,000 420,195.35 200,000 4,201,953.60 900,000 18,908,791.20
2,000 42,019.53 30,000 630,293.05 250,000 5,252,442.00 1,000,000
(1) 21,009,768.00
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, 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) and the
SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange (in the case of
the SFC transaction levy and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the SFC
and the AFRC respectively).
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 websites of the Stock Exchange
at www.hkexnews.hk and our websites at www.dobot.cn (with respect to Chinese version) and
www.dobot-robots.com (with respect to English version).
Time and date (1)
Hong Kong Public Offering commences .................................... 9:00 a.m. on
Friday, December 13, 2024
Latest time to complete electronic applications under
White Form eIPO service through the designated
website www.eipo.com.hk (2) .................. 11:30 a.m. on Wednesday, December 18, 2024
Application lists open (3) ....................... 11:45 a.m. on Wednesday, December 18, 2024
Latest time to (a) give electronic application instructions to
HKSCC and (b) complete payment of White Form eIPO
applications by effecting internet banking transfer(s) or PPS
payment transfer(s) (4) ............................................... 12:00 noon on
Wednesday, December 18, 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 ...................... 12:00 noon on
Wednesday, December 18, 2024
Expected Price Determination Date
(5) ......................... Thursday, December 19, 2024
Announcement of:
• the Offer Price;
• an indication of the level of interest in the International Offering;
• the level of applications in the Hong Kong Public Offering; and
• the basis of allocation of the Hong Kong Offer Shares
to be published and on the websites of the Stock Exchange at
www.hkexnews.hk and our Company at www.dobot.cn
(with respect to Chinese version) and www.dobot-robots.com
(with respect to English version) at or before (6)(10) ......................... 11:00 p.m. on
Friday, December 20, 2024
EXPECTED TIMETABLE
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of channels,
including:
• in the website of the Stock Exchange at www.hkexnews.hk
and the Company’s websites at www.dobot.cn
(with respect to Chinese version) and
www.dobot-robots.com (with respect to English version)
respectively (8) ........................................n o later than 11:00 p.m.
on Friday, December 20, 2024
• in the designated results of allocations website at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
“search by ID” function (8) ..................................... from 11:00 p.m.
on Friday, December 20, 2024
to 12:00 midnight
on Thursday, December 26, 2024
• from the allocation results telephone enquiry line by
calling +852 2862 8555 between 9:00 a.m. and 6:00 p.m. .... from Monday, December 23, 2024
to Monday, December 30, 2024
(excluding Saturday, Sunday and
public holidays in Hong Kong)
For those applying through HKSCC EIPO channel,
you may also check with your broker or custodian from ....................... 6:00 p.m. on
Thursday, December 19, 2024
Dispatch of H Share certificates or deposit of the H Share certificates
into CCASS in respect of wholly or partially successful applications
pursuant to the Hong Kong Public Offering on or before
(6) .......... Friday, December 20, 2024
Dispatch of White Form e-Refund payment
instructions/refund cheques (if applicable) on or before (9)(11) ....... Monday, December 23, 2024
Dealings in H Shares on the Main Board of the
Stock Exchange to commence at ........................................ 9:00 a.m. on
Monday, December 23, 2024
(1) All times and dates refer to Hong Kong local time and date, except as otherwise stated. Details of the structure of the Global
Offering, including its conditions, are set out in “Structure and Conditions of the Global Offering” in this prospectus. If there
is any change in the above expected timetable, we will issue a separate announcement in Hong Kong to be published on our
websites at www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com (with respect to English version)
and the website of the Stock Exchange at www.hkexnews.hk .
(2) You will not be permitted to submit your application under the White Form eIPO service through the designated website at
www.eipo.com.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.
EXPECTED TIMETABLE
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(3) If there is a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal and/or Extreme
Conditions in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, December 18, 2024, the application
lists will not open and close on that day. See “How to Apply for Hong Kong Offer Shares—E. Severe Weather Arrangements.”
(4) Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer
to “How to Apply for Hong Kong Offer Shares—2. Application Channels.”
(5) The Price Determination Date is expected to be on or around Thursday, December 19, 2024. If, for any reason, the Offer Price
is not agreed between the Overall Coordinators and the Joint Global Coordinators (for themselves and on behalf of the
Underwriters) and our Company by 12:00 noon on Thursday, December 19, 2024, the Global Offering will not proceed and
will lapse.
(6) The H Share certificates are expected to be issued on Friday, December 20, 2024 but will only become valid evidence of title
provided that the Global Offering has become unconditional in all respects and neither of the Underwriting Agreements has
been terminated in accordance with its terms, which is scheduled to be at around 8:00 a.m. on Monday, December 23, 2024.
Investors who trade H Shares on the basis of publicly available allocation details before the receipt of H Share certificates
and before they become valid evidence of title do so entirely of their own risk.
(7) The announcement will be available for viewing on the Stock Exchange’s website www.hkexnews.hk and our Company’s
websites at www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com (with respect to English version).
(8) None of the websites or any of the information contained on the websites forms part of this prospectus.
(9) Applicants being individuals who are eligible for personal collection must not authorize any other person to make collection
on their behalf. If you are a corporate applicant which is eligible for personal collection, your authorized representative must
bear a letter of authorization from your corporation stamped with your corporation’s chop. Both individuals and authorized
representatives must produce, at the time of collection, evidence of identity acceptable to the H Share Registrar. Applicants
who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to the paragraph headed “How
to Apply for Hong Kong Offer Shares—D. Despatch/Collection of H Share Certificates and Refund of Application Monies”
in this prospectus for details.
(10) Applicants who apply through the White Form eIPO service by paying the application monies through a single bank
account, may have White Form e-Refund payment instructions (if any) dispatched to their application payment bank
account. Applicants who apply through the White Form eIPO service by paying the application monies through multiple
bank accounts, may have refund cheques in favor of the applicant (or, in the case of joint applications, the first-named
applicant) sent to the address specified in their application instructions by ordinary post and at their own risk.
(11) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful
applications and in respect of wholly or partially successful applications if the Offer Price is less than the price per Offer
Share payable on application.
The H Share certificates will only become valid evidence of title provided that the Global Offering
has become unconditional in all respects and neither of the Hong Kong Underwriting Agreement nor the
International Underwriting Agreement is terminated in accordance with its respective terms prior to 8:00
a.m. on the Listing Date. The Listing Date is expected to be on or about Monday, December 23, 2024.
Investors who trade the H Shares on the basis of publicly available allocation details prior to the receipt
of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so entirely
at their own risk.
The above expected timetable is a summary only. Potential investors should read carefully
“Underwriting,” “Structure and Conditions of the Global Offering” and “How to Apply for Hong Kong
Offer Shares” for details relating to the structure and conditions of the Global Offering, procedures on the
applications for Hong Kong Offer Shares and the expected timetable, including conditions, effect of bad
weather and the dispatch of refund cheques and H Share certificates.
EXPECTED TIMETABLE
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This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the Hong Kong Offer Shares. This prospectus may not be used
for the purpose of, and does not constitute, an offer or invitation in any other jurisdiction or in any
other circumstances. No action has been taken to permit a public offering of the Offer Shares or the
distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this
Prospectus for purposes of a public offering and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under applicable
securities laws of such jurisdictions pursuant to registration with, or 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. Our Company has not authorized anyone to provide you with information that is different
from what is contained in this prospectus. Any information or representation not made in this
prospectus must not be relied on by you as having been authorized by our Company, the Overall
Coordinators, the Joint Global Coordinators, the Joint Sponsors, any of the Underwriters, any of our
or their respective directors, officers, representatives, or affiliates, or any other person or party
involved in the Global Offering. Information contained in our websites, located at www.dobot.cn
(with respect to Chinese version) and www.dobot-robots.com (with respect to English version), does
not form part of this prospectus.
Page
Expected Timetable ....................................................... i i i
Contents ............................................................... v i
Summary ............................................................... 1
Definitions .............................................................. 1 3
Glossary ............................................................... 2 3
Forward-Looking Statements ............................................... 2 6
Risk Factors ............................................................ 2 8
Waivers from Strict Compliance with the Requirements under the Listing Rules ........ 6 2
Information about this Prospectus and the Global Offering ........................ 6 6
Directors, Supervisors and Parties Involved in the Global Offering ................... 7 0
Corporate Information .................................................... 7 5
Industry Overview ....................................................... 7 7
Regulatory Overview ...................................................... 9 7
History and Corporate Structure ............................................ 1 2 6
Business ............................................................... 1 5 8
CONTENTS
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Relationship with Our Controlling Shareholders ................................. 2 6 4
Directors, Supervisors and Senior Management ................................. 2 6 7
Share Capital ........................................................... 2 7 9
Substantial Shareholders ................................................... 2 8 9
Financial Information ..................................................... 2 9 1
Future Plans and Use of Proceeds ............................................ 3 4 4
Underwriting ............................................................ 3 4 8
Structure and Conditions of the Global Offering ................................. 3 6 3
How to Apply for Hong Kong Offer Shares ..................................... 3 7 3
Appendix I — Accountants’ Report ..................................... I - 1
Appendix II — Unaudited Pro Forma Financial Information .................. II-1
Appendix III — Summary of Our Articles of Association ...................... III-1
Appendix IV — Statutory and General Information .......................... I V - 1
Appendix V — Documents Delivered to the Registrar of Companies in Hong Kong
and A vailable on Display ................................ V - 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. You should read
the whole prospectus before you decide to invest in the Offer Shares. In particular , we are a specialist
technology company seeking to list on the Main Board of the Hong Kong Stock Exchange under
Chapter 18C of the Listing Rules because we are unable to meet the requirements under Rule 8.05(1), (2)
or (3) of the Listing Rules. There are unique challenges, risks and uncertainties associated with
investing in companies such as ours. In addition, we have incurred net losses since our inception, and
we may incur net losses for the foreseeable future. We had net cash used in operating activities during
the Track Record Period. We did not declare or pay any dividends during the Track Record Period and
may not pay any dividends in the foreseeable future. Your investment decision should be made in light
of these considerations.
There are risks associated with any investment. Some of the particular risks in investing in the
Offer Shares are set out in the section headed “Risk Factors” in this prospectus. You should read that
section carefully in full before you decide to invest in the Offer Shares.
OVERVIEW
We are one of leading companies that specializes in the development, manufacturing and
commercialization of collaborative robots, or commonly known as “cobots.” We are a top 2 player in the
global cobot industry and the No.1 player among all Chinese cobot companies, with a global market share
of 13.0% as measured by shipment volume in 2023, according to the CIC Report. The global cobot
industry is at a nascent stage of development, whose market size accounted for less than 2% of the global
robot industry in terms of revenue in 2023. According to the same source, we rank seventh in the global
cobot industry with a global market share of 3.6% in terms of global revenue generated from cobots in
2023. Leveraging our proprietary full-stack cobot development technologies and in-house design and
development of key components, we offer selections of cobots in payload capacity, axis model and use
case, addressing our customers’ diverse needs across a wide array of use cases. We focus on industry
innovation, particularly in cobot safety measures and AI capabilities, by introducing the flexible e-skin
technology, SafeSkin, and launching AI-empowered cobots underpinned by our AI cobot empowering
platform, X-Trainer. As of the Latest Practicable Date, we offered a total of 27 cobot models in four
series, catering to numerous use cases in manufacturing, retail, healthcare, STEAM education, scientific
research settings and many more.
Cobots are robots with operational robotic arms intended for direct human-robot interaction or
collaboration within a shared space or where humans and robots are operating in proximity. Cobots offer
a value proposition by enabling humans and machines to work together seamlessly and safely, increasing
productivity, flexibility and quality across various industries. The cobot industry is currently in a stage of
rapid growth. The global cobot market size has grown significantly from US$466.6 million in 2019 to
US$1,039.5 million in 2023, at a CAGR of 22.2%, and is expected to reach US$4,950.0 million by 2028,
at a CAGR of 36.6% from 2023 to 2028. The growth rate of the global cobot industry has significantly
outpaced that of the traditional industrial robot industry. The proliferation of AI technologies is expected
to further accelerate the adoption of cobots in more use cases. We believe we are well positioned to
capture the substantial market opportunity.
Underpinned by our research and development capabilities, we stay at the forefront of the global
cobot industry. Guided by a forward-looking strategy and long-termist mindset, we are committed to
research and development efforts that drive sustainable growth and enduring impact. According to the
CIC Report, we are one of few global players with proprietary full-stack technologies spanning the entire
cobot development cycle, including cobot design and manufacturing, key components development,
controller system development, key algorithm formulation and iteration, versatile cobot deployment for
different tasks, and AI capabilities development. Our proprietary flexible e-skin technology, SafeSkin,
enables our cobots to detect approaching objects 15 cm away while operating a t a 1 m/s safety speed
during the human-robot interaction, four times the 0.25 m/s PRC national standard (based on the
comparison between our six-axis cobot models with a payload of 5 kg and GB 11291.1, a PRC national
standard for robots for industrial environments, which sets forth the safety requirements of 0.25 m/s),
according to the CIC Report. Our AI-empowered cobot platform, X-Trainer, boasts high-quality data
collection, low latency delivering an improvement in end-to-end response speed, and more efficient
generalized learning system. Capitalizing on our technology capabilities, we have built cobots with our
proprietary design that are safe, smart, nimble and robust.
SUMMARY
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As of the Latest Practicable Date, we had assembled a research and development team of 140
industry experts and senior engineers in the robotics industry, accounting for over 25% of our workforce.
Our research and development expenses increased from RMB46.9 million in 2021 to RMB70.5 million in
2023, at a CAGR of 22.6%. As of the Latest Practicable Date, we had obtained 217 invention patents, 303
utility model patents, and 133 design patents, some of which have garnered industry awards and acclaim.
For example, we received the 24th China Patent Excellence Award for our patented collision detection
method, the 2023 Guangdong Patent Silver Award for our patented dynamics motion control method, and
the 2021 Shenzhen Science and Technology Patent Award for our patented high-precision desktop robot
structural design technology. Our human-robot interaction technology based on e-skin admittance control
has been acclaimed by an expert group from the China Machinery Industry Federation ( ʕ਷ዚ૛ʈุᑌ
Υึ) as internationally leading.
Translating this research and development prowess into products, we offer one of the most extensive
product portfolios in the global cobot industry, according to the CIC Report, catering to numerous use
cases in manufacturing, retail, healthcare, STEAM education, scientific research settings and many more.
The comprehensive product matrix allows us to meet specific customer needs by offering model
combinations with varying axis configurations, payload capacities, and performance requirements,
geared towards the specific production lines, processes, or use cases to ensure that cobots are optimally
utilized for their intended tasks, which in turn translates into cost savings and operational efficiency. Our
four-axis cobots, first launched in 2016, are built on proprietary patents that have enabled compact size,
integrated controller, and simple structure while maintaining high-performance standards. Our cobots
have been acclaimed domestically and internationally, receiving awards such as the China Red Star
Design Award (ᆤ ), the German iF Design Award ( ᅃ਷iFᆤ), the Red Dot Design
Award (ᆤ ), and the U.S. CES Innovation Award (਷CES ௴อᆤ), to name a few.
Our proactive endeavors in product commercialization and market expansion have contributed to
our revenue growth during the Track Record Period. Our revenue increased at a CAGR of 28.3% from
RMB174.3 million in 2021 to RMB286.7 million in 2023 and by 9.6% from RMB109.9 million in the six
months ended June 30, 2023 to RMB120.5 million in the six months ended June 30, 2024. Our export
volume of cobots has consistently ranked first in China for six consecutive years, according to the CIC
Report. During the Track Record Period, we sold a total of over 53,000 cobots globally. Our sales
network consists of direct sales and distributors with a global footprint in over 80 countries and regions,
including major overseas markets such as the United States, the European Union, Japan and Southeast
Asia. Our commercialization success is also validated by our clientele. With robust growth and
proprietary full-stack technology, we are well-positioned to capitalize on the market opportunity in the
global cobot industry.
OUR COLLABORATIVE ROBOT PRODUCTS
We are primarily engaged in the design, development, manufacturing and commercialization of
cobots. Our cobot products are adopted by global customers for various use cases in manufacturing,
retail, healthcare, STEAM education, scientific research settings and many more. All of our cobot
products are designated Specialist Technology Products as defined under Chapter 18C of the Listing
Rules. We have adopted a transaction-based model for the sales of our cobot products.
Our cobots are primarily categorized into two types based on the number of axes, i.e., four-axis
cobots and six-axis cobots. We primarily market our six-axis cobots under the CR Series and the Nova
Series. Our six-axis cobots feature great flexibility and dexterity, making them versatile for performing a
wide range of tasks. Our four-axis cobot series primarily consist of Magician Series and M Series. Our
four-axis cobots feature integrated lightweight design and compact size, allowing for easy deployment at
desktop-level.
As of the Latest Practicable Date, we offered a total of 27 cobot models in four series with payload
capacity ranging from 0.25kg to 20kg, among which 22 were six-axis models and five were four-axis
models, representing one of the most extensive product portfolios in the global cobot industry, according
to the CIC Report. In addition, cobot-related accessories within our ecosystem have enhanced our cobots’
versatility and functionality. Moreover, catering to customers’ demand for different automation
solutions, we have designed and introduced integrated cobots to readily cope with specific use cases in
various industries, such as palletizing, welding, mobile operation and vocational training. During the
Track Record Period, we sold over 53,000 cobots worldwide.
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The following table sets forth a breakdown of our revenue by product type for the years/periods
indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Six-axis cobots ....... 25,957 14.9 104,735 43.5 134,299 46.8 52,609 47.9 63,840 53.0
Four-axis cobots ...... 119,885 68.8 100,869 41.9 99,523 34.7 40,501 36.8 36,763 30.5
Integrated cobots ...... 16,095 9.2 31,596 13.1 34,306 12.0 11,989 10.9 14,713 12.2
Others (1) ............ 12,377 7.1 3,813 1.5 18,621 6.5 4,813 4.4 5,146 4.3
Total .............. 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
(1) Others primarily represent project-based solutions, such as STEAM education labs, as well as ancillary service fees
including technical service fees, training fees and maintenance fees in connection with our cobots.
CR Series
Our CR Series includes six-axis cobot models primarily targeting industrial manufacturers seeking
to implement flexible production systems. With seven payload capacities spanning from 3 to 20
kilograms, the CR Series is engineered to optimally align with diverse customer requirements. Since the
launch in 2021, cobots from the CR Series have been adopted by manufacturers around the globe across
a wide range of industries, including automotive, consumer electronics, semiconductor, healthcare,
chemical, retail and many others.
Nova Series
The Nova Series features ultralight and user-friendly six-axis cobots products specifically designed
for use cases in customer-facing settings, such as coffee making and latte decoration in coffee shops,
physical therapy in clinics, and on-spot beverage making in vending machines, among others. The Nova
Series offers payload options of 2 and 5 kilograms. Approximately 33% to 44% lighter and 20% smaller
than the CR Series cobots with equivalent payloads, the Nova Series is designed to fit into
space-constrained and premium commercial environments.
Magician Series
The Magician Series consists of three models, including two models of four-axis cobots, Magician
and Magician Lite, as well as a model of six-axis cobots, Magician E6, all of which are specifically
designed for education institutions to assist students at various levels in STEAM curricula, such as AI and
programming, cobot application trainings and research and scientific trainings. According to the CIC
Report, Magician is the world’s first desktop-level cobot for educational settings. Magician by default
can perform complex tasks such as 3D printing, laser engraving, calligraphy and drawing, and allows
users to develop additional functionalities through script programming. Magician can also be flexibly
combined with accessories, such as sliding rails, conveyor belts and vision systems, to complete various
training projects based on different needs.
M Series
Our M Series includes MG400 and M1 Pro, both of which were four-axis cobot models specifically
designed for light manufacturing customers. MG400 is a compact desktop-level four-axis cobot with a
footprint smaller than a piece of A4 paper. With a payload capacity of 750 grams and a reach of 440 mm,
MG400 is equipped with drag-to-teach and collision detection features, making it a cost-effective option
for automating tasks in small batch production. This reduces human involvement in activities such as
labeling and electronic component testing. Its all-in-one design makes MG400 both compact and
portable, ideal for flexible production environments.
M1 Pro is a four-axis SCARA cobot designed primarily for small- and medium-scale manufacturing.
Featuring an all-in-one compact design, high precision, large operating scope, comprehensive
functionalities, and flexible customization, M1 Pro is a cost-effective choice for many manufacturers
seeking to reduce costs and increase efficiency through the use of cobots and smart production. With an
SUMMARY
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integrated control box, M1 Pro eliminates hassle of additional wiring and cabling, and its plug-and-play
installation reduces connection and setup time, offering a seamless and efficient implementation process.
M1 Pro includes an incremental differential encoder interface and supports multi-threading and
in-motion I/O control for parallel processing, effectively shortening the cobot’s cycle time. In addition,
M1 Pro’s forearm is generally narrower than that of traditional industrial cobots, allowing our customers
to adopt M1 Pro in confined space and reducing the likelihood of accidental collisions. The embedded
collision detection feature further enhances the safety of collaboration between users and M1 Pro.
Integrated Cobots
Catering to customers’ demand for different automation solutions, we have designed and introduced
integrated cobots to readily cope with specific use cases in various industries, such as palletizing,
welding, mobile operation and vocational training. We have also developed integrated cobots for coffee
making, which are capable of coffee making and latte decoration. Similar to other cobot series, our
integrated cobots are also standardized products.
Accessories
Our accessories for cobot products primarily include (1) modularized parts such as vision sensors,
force sensors and electric grippers that can be flexibly attached to CR Series, and Nova Series depending
on desired use cases, and (2) accessories for Magician Series to achieve better STEAM curriculum
learning. These accessories are designed to be compatible with our self-developed motion control
algorithms and overall machine structural design, optimizing the programming time of cobot accessories
and reducing the need for secondary developments. In addition, coupled with AI education curriculum
which we were involved in compiling, accessories for Magician Series help students gain an
understanding of comprehensive robotic and AI knowledge and programming skills. Our cobots must be
equipped with accessories to perform certain tasks, in which case the accessories are typically sold
together with the cobots per each customer’s order.
The following table sets forth the sales volume and ASP of our six-axis cobots, four-axis cobots and
integrated cobots during the Track Record Period.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
(RMB in thousands/unit for ASP)
Six-axis cobots ....... 3 9 4 65.9 1,707 61.4 2,374 56.6 898 58.6 1,354 47.1
Four-axis cobots ...... 14,626 8.2 12,524 8.1 11,782 8.4 4,918 8.2 4,464 8.2
Integrated cobots ...... 1,218 13.2 1,560 20.3 960 35.7 365 32.8 736 20.0
The following table sets forth a breakdown of our revenue from the sales of products by application
settings for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Industrial ............ 44,638 25.7 124,436 51.8 151,181 52.9 62,085 56.5 66,239 55.1
Education ........... 127,671 73.5 111,754 46.5 122,384 42.8 44,213 40.3 48,727 40.6
Commercial ......... 1,338 0.8 4,244 1.7 12,106 4.3 3,468 3.2 5,187 4.3
Total .............. 173,647 100.0 240,434 100.0 285,671 100.0 109,766 100.0 120,153 100.0
COMPETITIVE STRENGTHS
We believe the following competitive strengths have contributed to our success and differentiated us
from our competitors: (1) player at the frontline of the booming cobot industry, (2) robust research and
development capabilities guided by a long-termist mindset, (3) proprietary full-stack technologies, (4)
comprehensive product matrix catering to a wide array of use cases, (5) successful commercialization
underscored by global footprint and clientele, and (6) visionary and experienced management team.
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GROWTH STRATEGIES
We intend to pursue the following strategies to further grow our business: (1) continue to advance
technology development, (2) continue to expand our product offering and ecosystem, (3) enhance
production capabilities and capacity to streamline supply chain management, (4) further fortify our sales
network to expand global reach, and (5) selectively pursue strategic collaboration, investment and
acquisition opportunities to integrate industry resources.
OUR CORE TECHNOLOGIES
Leveraging our interdisciplinary research and development capabilities, we have become one of few
in the global cobot industry, according to the CIC Report, that have developed proprietary full-stack
technologies that cover all the key aspects in the cobot development cycle, encompassing cobot design
and manufacturing, key components development, controller system development, key algorithm
formulation and iteration, versatile cobot deployment for different tasks, and AI capabilities
development.
Our core technology capabilities can be broadly categorized into five technology clusters, including
(1) key component design and development, (2) universal control platform, (3) safety technologies, (4)
robotic technologies, and (5) AI technologies. Our self-developed modularized key component platform
enables us to achieve easy maintenance, rapid iteration, and flexible customization in our products so that
we can rapidly respond to evolving customer needs. We have also developed a universal control platform
that has achieved multi-platform, multi-device and plug-and-play interoperability. In addition, aimed at
seamlessly integrating cobots into human workspace and eliciting trust among human workers, our core
safety technologies encompass collision detection technology and non-contact collision prevention
technology to feature both agile pre-collision evasion and instant post-collision adjustment, offering
additional layers of protection and enabling our cobots to operate more efficiently. Furthermore, our core
robotic technologies are essential in achieving real-time control and monitoring of the cobot’s movement
position, speed and force to ensure its ability to execute stable, precise, smooth and adaptive movements.
Our intelligent perception and interaction technology, which primarily comprises teleoperation
technology and motion capture and imitation technology, seamlessly integrates multi-sensory elements,
such as vision, force, touch and proximity, enabling rapid perception in unstructured environments and
intelligent human-robot collaboration.
RESEARCH AND DEVELOPMENT
We have established interdisciplinary research and development capabilities that draw upon a
diverse range of fields, such as mechanics engineering, computer science, control systems, human-robot
interaction, artificial intelligence, microelectronic circuits technology, and sensor technology. Our
in-house research and development team strives to expand the available functionalities and use cases of
our cobot products, accommodating specific needs of various different sectors. During the Track Record
Period, our research and development expenses were RMB46.9 million, RMB52.1 million, RMB70.5
million, RMB31.2 million and RMB31.4 million in 2021, 2022, 2023 and the six months ended June 30,
2023 and 2024, respectively, representing 26.9%, 21.6%, 24.6%, 28.4% and 26.1% of our revenue in the
respective years/periods.
INTELLECTUAL PROPERTY RIGHTS
We believe that our intellectual property rights are critical to our continued success. We have taken
the following key measures to protect our intellectual property rights, including: (1) implementing a set
of comprehensive internal policies to establish robust management over our intellectual property rights,
(2) establishing an intellectual property taskforce to guide, manage, supervise and monitor our daily work
regarding intellectual properties, (3) timely registration, filing and application for ownership of our
intellectual properties, (4) actively tracking the registration and authorization status of intellectual
properties and taking action in timely manner if any potential conflicts with our intellectual property
rights are identified, and (5) clearly stating all rights and obligations regarding the ownership and
protection of intellectual properties in the employment agreements we enter into.
As of the Latest Practicable Date, we had 653 registered patents, including 217 invention patents,
303 utility model patents and 133 design patents, and filed over 180 patent applications which were
pending approval. According to the CIC Report, as of the same date, we had the largest number of
registered patents in the global cobot industry. In addition, many of our patents have garnered industry
awards and acclaim.
SUMMARY
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OUR SALES NETWORK
Over the years, we have built up a broad and geographically diversified customer base in China and
globally, spreading across over 80 countries and regions. We distribute our cobot products through direct
sales and distributors, who contribute to a broad customer coverage. Our sales force is essential to build
our brand image by interacting, introducing and demonstrating the features of our products directly to our
customers. Our sales team is equipped with knowledge of our cobot products and is primarily responsible
for frequently communicating with our customers and understanding their feedback on the quality,
preferences, improvements and market demand of our products. They play an important part in the
planning, development and implementation of our planned marketing strategies.
In 2021, 2022, 2023 and the six months ended June 30, 2024, we served 289, 411, 434 and 304 direct
sale customers, respectively. Our direct sales customers mainly comprise (1) end users, including
corporate customers in manufacturing industries, primarily covering automotive manufacturing, 3C
manufacturing, mechanical manufacturing, and semiconductor fabrication, research laboratories and
educational institutions, and consumer goods companies, and (2) cobot integrators who integrate cobots,
additional components, software systems and other services with specialized design, engineering and
programming resources.
We believe that by engaging distributors, we are able to leverage their experience and knowledge of
the target local markets as well as their existing sales networks and resources, which can help us expand
our market reach over a wider geographical area and achieve deeper market penetration than if we were to
proceed with direct sales and marketing alone, without incurring substantial sales and marketing costs. In
2021, 2022, 2023 and the six months ended June 30, 2024, there were 344, 387, 358 and 224 distributors,
respectively.
SUPPLIERS
Our suppliers primarily consist of (1) providers of raw materials and components for the production
of our cobot products and accessories, and (2) manufacturing partners for the production of our cobot
products. We select leading suppliers in the relevant sectors in order to ensure the availability and quality
of such raw materials, components and services. Our procurement process is under constant review for
higher efficiency and cost control purpose without jeopardizing the quality of deliverables.
The key raw materials and components for the production of our cobot products primarily include
chips, PCB, motor body, gear reducers and sensors. We require the suppliers to develop and manufacture
the components based on our specifications with quality standards satisfactory to us. During the Track
Record Period, we also engaged manufacturing partners for the production of our cobot products. See
“Business—Production.” We typically select manufacturing partners based on prices, contract
performance, delivery ability and quality of services. We maintain good relationships with our
manufacturing partners through frequent and open communication on project-related matters,
particularly on the progress of work and project requirements.
MARKET OPPORTUNITY AND COMPETITION
The global cobot industry, as measured by sales revenue, has grown from US$466.6 million in 2019
to US$1,039.5 million in 2023, at a CAGR of 22.2%. The market size is expected to reach US$4,950.0
million in 2028, at a CAGR of 36.6% between 2023 and 2028. The rapid growth of the cobot market is
primarily driven by several key factors. Technology advancements including AI integration not only
improve cobot capabilities but also bring about economies of scale, which has reduced costs and made
cobots more affordable. Additionally, labor shortages and rising labor costs due to an aging population
have resulted in an increasing demand for automation. As a result, businesses in commercial sectors are
increasingly adopting cobots for use cases, such as unmanned retail, assisted meal preparation and other
services, to improve the operational efficiency. In particular, China is playing an increasingly important
role in the global cobot market, with its share in the global cobot market projected to increase from 26.3%
in 2023 to 37.2% in 2028, at a CAGR of 46.5% from 2023 to 2028.
All the major sectors in the cobot industry show strong growth momentum. The industrial sector
dominates the global cobot market, with a projected CAGR of 28.7% between 2023 and 2028. Key growth
SUMMARY
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areas include the automotive and components, 3C electronics, and semiconductor industries. The
commercial sector is expected to experience the fastest growth, with a CAGR of 75.3% between 2023 and
2028, driven by applications in unmanned retail, assisted meal preparation and other services. The
medical and healthcare sector is another significant growth area, with a CAGR of 37.6% between 2023
and 2028. The aging population and rising caregiver costs are driving the adoption of cobots in
physiotherapy, rehabilitation, and medical assistance applications. The scientific research and education
sector is also poised for growth, with a CAGR of 43.0% between 2023 and 2028, driven by the increasing
adoption of cobots for industry-academia-research integration projects (ɓ᜗ʷධͦ ), STEAM
education, research assistance and training simulations.
The global cobot industry is relatively concentrated, with the top five market players accounting for
approximately 46.3% of the market share in 2023 in terms of global cobot shipment volume. Four of the
top five players are Chinese manufacturers, indicative of China’s significant role in shaping the global
cobot industry. In 2023, we ranked second among all market players in the global cobot industry and
ranked first among all Chinese cobot companies, each measured by shipment volume. According to the
same source, we rank seventh in the global cobot industry with a global market share of 3.6% in terms of
global revenue generated from cobots in 2023. Our revenue has grown at a CAGR of 28.3% between 2021
and 2023, outpacing the industry average.
Leading companies in the global cobot industry offer a wide range of cobot models with varying
payload capacities and technical specifications to cater to the diverse needs of customers across different
industries. As the cobot industry continues to grow and evolve, companies that can effectively combine
technological innovation, product diversification, and strong customer relationships are likely to
maintain their competitive edge. The intense competition among the top players is expected to drive
further advancements in cobot technology and expand the range of applications.
RISKS AND CHALLENGES
We are a Specialist Technology Company seeking to list on the Main Board of the Stock Exchange
under Chapter 18C of the Listing Rules. We are at a relatively early stage of commercialization of our
cobot products, as we only met the revenue requirement as set out in Rule 18C.03(4) of the Listing Rules
in 2023 following our revenue growth during the Track Record Period. In addition, we recorded net losses
since our inception and expect to continue to incur net losses after the Track Record Period. We believe
there are certain risks and uncertainties involved in our operations, some of which are beyond our control.
Our business and the Global Offering involve certain risks, which are set out in the section headed
“Risk Factors” in this prospectus. Some of the major risk factors that we face include: (1) difficulty in
evaluating our business and prospect due to our limited operating history and limited track record in the
commercialization of our products; (2) uncertainties in the growth of the size of our addressable markets
and the demand for our products; (3) failure to compete with our competitors; (4) failure to advance our
technology development and introduce new products; (5) deterioration in relationships with distributors;
(6) failure to deliver desired research and development results after significant investments; (7) failure to
obtain or maintain adequate intellectual property rights protection for our products; (8) failure to obtain
additional capital when desired on favorable terms or at all; (9) adverse impact on our cash flow, liquidity
and profitability due to significant research and development expenditures and capital expenditures for
our business operations; and (10) failure to achieve profitability in the near future. As different investors
may have different interpretations and criteria when determining the significance of a risk, you should
carefully read the “Risk Factors” section in its entirety before you decide to invest in our Shares.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following is a summary of our historical financial information as of and for the years ended
December 31, 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, extracted from the
Accountants’ Report set out in Appendix I to this prospectus. The summary below should be read in
conjunction with the consolidated financial information in Appendix I, including the accompanying notes
and the information set forth in the section headed “Financial Information” in this prospectus. Our
consolidated financial information was prepared in accordance with the IFRSs.
SUMMARY
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Summary of Results of Operations
The following table sets forth a summary of our results of operations for the years/periods indicated.
Our historical results presented below are not necessarily indicative of the results that may be expected
for any future period.
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 ............. 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
Cost of sales .......... (86,234) (49.5) (142,796) (59.2) (161,905) (56.5) (66,978) (60.9) (67,618) (56.1)
Gross profit .......... 88,080 50.5 98,217 40.8 124,844 43.5 42,934 39.1 52,844 43.9
Other income and gains .... 27,267 15.6 45,464 18.9 43,831 15.3 23,120 21.0 21,075 17.5
Loss before tax ........ (25,291) (14.5) (52,612) (21.8) (89,800) (31.3) (51,562) (46.9) (59,584) (49.5)
Income tax (expense)/credit . (16,465) (9.4) 135 0.1 (13,481) (4.7) (125) (0.1) (299) (0.2)
Loss for the year/period .. (41,756) (24.0) (52,477) (21.8) (103,281) (36.0) (51,687) (47.0) (59,883) (49.7)
Non-IFRS Measure
To supplement our consolidated financial statements which are presented in accordance with the
IFRSs, we also use adjusted net loss (non-IFRS measure) as additional financial measure, which is not
required by, or presented in accordance with, the IFRSs. We believe that such non-IFRS measure
facilitate comparisons of operating performance from period to period and company to company by
eliminating potential impacts of certain items and provides useful information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as they help our
management. However, our presentation of adjusted net loss (non-IFRS measure) may not be comparable
to similarly titled measures presented by other companies. The use of such non-IFRS measure has
limitations as an analytical tool, and you should not consider them in isolation from, or as substitute for
analysis of, our results of operations or financial condition as reported under the IFRSs.
We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted for share-based
payments expenses and listing expenses. Listing expenses are related to the Global Offering. Share-based
payments expenses are non-cash expenses arising from granting restricted share units and options to
senior management and employees. The following table sets out a reconciliation from adjusted net loss
(non-IFRS measure) to loss for the year/period which is presented in accordance with the IFRSs.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Loss for the year/period ............... (41,756) (52,477) (103,281) (51,687) (59,883)
Add:
Share-based payments expenses ........ (1,285) 12,579 21,464 5,845 13,665
Listing expenses .................... — — — — 11,242
Adjusted net loss (non-IFRS measure) ... (43,041) (39,898) (81,817) (45,842) (34,976)
Our revenue increased during the Track Record Period, primarily driven by the increase in revenue
from six-axis cobots due to the increase in sales volume, as we enhanced the functions of our existing
six-axis cobots, launched new six-axis cobot products, and experienced an increase in market demand.
We also recorded government grants under other income and gains of RMB11.6 million, RMB30.9
million, RMB32.9 million, RMB15.8 million and RMB16.0 million in 2021, 2022, 2023 and the six
months ended June 30, 2023 and 2024, respectively. Our net loss increased from 2021 to 2022, primarily
due to the increases in selling and marketing expenses and administrative expenses, and our net loss
further increased in 2023, primarily due to the increases in selling and marketing expenses and research
and development expenses. Our net losses increased from RMB51.7 million in the six months ended June
30, 2023 to RMB59.9 million in the six months ended June 30, 2024, primarily due to the increases in
administrative expenses and selling and marketing expenses. For details of the reasons for changes in the
operating expenses, see “Financial Information—Period to Period Comparison of Results of Operations.”
SUMMARY
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Summary of Consolidated Statements of Financial Position
The following table sets forth a summary of our consolidated statements of financial position as of
the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Total non-current assets ........... 138,682 235,461 233,036 232,141
Total current assets ............... 526,403 689,959 501,852 437,002
Total current liabilities ............ 181,396 314,621 160,797 153,737
Net current assets ................. 345,007 375,338 341,055 283,265
Total assets less current liabilities . . 483,689 610,799 574,091 515,406
Total non-current liabilities ........ 168,038 155,765 200,788 188,474
Net assets ........................ 315,651 455,034 373,303 326,932
Total equity ...................... 315,651 455,034 373,303 326,932
Summary of Consolidated Statements of Cash Flows
The following table sets forth a summary of our cash flows 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 ............................ (25,801) (15,177) (19,708) (22,108) (26,472)
Working capital changes ................ 32,168 (100,487) (99,537) (56,164) (30,356)
Cash generated from/(used in) operations .... 6,367 (115,664) (119,245) (78,272) (56,828)
Income tax paid ....................... — (847) (38,455) (36,817) (13,586)
Net cash from/(used in) operating activities . . 6,367 (116,511) (157,700) (115,089) (70,414)
Net cash (used in)/from investing activities . . . (271,879) 69,480 (57,864) (52,034) 24,856
Net cash from financing activities .......... 275,012 193,973 28,137 3,292 7,816
Cash and cash equivalent at beginning of the
year/period ......................... 139,879 149,093 297,763 297,763 110,962
Effects of exchange rate changes on cash and
cash equivalents ..................... (286) 1,728 626 1,385 (187)
Cash and cash equivalent at end of the
year/period ......................... 149,093 297,763 110,962 135,317 73,033
We recorded net cash used in operating activities of RMB116.5 million in 2022, generally in line
with our loss before tax position and changes in working capital items that negatively affected our
operating cash flows, which primarily include the increases in inventories and trade and bills receivables,
and the decrease in deferred income. We also recorded net cash used in operating activities of RMB157.7
million in 2023, generally in line with our loss before tax position and changes in working capital items
that negatively affected our operating cash flows, which primarily include the increase in inventories and
decreases in other payables and accruals, contract liabilities and deferred income, as well as the income
tax paid in 2023. We recorded net cash used in operating activities of RMB70.4 million for the six months
ended June 30, 2024, generally in line with our loss before tax position and changes in working capital
items that negatively affected our operating cash flows, which primarily include the increase in
inventories and the decrease in deferred income, as well as the income tax paid in the six months ended
June 30, 2024. For details of our cash flows during the Track Record Period, see “Financial
Information—Liquidity and Capital Resources—Cash Flows.”
Our cash burn rate refers to the average monthly (1) net cash used in operating activities, (2)
payments for property, plant and equipment, intangible assets and other capital expenditures, and (3)
payments of lease liabilities. Our historical cash burn rate was RMB3.5 million, RMB12.1 million and
RMB20.6 million in 2021, 2022 and 2023 and RMB11.1 million for the 12 months ended June 30, 2024,
SUMMARY
–9–


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respectively. We had a relatively high cash burn rate in 2023, primarily due to capital expenditure for
asset acquisition of RMB71.5 million in 2023 in connection with the construction of our Qingdao
production facilities. See Note 34 to the Accountants’ Report included in Appendix I to this prospectus
for details. Our historical cash burn rate in 2023 after deducting such capital expenditure would have
been RMB14.6 million. We had cash and cash equivalents and financial assets at FVTPL of RMB219.0
million in aggregate as of June 30, 2024. We estimate that we will receive net proceeds of approximately
HK$719.6 million after deducting the estimated underwriting commissions and other fees and expenses
paid and payable by us in connection with the Global Offering, assuming no Over-allotment Option is
exercised and assuming an Offer Price of HK$19.80 per Offer Share, being the mid-point of the indicative
Offer Price range as set out in this prospectus. Assuming that the average cash burn rate going forward
will be RMB20.6 million, similar to the cash burn rate level in 2023, we estimate that our cash and cash
equivalents and financial assets at FVTPL as of June 30, 2024 will be able to maintain our financial
viability for approximately 10.6 months or, if we take into account 10% of the estimated net proceeds
from the Listing (namely, the portion allocated for our working capital and other general corporate
purposes), approximately 13.9 months or, if we take into account the estimated net proceeds from the
Listing, approximately 43.0 months. Assuming that the average cash burn rate going forward will be
RMB14.6 million, similar to the cash burn rate level after deducting the capital expenditure for asset
acquisition in 2023 as mentioned above, we estimate that our cash and cash equivalents and financial
assets at FVTPL as of June 30, 2024 will be able to maintain our financial viability for approximately
15.0 months or, if we take into account 10% of the estimated net proceeds from the Listing (namely, the
portion allocated for our working capital and other general corporate purposes), approximately 19.5
months or, if we take into account the estimated net proceeds from the Listing, approximately 60.5
months. Assuming that the average cash burn rate going forward will be RMB11.1 million, similar to the
cash burn rate level in the 12 months ended June 30, 2024, we estimate that our cash and cash equivalents
and financial assets at FVTPL as of June 30, 2024 will be able to maintain our financial viability for
approximately 19.8 months or, if we take into account 10% of the estimated net proceeds from the Listing
(namely, the portion allocated for our working capital and other general corporate purposes),
approximately 25.8 months or, if we take into account the estimated net proceeds from the Listing,
approximately 79.9 months. We will continue to monitor our cash flows from operations closely and
expect to raise our next round of financing, if needed, with a minimum buffer of 12 months.
We expect our costs and expenses will continue to increase as our business grows, but we do not
expect such increase to outpace our revenue increase in the foreseeable future.
KEY FINANCIAL RATIOS
As of/for the year ended December 31,
As of/for the six months
ended June 30,
2021 2022 2023 2023 2024
(unaudited)
Profitability:
Gross profit margin (1) .................. 50.5% 40.8% 43.5% 39.1% 43.9%
Liquidity:
Current ratio
(2) ....................... 2 . 9 2 . 2 3 . 1 N / A 2 . 8
Quick ratio (3) ........................ 2 . 5 1 . 8 2 . 2 N / A 1 . 8
(1) The calculation of gross profit margin is based on gross profit for the period divided by revenue for the respective
period and multiplied by 100.0%.
(2) The calculation of current ratio is based on current assets divided by current liabilities as of period end.
(3) The calculation of quick ratio is based on current assets less inventories divided by current liabilities as of period end.
See “Financial Information—Key Financial Ratios” for details.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Liu controlled 31.08% of the voting power at the general
meetings of our Company, comprising (1) 26.62% beneficially owned by him directly, (2) 3.50%
beneficially owned by Yuejiang LP, which is controlled by Mr. Liu as its general partner, and (3) 0.96%
beneficially owned by Qinmo LP, which is controlled by Mr. Liu as its general partner. Upon the Listing,
Mr. Liu will control 27.97% of the voting power at the general meetings of our Company, comprising (i)
23.96% beneficially owned by him directly, (ii) 3.15% beneficially owned by Yuejiang LP, and (iii)
SUMMARY
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0.86% beneficially owned by Qinmo LP, assuming the Over-allotment Option is not exercised. Therefore,
Mr. Liu, Yuejiang LP and Qinmo LP were a group of our Controlling Shareholders as of the Latest
Practicable Date and will be our single largest group of Shareholders upon the Listing. Yuejiang LP is a
share incentive platform of our Company and Qinmo LP is a shareholding platform of our certain
financial investors. For further details, see “History and Corporate Structure” and “Relationship with Our
Controlling Shareholders.”
PRE-IPO INVESTMENTS
To fund our strategic growth and broaden our shareholder base, we have conducted several rounds of
pre-IPO Investments since the incorporation of our Company. See “History and Corporate
Structure—Pre-IPO Investments” for details of the principal terms of our pre-IPO investments and the
identity and background of our Pre-IPO Investors.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and permission to deal
in, the Shares in issue and to be issued pursuant to (1) the Global Offering, (2) the exercise of the
Over-allotment Option and (3) the Conversion of Domestic Shares into H Shares on the basis that, among
other things, we satisfy the requirement under Rule 18C.03 of the Listing Rules as a Commercial
Company (as defined in the Listing Rules) with reference to our expected market capitalization at the
time of Listing, which, based on the Offer Price, exceeds HK$6 billion.
LISTING EXPENSES
We recorded listing expenses of nil, nil, nil and RMB13.3 million (including deferred listing
expenses) in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively. We expect to incur
a total of approximately RMB67.0 million (HK$72.4 million) of listing expenses in connection with the
Global Offering, representing approximately 9.1% of the gross proceeds from the Global Offering
(assuming an Offer Price of HK$19.80, being the mid-point of the indicative Offer Price range between
HK$18.80 and HK$20.80, and assuming that the Over-allotment Option is not exercised), including (1)
underwriting commissions, sponsor fees, SFC transaction levy, Stock Exchange trading fees and AFRC
transaction levy for all Offer Shares of approximately RMB39.1 million (HK$42.2 million), and (2)
non-underwriting related expenses of approximately RMB27.9 million (HK$30.2 million), which consist
of (i) fees and expenses of legal advisors and accountants of approximately RMB17.9 million (HK$19.3
million), and (ii) other fees and expenses of approximately RMB10.0 million (HK$10.8 million).
Approximately RMB30.2 million (HK$32.7 million) is expected to be charged to our consolidated
statements of profit or loss, and approximately RMB36.8 million (HK$39.7 million) is expected to be
deducted from equity. The listing expenses above are the best estimate as of the Latest Practicable Date
and for reference only. The actual amount may differ from this estimate.
OFFERING STATISTICS
All statistics in the following table are based on the fact that (1) the Global Offering has been
completed and 40,000,000 Offer Shares are issued pursuant to the Global Offering; and (2) the
Over-allotment Option is not exercised.
Based on an Offer Price of
HK$18.80 per H Share
Based on an Offer Price of
HK$20.80 per H Share
Market Capitalization of our Shares (1) .... HK$7,520.0 million HK$8,320.0 million
Unaudited pro forma adjusted net tangible
asset per Share (2) .................... HK$2.60 HK$2.70
(1) The calculation of market capitalization is based on 400,000,000 Shares expected to be in issue immediately upon
completion of the Global Offering (assuming the Over-allotment Option is not exercised).
(2) The unaudited pro forma net tangible assets per Share is arrived at after adjusting for the estimated net proceeds from the
Global Offering and on the basis that 400,000,000 Shares were in issue, assuming that the Global Offering has been
completed on June 30, 2024 but takes no account of any Shares which may be allotted and issued pursuant to the exercise of
the Over-allotment Option or any Shares which may be issued or repurchased by the Company.
SUMMARY
–1 1–


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FUTURE PLANS AND USE OF PROCEEDS
We estimate the net proceeds of the Global Offering which we will receive, assuming an Offer Price
of HK$19.80 per Offer Share (being the mid-point of the Offer Price range stated in this prospectus), will
be approximately HK$719.6 million, after deduction of underwriting fees and commissions and other
estimated expenses in connection with the Global Offering assuming the Over-allotment Option is not
exercised. We intend to use the net proceeds of the Global Offering for the following purposes: (1)
approximately 40.0%, or HK$287.8 million for technology development for intelligent cobots; (2)
approximately 27.0%, or HK$194.3 million for the development of our production lines and
manufacturing capabilities; (3) approximately 16.0%, or HK$115.1 million for strategic alliances,
investment and acquisition opportunities; (4) approximately 7.0%, or HK$50.4 million for overseas sales
channel building; and (5) approximately 10.0%, or HK$72.0 million for working capital and other
general corporate purposes. See “Future Plans and Use of Proceeds” for further information relating to
our future plans and use of proceeds from the Global Offering, including the adjustment on the allocation
of the proceeds in the event that the Offer Price is fixed at a higher or lower level compared to the
midpoint of the estimated Offer Price range.
DIVIDENDS
We are a holding company incorporated under PRC laws. During the Track Record Period and up to
the Latest Practicable Date, we did not declare or pay any dividends or have any dividend policy in place.
Pursuant to our Articles of Association, our Board will formulate the dividends distribution plan after
taking into account our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restriction and other factors which our Directors consider relevant. Any
declaration and payment as well as the amount of dividends will be subject to our Articles of Association,
applicable PRC law and approval by our Shareholders. Our Shareholders in a general meeting may
approve any declaration of dividends, which must not exceed the amount recommended by our Board. As
advised by our PRC Legal Advisor, no dividend shall be declared or payable, unless we have profits and
reserves lawfully available for distribution. Any future net profit that we make will have to be first
applied to make up for our historically accumulated losses, after which we will be obliged to allocate 10%
of our net profit to our statutory common reserve fund until such fund has reached more than 50% of our
registered capital.
RECENT DEVELOPMENT
In the four months ended October 31, 2024, the sales volume of our six-axis cobots, four-axis cobots
and integrated cobots were 1,543 units, 3,150 units and 2,140 units, respectively. Our Directors
confirmed that subsequent to the Track Record Period and up to the date of this prospectus, (1) there was
no material adverse change in the market conditions and the regulatory environment in which our Group
operates that would affect our financial or operating position materially and adversely; (2) there was no
material adverse change in our business, revenue structure, profitability, cost structure, financial position
and prospects; and (3) no event had occurred that would affect the information shown in our Accountants’
Report in Appendix I to this prospectus materially and adversely.
We expect to continue to incur net loss for the year ending December 31, 2024, primarily due to (1)
our selling and distribution expenses, as we continue to expand our business; (2) our research and
development expenses, as we continue to invest in our research and development activities; and (3)
administrative expenses, as we incurred listing expenses in connection with the Global Offering. Except
for the expected increase in our administrative expenses driven by our listing expenses in connection with
the Listing and Global Offering, we do not expect to experience any other material increase in our
expenses for the six months ending December 31, 2024.
COVID-19 OUTBREAK AND EFFECTS ON OUR BUSINESS
The outbreak of COVID-19 has affected the Chinese and global economy. During the COVID-19
outbreak, we experienced temporary suspension to our production bases, which caused minor delays in
our production schedule. In addition, our headquarters in Shenzhen were temporarily closed for
approximately two weeks, during which our employees worked remotely without any material
disruptions to our business operations. Our Directors confirmed that, during the Track Record Period and
up to the Latest Practicable Date, the COVID-19 outbreak had not had a material adverse effect on our
business, results of operations and financial condition. However, any future impact caused by the
COVID-19 pandemic will depend on its subsequent development. We are closely monitoring the
development of the COVID-19 pandemic and continually evaluating any potential impact on our business
operations.
SUMMARY
–1 2–


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In this prospectus, unless the context otherwise requires, the following terms and expressions
have the meanings set forth below.
“affiliate” any other person, directly or indirectly, controlling or controlled
by or under direct or indirect common control with such specified
person
“AFRC” Accounting and Financial Reporting Council
“Articles of Association” or
“Articles”
the articles of association of our Company, as amended, which
shall become effective on the Listing Date, a summary of which is
set out in Appendix III to this prospectus
“ASP” average selling price
“Audit Committee” audit committee of the Board
“Board” or “Board of Directors” the Board of Directors of our Company
“Business Day” or
“business day”
any day (other than a Saturday, Sunday or public holiday) on
which banks in Hong Kong are generally open for normal banking
business to the public
“Capital Market Intermediaries” or
“capital market
intermediary(ies)” or “CMI(s)”
the capital market intermediaries identified in “Directors,
Supervisors and Parties Involved in the Global Offering”
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“China” or “PRC” the People’s Republic of China, excluding, for the purpose of this
prospectus only, Hong Kong, Macau and Taiwan
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
supplemented or otherwise modified from time to time
“Company” or “our Company” SHENZHEN DOBOT CORP LTD (formerly known as Shenzhen
Yuejiang Technology Co., Ltd.) (ʮ̡ ),
incorporated under the PRC laws on July 30, 2015 under the name
of Shenzhen Yuejiang Technology Co., Ltd. (ҦϞ
ʮ̡) as a limited liability company and converted into a joint
stock company under the PRC laws on December 28, 2022
DEFINITIONS
–1 3–


--- page 23 ---
“Company Law” or
“PRC Company Law”
Company Law of the People’s Republic of China ( ʕശɛ͏΍ձ
جas amended, supplemented or otherwise modified from
time to time, which was last amended on December 29, 2023 to
take effect on July 1, 2024
“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing Rules and
unless the context requires otherwise, refers to Mr. Liu, Yuejiang
LP and Qinmo LP
“Conversion of Domestic Shares
into H Shares”
the conversion of 313,843,147 Domestic Shares into H Shares on
a one-for-one basis upon the completion of the Global Offering.
Such conversion of Domestic Shares into H Shares had been
approved by the CSRC on November 21, 2024 and an application
for H Shares to be listed on the Stock Exchange has been made to
the Listing Committee
“CSDC” China Securities Depository and Clearing Corporation Limited
(ப΂ʮ̡ )
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍ଣ
ึ)
“Director(s)” the director(s) of our Company
“Domestic Shares” ordinary Shares in the share capital of our Company with a
nominal value of RMB1.00 each, which are subscribed for and
paid up in RMB and are unlisted Shares not currently listed or
traded on any stock exchange
“E.U.” the European Union
“Exchange Participant(s)” a person: (a) who, in accordance with the Listing Rules, may trade
on or through the Stock Exchange; and (b) whose name is entered
in a list, register or roll kept by the Stock Exchange as a person
who may trade on or through the Stock Exchange
“Extreme Conditions” Extreme conditions caused by a super typhoon as announced by
the government of Hong Kong
“FINI” “Fast Interface for New Issuance”, an online platform operated by
HKSCC that is mandatory for admission to trading and, where
applicable, the collection and processing of specified information
on subscription in and settlement for all new listings
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or modified
from time to time and where the context so permits, shall include
the HKSCC Operational Procedures
“Global Offering” the Hong Kong Public Offering and the International Offering
DEFINITIONS
–1 4–


--- page 24 ---
“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)
“Guide” Guide for New Listing Applicants issued by the Stock Exchange
in December 2023, as amended 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 Stock
Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be issued in the
name of HKSCC Nominees and deposited directly into CCASS to
be credited to your designated HKSCC Participant’s stock
account through causing HKSCC Nominees to apply on your
behalf, including by instructing your broker or custodian who is a
HKSCC Participant to give electronic application instructions via
HKSCC’s FINI System to apply for the Hong Kong Offer Shares
on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
“HKSCC Operational Procedures” the operational procedures of HKSCC, containing the practices,
procedures and administrative or other requirements relating to
HKSCC’s services and the operation and functions of the
Systems, 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 Offer Shares” the 2,000,000 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 and
Conditions of the Global Offering”)
DEFINITIONS
–1 5–


--- page 25 ---
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription by the
public in Hong Kong (subject to reallocation as described in the
section headed “Structure and Conditions of the Global
Offering”) at the Offer Price (plus brokerage, SFC transaction
levies, Stock Exchange trading fees and AFRC transaction levy),
on and subject to the terms and conditions described in this
prospectus and as further described in “Structure and Conditions
of the Global Offering—The Hong Kong Public Offering”
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in
“Underwriting—Hong Kong Underwriters” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated December 12, 2024 relating to
the Hong Kong Public Offering and entered into by and among
our Company, Mr. Liu, Yuejiang LP, Qinmo LP, Guotai Junan
Capital Limited, ABCI Capital Limited, Guotai Junan Securities
(Hong Kong) Limited, ABCI Securities Company Limited, the
Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries, as further
described in “Underwriting—Underwriting Arrangements and
Expenses”
“IAS” International Accounting Standards
“IFRSs” International Financial Reporting Standards, amendments, and
interpretations, as issued from time to time by the International
Accounting Standard Board
“independent third party(ies)” person(s) or company(ies), who/which, to the best of our
Directors’ knowledge, information and belief, having made all
reasonable enquiries, is/are not connected person(s) of our
Company within the meaning ascribed thereto under the Listing
Rules
“International Offer Shares” the 38,000,000 H Shares initially offered by our Company for
subscription pursuant to the International Offering together with,
where relevant, any additional H Shares which may be issued by
our Company pursuant to the exercise of the Over-allotment
Option (subject to reallocation as described in “Structure and
Conditions of the Global Offering”)
“International Offering” the offer of the International Offer Shares by the International
Underwriters at the Offer Price to persons outside the United
States in offshore transactions in accordance with Regulation S,
as further described in “Structure and Conditions of the Global
Offering”
DEFINITIONS
–1 6–


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“International Sanctions” all applicable laws and regulations related to economic sanctions,
export controls, trade embargoes and wider prohibitions and
restrictions on international trade and investment related
activities, including those adopted, administered and enforced by
the U.N., the U.S. government, the E.U. and its member states, the
U.K. government, the government of Australia
“International Sanctions Legal
Advisor”
Holman Fenwick Willan LLP, our legal advisors as to
International Sanctions laws in connection with the Listing
“International Underwriters” the group of international underwriters that is expected to enter
into the International Underwriting Agreement to underwrite the
International Offering
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into on or
around the Price Determination Date by, among others, our
Company, the Overall Coordinators and the International
Underwriters in respect of the International Offering, as further
described in “Underwriting—Underwriting Arrangements and
Expenses—The International Offering”
“Joint Bookrunners” the joint bookrunners as named in “Directors, Supervisors and
Parties Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in “Directors, Supervisors
and Parties Involved in the Global Offering”
“Joint Lead Managers” the joint lead managers as named in “Directors, Supervisors and
Parties Involved in the Global Offering”
“Joint Sponsors” Guotai Junan Capital Limited and ABCI Capital Limited
“Joint Sponsor-OCs” Guotai Junan Securities (Hong Kong) Limited and ABCI Capital
Limited
“Latest Practicable Date” December 6, 2024, being the latest practicable date for the
purpose of ascertaining certain information contained in this
prospectus prior to its publication
“Listing” listing of the H Shares on the Main Board of the Stock Exchange
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or around Monday, December 23,
2024, on which our H Shares of the Company are listed and from
which dealings therein are permitted to take place on the Stock
Exchange
DEFINITIONS
–1 7–


--- page 27 ---
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (as amended from time to time)
“Main Board” the stock market (excluding the option market) operated by the
Stock Exchange which is independent from and operated in
parallel with the GEM of the Stock Exchange
“Mr. Liu” Mr. Liu Peichao ( ᄎ੃൴), our founder, Controlling Shareholder,
chairman of our Board, executive Director and general manager
“Nomination Committee” the nomination committee of our Board
“Offer Price” the final price per H Share in Hong Kong dollars (exclusive of
brokerage fee of 1%, SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC transaction levy of
0.00015%) of not less than HK$18.80 and expected to be not
more than HK$20.80, at which Hong Kong Offer Shares are to be
subscribed, to be determined in the manner further described in
“Structure and Conditions of the Global Offering—Pricing and
Allocation”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer 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
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (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 6,000,000 additional H Shares at the Offer Price to,
cover over-allocations in the International Offering, if any,
further details of which are described in “Structure and
Conditions of the Global Offering”
“Overall Coordinators” the overall coordinators as named in “Directors, Supervisors and
Parties Involved in the Global Offering”
“Pathfinder SII(s)” has the meaning ascribed to it in Chapter 2.5 of the Guide
“PRC Legal Advisor” AllBright Law Offices (Shenzhen), being the legal advisor of our
Company as to the PRC laws
“Pre-IPO Investor(s)” the investor(s) from whom our Company obtained several rounds
of investments, details of which are set out in the section headed
“History and Corporate Structure—Pre-IPO Investments” in this
prospectus
DEFINITIONS
–1 8–


--- page 28 ---
“Price Determination Agreement” the agreement to be entered into by the Overall Coordinators (for
themselves and on behalf of the 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 around Thursday, December 19,
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 Underwriters) and our Company may agree, but
in any event no later than 12:00 noon on Thursday, December 19,
2024
“Primary Sanctioned Activity” has the meaning ascribed to it in chapter 4.4 of the Guide, which
means any activity in a country or territory subject to a general
and comprehensive export, import, financial or investment
embargo under sanctions related law or regulation of the Relevant
Jurisdiction or (i) with; or (ii) directly or indirectly benefiting, or
involving the property or interests in property of, a Sanctioned
Target by a listing applicant incorporated or located in a Relevant
Jurisdiction or which otherwise has a nexus with such jurisdiction
with respect to the relevant activity, such that it is subject to the
relevant sanctions law or regulation
“Qinmo LP” Shenzhen Qinmo Venture Capital Partnership (Limited
Partnership) (Υྫ), a
limited partnership established under the laws of the PRC on
October 17, 2017 and one of our Controlling Shareholders
“Regulation S” Regulation S under the U.S. Securities Act
“Relevant Activities” certain business dealings of our Group with certain customers in
the Relevant Countries
“Relevant Countries” means countries and regions of Armenia, Azerbaijan, Bosnia and
Herzegovina, Egypt, Iran, Hong Kong, Lebanon,
Myanmar/Burma, Romania, Russia (excluding Crimea, Luhansk,
Donetsk, Zaporizhzhia and Kherson regions), Serbia, Tunisia,
Turkey, Ukraine (excluding Crimea, Luhansk, Donetsk,
Zaporizhzhia and Kherson regions) and Venezuela
DEFINITIONS
–1 9–


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“Relevant Jurisdiction” has the meaning ascribed to it in chapter 4.4 of the Guide, which
means any jurisdiction that is relevant to the Company and has
sanctions related laws or regulations restricting, among other
things, its nationals and/or entities which are incorporated or
located in that jurisdiction from directly or indirectly making
assets or services available to or otherwise dealing in assets of
certain countries, governments, persons or entities targeted by
such laws or regulations. For the purposes of this prospectus, such
relevant jurisdictions shall include the U.S., the E.U., the U.K.,
the U.N. and Australia
“Relevant Persons” has the meaning ascribed to it in chapter 4.4 of the Guide, which
means the Company, our investors and shareholders and persons
who might, directly or indirectly, be involved in permitting the
listing, trading, clearing and settlement of our Shares, including
the Joint Sponsors, the Underwriters, the Stock Exchange,
HKSCC, HKSCC Nominees and the SFC
“Relevant Sanctions Authorities” means the relevant governmental authorities in the Relevant
Jurisdictions that administer their respective sanctions related
laws or regulations
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“Reporting Accountants” Ernst & Young
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Sanctioned Target” has the meaning ascribed to it in chapter 4.4 of the Guide, which
means any person or entity (i) designated on any list of targeted
persons or entities issued under the sanctions-related laws or
regulations of a Relevant Jurisdiction; (ii) that is, or is owned or
controlled by, a government of a country subject to
comprehensive sanctions; or (iii) that is the target of sanctions
under the law or regulation of a Relevant Jurisdiction because of a
relationship of ownership, control, or agency with a person or
entity described in (i) or (ii)
“Secondary Sanctionable Activity” has the meaning ascribed to it in chapter 4.4 of the Guide, which
means certain activity by a listing applicant that may result in the
imposition of sanctions against the Relevant Persons by a
Relevant Jurisdiction (including designation as a Sanctioned
Target or the imposition of penalties), even though the Company
is not incorporated or located in that Relevant Jurisdiction and
does not otherwise have any nexus with that Relevant Jurisdiction
“SFC” the Securities and Futures Commission of Hong Kong
DEFINITIONS
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“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of
Hong Kong), as amended, supplemented or otherwise modified
from time to time
“Share(s)” ordinary shares in the capital of our Company with a nominal
value of RMB1.00 each, comprising Domestic Shares and H
Shares
“Shareholder(s)” holder(s) of the Share(s)
“Sophisticated Independent
Investor(s)”
has the meaning ascribed thereto under the Listing Rules
“Stabilizing Manager” Guotai Junan Securities (Hong Kong) Limited
“Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited
“Supervisor(s)” member(s) of the supervisors committee of our Company
“Supervisory Committee” the supervisory committee of our Company
“Track Record Period” the three years ended December 31, 2023 and the six months
ended June 30, 2024
“U.K.” The United Kingdom of Great Britain and Northern Ireland
“U.N.” The United Nations
“Underwriters” the Hong Kong Underwriters and the International Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
“U.S.” or “United States” the United States of America, its territories, its possessions and
all areas subject to its jurisdiction
“U.S. Securities Act” the United States Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder
“US$,” “USD” or “U.S. dollars” United States dollars, the lawful currency of the United States
“White Form eIPO” the application for Hong Kong Offer Shares to be issued in the
applicant’s own name by submitting applications online through
the designated website of the White Form eIPO Service Provider
at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
DEFINITIONS
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“Yuejiang LP” Shenzhen Yuejiang Consultation Partnership (Limited
Partnership) (Υྫ), a limited
partnership established under the laws of the PRC on December
11, 2015, a share incentive platform and one of our Controlling
Shareholders
“%” percent
In this prospectus, the terms “associate, ” “close associate, ” “connected person, ” “core connected
person, ” “connected transaction, ” “subsidiaries” and “substantial shareholder” shall have the
meanings given to such terms in the 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.
F or 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; in the event of any
inconsistency, the Chinese versions shall prevail.
DEFINITIONS
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This glossary contains certain technical terms used in this prospectus in connection with us and
our business. Such terms and their meaning may not correspond to standard industry definitions or
usage.
“absolute positioning accuracy” the precision with which a robot can move to a specific point in its
workspace relative to a fixed coordinate system
“AI” artificial intelligence
“ARM architecture” a family of reduced instruction set computing architectures for
computer processors
“axis” or “axes” indicates a degree of freedom, where increasing the number of
axes allows the cobot to access a greater amount of space by
giving it more degrees of freedom
“CE” C onformité Européenne, a regulatory standard that verifies
certain products are safe for sale and use in the European
Economic Area
“collaborative robots” or “cobots” robots with operational robotic arms intended for direct
human-robot interaction or collaboration within a shared space or
where humans and robots are operating in proximity
“controllers” systems connected to the robot in order to control the movements
of the robots
“CRIA” China Robotics Industry Alliance, a non-profit social
organization founded by enterprises and institutions engaged in
robotics industry research and development, production and
manufacturing, and application services, universities and
colleges, scientific research institutes, user units, and other
related organizations in 2013
“cycle time” the time it takes a cobot to complete one full cycle of its
programmed task
“degree of freedom” refers to the count of independent axis of motion that a robotic
system can autonomously manipulate to perform tasks
“encoders” electromechanical devices designed to convert mechanical
motion into electrical signals, which can provide feedback on
angular velocity and displacement
GLOSSARY
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“e-skin technology” a non-contact collision prevention technology achieved by the
working principle of capacitive proximity sensors, which enable
cobots to detect approaching objects while operating at a safety
speed during the human-robot interaction. Such technology
allows cobots to respond rapidly to approaching objects by either
ceasing movement or taking evasive action to effectively prevent
the imminent collisions
“gear reducers” mechanical devices used to reduce the speed of a motor or power
source and increase its torque output
“GGII” Gaogong Robotics Industry Research Institute. Established in
2008, its research covers every aspect of the robotics industry
chain, including industrial robots, collaborative robots, mobile
robots, among others. GGII conducts field visits and telephone
surveys with over 500 companies across the industry chain each
year, and therefore has amassed a vast amount of market
information and industry data
“IFR” International Federation of Robotics, a specialized non-profit
organization established in 1987. With 90 members, including
national robotics associations, research and development
institutions, robot suppliers, and integrators, the IFR serves as a
global hub for the robotics community, indirectly representing
over 3,000 organizations
“I/O control” input/output control
“MIR” Marketing Intelligence Resource. Founded in 2008, it has many
years of research experience in robotics, automation, and
intelligent manufacturing industries. With a global perspective,
its research primarily focuses on markets in China, Japan,
Southeast Asia, as well as Europe and the United States
“Mordor Intelligence” Founded in 2014, Mordor Intelligence has worked with more than
6,000 organizations in over 20 industries, providing accurate data
and actionable insights
“repeat positioning accuracy” or
“repeatability”
indicates the ability of a cobot to consistently reproduce the same
pose within a given tolerance
“SCARA” selective compliance assembly robot arm, which refers to the
cobot’s ability to move freely and maintain stiffness in three axes
while being compliant in the final axis
GLOSSARY
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“servos” the controller for the joint motors in cobots, which enables
high-precision control of position, velocity, and acceleration,
ensuring that collaborative robots maintain high repeatability and
accuracy when performing complex tasks. Additionally, it can
precisely control output torque, allowing cobots to apply
appropriate force when executing tasks such as assembly and
gripping
“shipment volume” or
“cobot shipment volume”
the total unit number of cobots delivered from cobot
manufacturers to customers. According to the CIC Report, the
cobot shipment volume is a commonly used metric to measure the
market size of the cobot industry as it directly reflects the actual
market demand
“STEAM” science, technology, engineering, the arts, and math
“teleoperation” refers to the operation of a system or machine at a distance
GLOSSARY
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We have included in this prospectus forward-looking statements. Statements that are not
historical facts, including statements about our intentions, beliefs, expectations or predictions for
the future, are forward-looking statements.
This prospectus contains forward-looking statements that are, by their nature, subject to significant
risks and uncertainties, including the risk factors described in this prospectus. Forward-looking
statements can be identified by words such as “may,” “will,” “should,” “would,” “could,” “believe,”
“expect,” “anticipate,” “intend,” “plan,” “continue,” “seek,” “estimate,” or the negative of these terms or
other comparable terminology. Examples of forward-looking statements include, but are not limited to,
statements we make regarding our projections, business strategy and development activities as well as
other capital spending, financing sources, the effects of regulation, expectations concerning future
operations, margins, profitability and competition. The foregoing is not an exclusive list of all
forward-looking statements we make.
Forward-looking statements are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. We give no assurance that these expectations and
assumptions will prove to have been correct. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.
Our results may differ materially from those contemplated by the forward-looking statements. They are
neither statements of historical fact nor guarantees or assurances of future performance. We caution you
therefore against placing undue reliance on any of these forward-looking statements. Important factors
that could cause actual results to differ materially from those in the forward-looking statements include
regional, national or global political, economic, business, competitive, market and regulatory conditions
and the following:
• our business prospects;
• our business strategies and plans to achieve these strategies;
• future developments, trends and conditions in and competitive environment for the industries
and markets in which we operate;
• general economic, political and business conditions in locations where we operate;
• our financial condition and performance;
• our capital expenditure plans;
• our dividend policy;
• changes to the regulatory environment, policies, operating conditions of and general outlook in
the industries and markets in which we operate;
• our expectations with respect to our ability to acquire and maintain regulatory licenses or
permits;
• the extent and nature of, and potential for, future development of our business;
FORW ARD-LOOKING STATEMENTS
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• the actions of and developments affecting our competitors;
• the actions of and developments affecting our major customers and suppliers; and
• certain statements in the sections headed “Risk Factors,” “Industry Overview,” “Regulatory
Overview,” “Business,” “Financial Information,” “Relationship with our Controlling
Shareholders” and “Future Plans and Use of Proceeds” with respect to trends in interest rates,
foreign exchange rates, prices, volumes, operations, margins, risk management and overall
market trends.
Any forward-looking statement made by us in this prospectus speaks only as of the date on which it
is made. Factors or events that could cause our actual results to differ may emerge from time to time, and
it is not possible for us to predict all of them. Subject to the requirements of applicable laws, rules and
regulations, we undertake no obligation to update any forward-looking statement, whether as a result of
new information, future developments or otherwise. All forward-looking statements contained in this
prospectus are qualified by reference to this cautionary statement.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares may involve significant risks. Potential investors should read and
consider carefully all the information set out in this prospectus, and, in particular , should evaluate
the following risks and uncertainties before deciding to make any investment in our H Shares. You
should pay particular attention to the fact that we primarily conduct our operations in China, the
legal and regulatory environment of which in some respects may differ from that in Hong Kong. Any
of the risks and uncertainties listed below could have a material adverse effect on our business,
results of operations, financial condition or on the trading price of our H Shares, and could cause
you to lose all or part of your investment. The risks and uncertainties identified below are not the
only ones we face. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial may also affect our business and results of operations.
These factors are contingencies that may or may not occur , and we are not in a position to
express a view on the likelihood of any such contingency occurring. The information given is as of the
Latest Practicable Date unless otherwise stated, will not be updated after the date hereof, and is
subject to the cautionary statements in “F orward-looking Statements. ”
We are at a relatively early stage of commercialization of our cobot products, as we only met the
revenue requirement as set out in Rule 18C.03(4) of the Listing Rules in 2023 following our revenue
growth during the Track Record Period. In addition, we recorded net losses since our inception and expect
to continue to incur net losses after the Track Record Period. We believe there are certain risks and
uncertainties involved in our operations, some of which are beyond our control. We have categorized
these risks and uncertainties into (1) risks relating to our general operations and industry, (2) risks
relating to the research and development and intellectual property rights of our products, (3) risks
relating to our financial condition and need for additional capital, (4) risks relating to doing business in
the jurisdictions where we operate, (5) risks relating to International Sanctions, and (6) risks relating to
the Global Offering.
Additional risks and uncertainties that are presently not known to us or not expressed or implied
below or that we currently deem immaterial could also harm our business, results of operations and
financial condition. You should consider our business and prospects in light of the challenges we face,
including those discussed in this section.
RISKS RELATING TO OUR GENERAL OPERATIONS AND INDUSTRY
We have a limited operating history, which makes it difficult to evaluate our business and prospects,
and our historical growth may not be indicative of our future performance.
We have a limited operating history compared to some of our competitors. Our operations to date
have focused on conducting research and development activities and commercializing our products. As a
result of our limited operating history, and particularly in light of the rapidly evolving nature of the cobot
industry, it may be difficult to evaluate our current business and reliably predict our future performance.
Our historical results may not provide a meaningful basis for evaluating our business, results of
operations, financial condition and prospects, and we may encounter unforeseen expenses, difficulties,
complications, delays and other known or unknown factors, and may not be able to achieve promising
results in future periods. If we cannot address these risks and overcome these difficulties successfully,
our business and prospects will suffer.
RISK FACTORS
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We have a limited track record in the commercialization of our products.
We have a limited track record in the commercialization and sales and marketing of our products.
Our ability to successfully commercialize our future products may involve more inherent risks, take
longer and cost more than it would have if we were a company with a longer track record in
commercialization. In particular, the commercialization of new products requires additional resources.
The success of our sales and marketing efforts depends on our ability to attract, motivate and retain
qualified and professional employees who have, among other things, adequate technological knowledge
to communicate effectively with stakeholders in relevant industries as well as sufficient experience in
sales and marketing of our products.
Due to our limited track record in the commercialization of our products, there can be no assurance
that the sales results of our products will meet our expectation and forecast, that third parties will
purchase and deploy our products in their production lines and/or other use cases, or that we will be able
to fully maintain quality control over our products, which, individually or collectively, would materially
and adversely affect the commercialization of our products, and, in turn, would materially and adversely
affect our business, results of operations and financial condition.
The size of our addressable markets and the demand for our products may not increase as rapidly
as we anticipate due to a variety of factors, which may materially and adversely affect our business,
results of operations and financial condition.
We are pursuing opportunities in markets that are undergoing rapid changes, including
technological changes, and it is difficult to predict the timing and size of the opportunities for each of our
products. This prospectus contains estimates and forecasts concerning our industries that are based on
industry publications and reports or other publicly available information. These estimates and forecasts
involve a number of assumptions and limitations, and are subject to significant uncertainty. Similarly, our
internal estimates and forecasts are based on a variety of assumptions, including assumptions regarding
market acceptance of our cobot products and the manner in which those new and rapidly evolving markets
will develop. While we believe our assumptions and the data underlying our estimates and forecasts are
reasonable, these assumptions and estimates may not be correct and the conditions supporting our
assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these
underlying factors. If third-party or internally generated data prove to be inaccurate or we make errors in
our assumptions based on that data, the addressable markets for our products may be smaller than we have
estimated, our future growth opportunities and sales growth may be smaller than we estimate, and our
business, results of operations and financial condition may be materially and adversely affected.
The cobot industry is competitive. If we fail to compete with our competitors, our business, results
of operations and financial condition may be materially and adversely affected.
The cobot industry is competitive. We primarily compete with other companies that focus on the
development and distribution of cobot products. If we compete with players that have a longer operating
history than us, or if we do not have or in the future obtain more financial resources, leading
technological capabilities and broader customer base than our competitors, we may not be able to more
quickly and effectively respond to new or changing opportunities, technologies, regulatory requirements
or customer demand than our competitors.
RISK FACTORS
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We may also face competition with new entrants, who may offer more affordable and/or advanced
products, and thus increase the level of competition in the future. Increased competition could result in
lower sales volume, price reductions, shrunk profit margins or loss of market share. Further, we may be
required to make substantial additional investments in research and development, sales and marketing,
talents recruitment and retention, and acquisition of technologies complementary to, or necessary for, our
current and future products in order to respond to such competitive threats, and we cannot assure you that
such investments will be effective. If we are unable to compete successfully, or if competing successfully
requires us 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.
Developments in alternative technologies and products may adversely affect the demand for our
cobot products.
Our cobot products are a form of robotic automation built to work safely alongside human workers
in a shared, collaborative workspace for the improved performance of tasks and automation processes.
Advances in machine vision and AI, among others, make it possible for our cobot products to be aware of
their surroundings and perform multiple types of tasks safely in close proximity to human workers.
Development of alternative technologies and products which provide similar functions may materially
and adversely affect the growth prospects of the cobot industry. It is possible that new technologies or
non-robotic products may emerge as preferred alternatives. Such new technologies and products may be
more efficient, user-friendly and affordable than cobot products and may also render the use of cobot
products obsolete and unnecessary in certain use cases. Any failure by us or the cobot industry as a whole
to develop new or enhanced technologies or products to react to such alternative products could result in
the loss of competitiveness of the industry, decrease in market expansion opportunity, decreased revenue,
loss of talents and loss of market share to competitors. As a result, our business, results of operations and
financial condition may be materially and adversely affected.
We depend on sales to our distributors for a considerable portion of our revenue, and distributors
are expected to remain important in our sales network. If distributors are not able to operate
successfully or we fail to maintain good relationships with such distributors, our business, financial
condition and results of operations could be materially and adversely affected.
Our distributors are important to our business. In 2021, 2022, 2023 and the six months ended June
30, 2024, there were 344, 387, 358 and 224 distributors in our distribution network, respectively. We
expect that distributorship will remain an important component of our sales network. Our distributors
may not be able to market and sell our products successfully or maintain their competitiveness as a result
of various factors. For example, our distributors may not be able to successfully organize marketing
events that achieve desired results. If the sales volumes of our products to customers are not maintained
at a satisfactory level, our distributors may not place new orders with us, or they may reduce orders or
request discounts on the purchase price, and eventually, they may not renew the distribution agreement
with us. The loss of our distributors, or reduced orders from them, could adversely affect our access to
customers and our sales volume and revenue.
RISK FACTORS
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There is no assurance that they will do so or that we may be successful in detecting any
non-compliance, and non-compliance with the distribution agreements by any of our distributors could
tarnish our brand, disrupt our sales and damage our relationship with distributors. In addition, if we fail
to maintain our relationships with a majority of distributors, or our distributors fail to operate
successfully, our ability to effectively sell our products could be negatively impacted. These and similar
actions could also negatively affect our corporate and product image, which could result in a loss of
customers and decline in sales. Furthermore, distributors selling the same products in overlapping
markets may result in cannibalization or even competition among these distributors. We cannot assure
you that the expansion of our sales network will continue to be successful or will generate revenue as
expected.
Our distributors may not be able to manage their inventory level effectively and we may not be able
to track their sales and inventory level, which could cause us to incorrectly predict sales trends and
may damage the stability of our distribution network.
Failure to manage inventory level may strain our distributors’ financial resources and impair their
liquidity, which may lead to their reluctance or inability to purchase products from us. If they experience
decreased profitability or suffer losses as a result, they may quit our distribution network. Additionally,
distributors may, with or without any merit, complain about and attribute their slow inventory turnover to
us, harming our relationship with such distributors and potentially damaging our reputation among
distributors. If any of such incidents occurs, the stability of our distribution network may be impaired,
and our business, results of operations and financial condition may be materially and adversely affected.
Furthermore, we may not be able to track the sales and inventory level of our distributors. This could in
turn lead to our inability to accurately predict sales trends and forecast customer demand, which could
result in excess inventory levels or a shortage of products. There can be no assurance that we will be able
to successfully manage our inventory at a level appropriate for future customer demand.
We rely on our distributors to place our products into the market, and our distributor management
may not be as effective as we anticipate. Our distributors do not need our specific authorization to
engage sub-distributors, over whom we are not able to exert any influence.
In 2021, 2022, 2023 and the six months ended June 30, 2024, there were 344, 387, 358 and 224
distributors in our distribution network, respectively. As we believe that distributorship is an important
component of our sales network, any of the following events could cause fluctuations or declines in our
revenue and could have an adverse effect on our business, results of operations and financial condition:
• reduction, delay or cancellation of orders from one or more of our distributors;
• failure to renew distribution agreements and maintain relationships with our existing
distributors;
• failure to establish relationships with new distributors on favorable or even standard terms; and
• inability to timely identify and appoint additional or replacement distributors upon the loss of
one or more of our distributors.
We may not be able to successfully manage our distributors, and the cost of any consolidation or
further expansion of our distribution network may exceed the revenue generated from these efforts.
Furthermore, if the sales volumes of our products to distributors are not maintained at a satisfactory level,
RISK FACTORS
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or if distribution orders fail to track end customers’ demand, our distributors may not place new orders
for products from us or they may reduce the quantity of their usual orders. If any of our distributors fail
to distribute our products to their customers in a timely manner, it may result in overstock by our
distributors and affect our future sales. The occurrence of any of these factors could result in a significant
decrease in the sales volume of our products, and in turn, materially and adversely affect our business,
results of operations and financial condition.
Our distributors generally do not need our specific authorization to engage sub-distributors. We
cannot assure you that sub-distributors will at all times comply with our overall sales and distribution
policies or that they will not compete with each other for market share in respect of our products. If any
sub-distributor fails to distribute our products to its customers in a timely manner, overstocks or carries
out actions inconsistent with our business strategies, it may affect our future sales, which may in turn
materially and adversely affect our business, results of operations and financial condition.
We may face supply chain risks as a result of our reliance on a limited number of suppliers and
vendors for certain components, equipment and services.
Many suppliers and vendors provide parts, components, equipment and services that are used in the
production of our products and other aspects of our business. Where possible, we seek to have several
sources of supply. However, for certain parts, components, equipment and services, we rely on a limited
number of suppliers and vendors. The purchases from our top five suppliers in each year/period during
the Track Record Period was RMB52.8 million, RMB75.0 million, RMB60.1 million and RMB27.1
million, respectively, accounting for 61.2%, 52.5%, 37.1% and 37.0% of our total cost of sales in the
same years/period, respectively. The purchases from our largest supplier in each year/period during the
Track Record Period was RMB28.6 million, RMB34.8 million, RMB22.2 million and RMB10.7 million,
respectively, accounting for 33.2%, 24.4%, 13.7% and 14.5% of our total cost of sales in the same
years/period, respectively. The stability of operations and business strategies of our suppliers are beyond
our control, and we cannot assure you that we will be able to secure a stable relationship with such
suppliers. Identifying and qualifying alternative or additional suppliers and vendors is often a lengthy
process and can lead to production delays, interruptions to our production and additional costs, and such
alternatives are sometimes not available on commercially reasonable terms, or at all. The inability of
suppliers or vendors to deliver necessary production parts, components, equipment or services can
disrupt the production processes of our products and make it more difficult for us to implement our
business strategy. Suppliers and vendors periodically extend lead times, face capacity constraints, limit
supplies, increase prices, experience quality issues or encounter other issues that can interrupt or increase
the cost of our supply and services.
Increases in costs of the parts and components that we use in our products would adversely affect
our business, results of operations and financial condition.
Significant changes in the markets in which we purchase parts, components and other supplies for
the production of our products may adversely affect our profitability. In the event of such changes,
competitive and market pressures may limit our ability to recover increases in costs through increases in
prices we charge to our customers. The inability to pass on price increases to our customers when part or
component prices increase rapidly or are significantly higher than historical levels would adversely affect
our business, results of operations and financial condition.
RISK FACTORS
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We may not be able to fully maintain quality control over our products.
The quality of our products depends on the effectiveness of our quality control and quality
assurance, which in turn depends on factors such as the quality and reliability of parts and components
used, including those manufactured by ourselves and our manufacturing partners, the quality of our staff
and relevant training programs and our ability to ensure that our employees adhere to our quality control
and quality assurance protocols. However, we cannot assure you that our quality control and quality
assurance procedures will be effective in consistently preventing and resolving deviations from our
quality standards. Any significant failure or deterioration of our quality control and quality assurance
protocols could render our products unable to perform its regular functions, cause safety concerns that
may result in physical injuries to individuals, or harm our market reputation and relationship with
business partners.
In addition, the quality of parts, components and/or products manufactured by our suppliers that we
incorporate into our cobots is beyond our control. We cannot assure you that the parts, components and/or
products we procure from them are safe and free of defects or can meet the relevant quality standards. We
depend on the quality control procedures of our suppliers. In the event of any quality issues, we could be
subject to complaints and product liability claims and we may not be able to seek indemnification from
them. If we engage in legal proceedings against our suppliers, such proceedings may be time-consuming
and costly regardless of the outcomes. Any of the foregoing incidents may materially and adversely affect
our business, results of operations and financial condition.
We may be subject to product liability claims if our products contain defects, and we could incur
significant expenses to remediate such defects. As a result, our reputation could be damaged and we
could lose market shares, and our business, results of operations and financial condition may be
adversely affected.
Cobot products may contain errors, defects, security vulnerabilities or software issues that are
difficult to detect and correct, particularly when first introduced or when new versions or enhancements
are released. Despite internal testing, our products may contain serious errors or defects, security
vulnerabilities or software issues, which we are unable to successfully correct in a timely manner or at
all. Some errors or defects in our products may only be discovered after they have been commercialized
and deployed by our customers for their production lines or other use cases and we may incur costs
relating to product recall, repair or replacement. Furthermore, these issues could potentially lead to
lawsuits filed against us by our customers or other parties, exposing us to potential liabilities and
damages. We may also experience revenue loss, significant capital expenditures, delay or loss in market
acceptance and damage to our reputation and brand, any of which could adversely affect our reputation,
business, results of operations and financial condition.
Given that many of our customers use our products in production processes that are critical to their
businesses, any error or defect in our products could result in losses to our customers. Our customers may
seek compensation from us for any losses they suffer or cease conducting business with us altogether. A
claim brought against us by any of our customers would likely be time-consuming, costly to defend and
may materially and adversely affect our reputation and brand, making it difficult for us to sell and market
our products.
RISK FACTORS
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If we are unable to attract, retain and motivate key individuals, our business, results of operations
and financial condition would be materially and adversely affected.
Attracting and retaining key individuals, such as key management, technical staff, qualified
executives, engineers and sales representatives, are critical to our business, and in particular, to our
research and development endeavors, and the successful commercialization of our products. The
competition for highly skilled employees in our industry is increasingly intense. Changes in our
management team would also disrupt our business. Our management and senior leadership team has
significant industry experience, which makes them instrumental to our success. See “Directors,
Supervisors and Senior Management.” Changes in our management team may occur from time to time,
and we cannot predict whether significant resignations will occur or whether we will be able to recruit
qualified replacement. In addition, changes in the interpretation and application of employment-related
laws to our workforce practices may result in increased operating costs and less flexibility in how we
meet our changing workforce needs. See “Regulatory Overview—PRC Laws and Regulations—Laws and
Regulations in Relation to Labor Protection, Social Insurance and Housing Provident Funds.” To help
attract, retain and motivate key individuals, employee incentives such as share incentive schemes have
been, and will continue to be, an important part of our compensation. Our employee recruitment and
retention also depend on our ability to build and maintain a diverse and inclusive workplace culture and
be viewed as an employer of choice. If our share-based compensation or other compensation programs
and/or workplace culture cease to be viewed as competitive, our ability to attract, retain and motivate key
individuals would be weakened, which would in turn materially and adversely affect our business, results
of operations and financial condition.
Acquisitions, investments or strategic alliances may fail and materially and adversely affect our
reputation, business and results of operations.
We may in the future enter into strategic alliances with various third parties. Strategic alliances with
third parties could subject us to a number of risks, including risks associated with sharing proprietary
information, non-performance by the counterparty, and an increase in expenses incurred in establishing
new strategic alliances, any of which may materially and adversely affect our business. We may have
little ability to control or monitor their actions. To the extent strategic third parties suffer negative
publicity or harm to their reputation from events relating to their business, we may also suffer negative
publicity or harm to our reputation by virtue of our association with such third parties.
In addition, we may acquire additional assets, technologies or businesses that are complementary to
our existing businesses. Future acquisitions and the subsequent integration of new assets, technologies
and businesses into our own would require significant attention from our management and could result in
a diversion of resources from our existing businesses, which in turn could adversely affect our business.
Acquired assets, technologies or businesses may not generate the financial or operating results we expect.
In addition, acquisitions could result in the use of substantial amounts of cash, dilutive issuances of
equity securities, incurrence of debt, incurrence of significant goodwill impairment charges,
amortization expenses for other intangible assets and exposure to potential unknown liabilities of the
acquired business.
Our international strategy and ability to conduct business in international markets may be
adversely affected by legal, regulatory, political and economic risks.
Our sales network consists of direct sales and distributors with a global footprint in over 80
countries and regions, including major overseas markets such as the United States, the European Union,
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Japan and Southeast Asia. In 2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024,
revenue from markets outside of China was RMB83.9 million, RMB140.1 million, RMB169.5 million,
RMB70.7 million and RMB73.9 million, respectively, accounting for 48.1%, 58.1%, 59.1%, 64.4% and
61.4% of our total revenue in the same years/periods, respectively. International markets are significant
components of our growth strategy and may continue to require significant investment in the future,
which could strain our resources, adversely affect our performance, and add more complexity to our
operations. If any of our overseas operations, or our associates, agents or distributors, violate laws in the
relevant jurisdictions, we could become subject to sanctions or other penalties, which could adversely
affect our reputation, business, results of operations and financial condition.
We may be subject to the risks associated with international trade policies, geopolitics and trade
protection measures, including imposition of trade restrictions and sanctions, and our reputation,
business, results of operations and financial condition could be adversely affected.
Our operations are subject to potential 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. More than 99% of our cobot
products exported to the United States were subject to import tariffs during the Track Record Period
(except for de minimis shipments valued at or less than US$800). The tariff applicable to our cobot
products during the Track Record Period was generally 7.5% for education settings, ranged from 25% to
27.5% for industrial settings and 27.5% for commercial settings. Prior to the establishment of our U.S.
subsidiary, our distributors and direct customers in the U.S. were the importer of our cobot products and
were responsible to pay U.S. import tariffs. Therefore, the amount of U.S. import tariffs imposed on us
were nil and nil in 2021 and 2022, respectively. Since the establishment of our U.S. subsidiary in late
2022, the aforesaid sales model has begun to fade out, as we have gradually conducted sales to the U.S.
through our U.S. subsidiary. We began to incur U.S. import tariffs in 2023 in connection with our U.S.
subsidiary’s import of our cobot products from the PRC for subsequent sales. The U.S. sales conducted
by our U.S. subsidiary accounted for more than 66% and 90% of our total U.S. sales in 2023 and the six
months ended June 30, 2024, respectively. The total amount of tariffs incurred by our Group as a result of
our U.S. subsidiary’s import of products from the PRC for subsequent sales were approximately US$0.4
million and US$0.2 million in 2023 and the six months ended June 30, 2024, respectively. Margins on
sales of our products in certain countries and regions could be materially and adversely affected by
international trade regulations, including duties, tariffs and anti-dumping penalties. We may be forced to
adjust the price of our products due to any increased tariffs on our products in the future, which could
make our products less competitive. The U.S. government has also imposed economic and trade sanctions
directly or indirectly affecting technology companies. Such restrictions, and similar or more expansive
restrictions that may be imposed by the U.S. or other jurisdictions in the future, may be difficult or costly
to comply with and may materially and adversely affect our abilities to acquire technologies, systems,
parts or components that may be critical to our technology infrastructure, product offerings and business
operations. If any of us, or our Shareholders, Directors, management personnel, employees and business
partners, violate such laws, we could become subject to sanctions or other penalties, which could
adversely affect our reputation, business, results of operations and financial condition.
Meanwhile, we are subject to the risk that we, our employees or any third parties that we engage to
do work on our behalf in certain countries may take action determined to be in violation of
anti-corruption laws in any jurisdiction in which we conduct business, including the U.S. Foreign Corrupt
Practices Act (the “FCPA”). Any violation of the FCPA or any similar anti-corruption law or regulation
could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations
in certain jurisdictions and might adversely affect our reputation, business, results of operations and
financial condition.
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Our business growth and results of operations may be affected by changes in global and regional
macroeconomic conditions, natural disasters, health epidemics and pandemics, and social
disruption and other outbreaks.
Uncertainties about global economic conditions and regulatory changes and other factors including
fluctuation of interest rates, inflation level, unemployment, labor and healthcare costs, access to credit,
consumer confidence and other macroeconomic factors may pose risks and materially and adversely
affect demand for our products. In addition, natural disasters such as floods, earthquakes, sandstorms,
snowstorms, fire or drought, the outbreak of a widespread health epidemic or any severe epidemic disease
such as SARS, Ebola, Zika or the COVID-19, acts of war, terrorism or other force majeure events beyond
our control may disrupt our research and development, manufacturing and commercialization activities
and business operations, all of which could adversely affect our business, results of operations, financial
condition and prospects. In particular, COVID-19 has materially and adversely affected the Chinese and
global economy. There remain uncertainties about the dynamic of the COVID-19 pandemic, which may
have potential continuing impacts in the future if the pandemic and the resulting disruption were to
extend over a prolonged period.
If we fail to obtain and maintain the requisite licenses and approvals required in any jurisdictions
where we operate, our business, results of operations and financial condition may be materially and
adversely affected.
We are required to obtain and maintain the requisite licenses and approvals for our business in China
and other jurisdictions where we operate our business. We cannot assure you that we can successfully
update or renew the licenses required for our business in a timely manner or that these licenses are
sufficient to conduct all of our present or future businesses. Any failure to obtain or renew any approvals,
licenses, permits or certificates necessary for our operations and construction of our facilities, such as
construction work commencement permit, environmental protection inspection and fire safety approvals,
may result in enforcement actions thereunder, including orders issued by the relevant regulatory
authorities ceasing our operations, and may include corrective measures requiring capital expenditure or
remedial actions. Uncertainties exist regarding the interpretation and implementation of existing and
future laws, regulations and policies governing our business activities. We cannot assure you that we will
not be found in violation of any of the laws, regulations and policies currently in effect or any future laws,
regulations and policies. If we fail to complete, obtain or maintain any of the required licenses or
approvals or make the necessary filings in any of the jurisdictions where we operate our business, we may
be subject to various penalties, such as the imposition of fines and the 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.
Any failure to offer high-quality maintenance and support services for our customers may harm
our relationships with them and, consequently, our business.
Our policy allows products with defects to be repaired for free within the warranty period. As we
continue to grow our operations and support our customer base, we need to be able to continue to provide
efficient customer support that meets our customers’ needs at scale. We may not be able to recruit or
retain sufficient qualified support personnel with experiences in supporting customers of our products.
As a result, we may be unable to respond quickly enough to accommodate spikes in customer demand for
technical support or maintenance assistance. We may also be unable to modify the future scope and the
delivery of our maintenance services and technical support to compete with changes in the technical
services provided by our competitors. If we experience increased customer demand for support and
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maintenance, we may face increased costs that may affect 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. Any failure to maintain high-quality
maintenance and support services, or a market perception that we do not maintain high-quality
maintenance and support services for our customers, would harm our business.
Cobot products are usually purchased on a case-by-case or project-by-project basis and we
generally do not enter into long-term contracts with our major customers. If we fail to attract new
customers and/or retain existing customers, our business, financial conditions and results of
operation may be adversely affected.
Our customers usually purchase our products on a case-by-case or project-by-project basis and we
generally do not enter into long-term contracts with our major customers. Given such practice, there is no
assurance that our customers will make repurchases for our products frequently or at all. There is also no
assurance that the industry will be able to continuously attract new customers to support revenue growth
as it depends on a number of factors, including but not limited to the level of acceptance by customers, the
rate of expansion of use cases, and the changing customer preferences and demands. As such, if we fail to
attract new customers or retain existing customers, our business, results of operations and financial
conditions may be adversely affected.
We cannot guarantee that our growth strategies will be successfully implemented or bring about
outcomes as we expected.
We continue to execute a number of strategies to expand our business. See “Business—Growth
Strategies” and “Future Plans and Use of Proceeds” for details. However, expanding our business
involves risks and challenges. These business initiatives are new and evolving, some of which may prove
unsuccessful. It may also take a longer time than expected for us to develop the technologies and build
market acceptance of our products, and we may not have sufficient experience in executing these new
business initiatives effectively. We cannot assure you that any of these new business initiatives will
achieve our expected market acceptance and generate desired outcome. If our efforts fail to enhance our
monetization abilities, we may not be able to maintain or increase our revenues or recover any associated
costs, and our business, results of operations and financial condition may be materially and adversely
affected.
Any unexpected disruption at our production facilities could materially and adversely affect our
business, results of operations and financial condition.
Our ability to meet the demand of our customers and grow our business relies on the efficient, proper
and uninterrupted operation of our production plan and a constant and sufficient supply of utilities. In the
event of earthquake, fire, drought, flood or other natural disaster, political instability, riot or civil unrest,
extended outage of critical utilities or transportation systems, terrorist attack or other events that limit or
disrupt our ability to operate our production facilities, we may experience substantial losses, including
loss of revenue from disrupted production. We may also need to incur substantial additional expenses,
exceeding our insurance coverage to repair or replace any damaged equipment or facility. In addition, our
ability to manufacture and supply products and our ability to meet our delivery obligations to our
customers would be significantly disrupted and our relationships with our customers could be damaged,
which could have a material and adverse effect on our business, results of operations and financial
condition.
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Our insurance policies do not cover certain risks caused by war, nuclear contamination, tsunami,
pollution, acts of terrorism and civil disorder . Therefore, 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 believe we have adequate insurance coverage in connection with our business operations by
putting in place all the mandatory insurance policies required by PRC laws and regulations. As of the
Latest Practicable Date, we had insurance coverage for our goods in transit, properties and fixed assets,
plant and equipment and inventories, and maintained insurance policies covering product liability and
employee safety. However, it may not be adequate to fully compensate for all kinds of losses we may
suffer in the future. In particular, we do not carry insurance in respect of certain risks that we believe are
not insured under customary industry practice in mainland China, or which are uninsurable on
commercially acceptable terms, if at all, such as those caused by war, nuclear contamination, tsunami,
pollution, acts of terrorism and civil disorder. In addition, our insurers generally review our policies
every year and we cannot guarantee that our policies can be renewed on similar or other acceptable terms,
or at all. Furthermore, if we suffer unexpected severe losses or losses that far exceed the policy limits, it
could materially and adversely affect our business, results of operations and financial condition.
Our business and prospects depend on our ability to build our brand and reputation, which could be
harmed by negative publicity regarding our brand, Directors, employees, or products, whether
warranted or not.
We believe that maintaining and enhancing our brand is of significant importance to the success of
our business. Since we operate in a highly competitive market, brand maintenance and enhancement
directly affect our ability to maintain our market position. The successful promotion of our brand will
depend on the effectiveness of our marketing efforts and amount of word-of-mouth referrals we received
from satisfied customers. We may incur extra expenses in promoting our brand. However, we cannot
assure you that these activities are and will be successful or that we can achieve the brand promotion
effect we expect. In addition, negative publicity about our brand, Directors, employees, or products,
whether warranted or not, may adversely affect our brand, reputation and business. Certain of such
negative publicity may come from malicious harassment or unfair competition acts by third parties,
which are beyond our control.
Our information technology and software systems may encounter malfunction, unexpected system
failure, interruption, insufficiency or security breaches.
We rely on our information technology and software systems to effectively manage various
customers’ and suppliers’ data, production and operation data, and financial and human resources data.
Any significant failure in our information technology and software systems could result in transaction
errors, processing inefficiencies and loss of sales and customers, or lead to loss or leakage of confidential
information. We collect and store sensitive personal information such as customer contact information
and their addresses for the purpose of our business needs. The security of such information is of
paramount importance. Any security and privacy breaches on customer information may damage our
customer relations and our reputation and may expose us to legal liability.
Our information technology and software systems may be subject to damage or interruption,
primarily due to unexpected emergency circumstances beyond our control, including power outages, fire,
natural disasters, systems failures, security breaches, unauthorized access to our information systems,
hackings intended to cause malfunctions, loss or corruption of data, software, hardware or other
computer equipment, intentional or inadvertent transmission of computer viruses and other similar
events. We may also encounter problems when upgrading our systems, which could disrupt our
operations and adversely affect our results of operations.
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Our business is subject to seasonality.
We generally recognize a significant portion of our revenue in the fourth quarter of our fiscal year,
primarily because (1) certain of our customers, in particular those that use our cobot products in
industrial and education settings, tend to place their order and/or complete their inspection in the fourth
quarter in accordance with their own business practices, which causes such revenue to be recognized in
the fourth quarter according to relevant revenue recognition policy; and (2) our customers tend to
schedule their procurement in advance of the major holidays in China and overseas markets, many of
which are in the fourth quarter, to avoid potential supply chain issues associated with the holidays. Our
revenue from fourth quarter accounted for 31.8%, 44.4% and 40.8% of our total revenue in 2021, 2022
and 2023, respectively. In contrast, the first quarter is usually our low season. The degree of seasonality
may vary from year to year due to conditions in the industry and other factors, which makes it difficult for
us to predict the level of demand with precision. If seasonal demand exceeds our expectation, we may not
have sufficient stock or arrange for timely production and delivery. If seasonal demand is lower than our
expectation, we could be left with excess inventory, higher working capital and liquidity requirements, as
well as the risk of impairment losses on our inventory. Furthermore, our operating and financial results
for an interim period may not be representative of our overall performance for a year. We expect to
continue to experience seasonal fluctuations in our revenue, results of operations and financial condition,
which could result in volatility and adversely affect the price of our H Shares.
Failure to detect or prevent fraudulent or illegal activities or other misconduct by our employees,
customers, suppliers or other third parties may materially and adversely affect our business.
We are exposed to fraudulent or illegal activities or other misconducts by our employees, customers,
suppliers or other third parties, which could subject us to liabilities, fines and other penalties imposed by
government authorities and negative publicity. There can be no assurance that our controls and policies
will prevent fraud or illegal activity by such persons or that similar incidents will not occur in the future.
Any illegal, fraudulent, corrupt or collusive activity by our employees, customers, suppliers or other third
parties, including, but not limited to, violations of anti-corruption or anti-bribery laws, could subject us
to negative publicity which could severely damage our brand and reputation and, if conducted by our
employees, further subject us to significant financial and other liabilities to third parties and fines and
other penalties imposed by government authorities. As such, any failure to detect and prevent fraudulent
or illegal activities or other misconduct by our employees, customers, suppliers or other third parties
could materially and adversely affect our business, results of operations and financial condition.
We may be involved in legal proceedings and commercial or contractual 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. For instance, as of the Latest Practicable Date, we had initiated legal proceedings
against a former employee, requesting such employee to return his partnership interest in Yuejiang LP
awarded for share incentive purpose to Mr. Liu and seeking for an enforcement of such transfer of
partnership interest, pending ruling on jurisdiction by the High People’s Court of Guangdong Province
(৫ ). See “History and Corporate Structure—Corporate Structure.” We cannot assure
you that we will not be involved in various legal 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 and financial condition.
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We may be required to make additional contributions of social insurance fund and/or housing
provident fund and late payments and fines under PRC laws and regulations.
Companies operating in the PRC are required to participate in various employee benefit plans,
including social insurance fund and housing provident fund and contribute to the amounts equal to certain
percentage of salaries, including bonuses and allowances, of their employees up to a maximum amount
specified by the local government from time to time at locations where they operate their business.
During the Track Record Period, we did not make adequate contributions to the social insurance and
housing provident fund with respect to certain of our employees, as required by the relevant PRC laws
and regulations. The total shortfall during the Track Record Period was approximately RMB33.1 million.
As a result, we may be required to make additional contributions of social insurance fund and/or housing
provident fund and late payments and fines under PRC laws and regulations.
As advised by our PRC Legal Advisor, if the competent PRC government authority determines that
the social insurance contributions we made for our employees violate the requirements under the relevant
PRC laws and regulations, we may be required to pay all outstanding social insurance contributions
within a stipulated period, with late fees at a daily rate of 0.05% of the outstanding amount, accruing from
the date when the social insurance contributions were due. As of June 30, 2024, the maximum amount of
shortfall and late fees was RMB53.3 million. As of the Latest Practicable Date, no administrative action
or penalty had been imposed by the relevant regulatory authorities with respect to our social insurance
and housing provident fund contributions, nor had we received any order to settle the shortfall. As
advised by our PRC Legal Advisor, in accordance with the existing applicable laws, regulations and
policies, the likelihood that we would be subject to administrative penalties for the shortfall of social
insurance and housing provident fund is remote. In the unlikely event that we are required to settle the
shortfall of social insurance contribution, if this payment is not made within the stipulated period, the
competent authority may further impose a fine of one to three times of the overdue amount on us.
However, we believe that the competent authority will not impose such fine on us as we undertake to
make full contributions or to pay the shortfall within a prescribed time period if and when requested by
the competent government authorities. In addition, pursuant to relevant PRC laws and regulations, in case
of a failure to pay the full amount of housing provident fund, the competent PRC government authority
may require us to pay the outstanding amount within a stipulated period. If the payment is not made
within such stipulated period, an application may be made to the PRC courts for compulsory
enforcement. We cannot assure you that we will not be subject to any order to rectify the non-compliance
in the future, nor can we assure you that there are no, or will not be any, employee complaints regarding
payment of the outstanding amount of the social insurance and housing provident fund contributions
against us, or that we will not receive any claims in respect of the outstanding amount of the social
insurance and housing provident fund contributions under national laws and regulations. In addition, we
may incur additional expenses to comply with such laws and regulations promulgated by the PRC
government or relevant local authorities.
Furthermore, during the Track Record Period, we engaged third-party agencies to make such
contributions on our behalf for certain employees, which was not in strict compliance with applicable
PRC laws and regulations. We implemented such arrangements primarily because these employees were
located in cities where we did not have any registered operating entities. During the Track Record Period,
such third-party agencies made a total of RMB0.2 million of social insurance and housing provident fund
contributions on behalf of us. We are in the process of rectifying the non-compliance with respect to
payment of social insurance and housing provident fund contributions through third-party agencies,
including transferring the social insurance and housing provident funds contributions from such agencies
to our subsidiaries and branches. As of June 30, 2024, we engaged third-party agencies for paying social
insurance or housing provident funds to 11 employees. As advised by our PRC Legal Advisor, if the
validity of such arrangements is challenged by competent PRC authorities, we might be subject to
additional contributions, late payment fees and/or penalties required by relevant PRC laws and
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regulations for failing to discharge our obligations in relation to payment of social insurance and housing
provident funds as an employer or be ordered to rectify such practice. We cannot assure you that relevant
competent government authorities will not take the view that such third-party agency arrangements do
not satisfy the requirements under the relevant PRC laws and regulations. We might also be subject to
labor disputes arising from such arrangements with the relevant employees.
We lease properties in various place as premises primarily for our office spaces. Any non-renewal of
leases, substantial increase in rent, or any third-party or government challenge to our leasehold
interest may affect our business and financial performance.
As we lease properties in various places as premises primarily for our office space, our operations
are susceptible to fluctuations in the property rental market. Before the expiry of each of our leases, we
have to negotiate the terms of renewal with respective lessors. The terms of the lease agreements for our
office space typically vary from one to five years. There is no assurance that our existing leases would be
renewed on similar or favorable terms or at all, in particular with respect to the amount of rent and the
term of the lease. Any substantial increase in the rent of our leased properties may increase our property
rental and related expenses, which could materially and adversely affect our profitability. There is also no
assurance that our existing leases will not be terminated early by the lessors before the expiry of the
relevant term. If we are required to relocate our office space, there is no assurance that we will be able to
identify comparable locations in a timely manner or at all or that we will secure a lease on comparable
terms.
As of the Latest Practicable Date, we were unable to file the lease agreements for registration with
respect to 12 of our leased properties in China due to the lessors’ failure to provide us with valid property
ownership certificates or other necessary documents required for the registration. If these lessors are not
the legal owners or have not obtained the proper authorization from the legal owners of such premises, the
legal owners of such premises or third-party tenants that have leased from the legal owners will have
ground to challenge the validity of our leasehold interest in the affected premises.
Under the relevant PRC laws and regulations, the parties to a lease agreement have the obligation to
register and file the executed lease agreement. As advised by our PRC Legal Advisor, the validity and
enforceability of the lease agreements are not affected by the failure to register or file the lease
agreements with the relevant government authorities. According to the relevant PRC regulations, we may
be ordered by the relevant government authorities to register the relevant lease agreements within a
prescribed period, and we may be subject to a fine ranging from RMB1,000 to RMB10,000 for each
non-registered lease if we fail to comply.
Additionally, if disputes or government actions due to title challenges arise to the above-described
properties, we may encounter difficulties in continuing to lease such properties and may be required to
relocate. If any of our leases are terminated or voided as a result of challenges from third parties or
government agencies, we would need to seek alternative premises and incur relocation costs. We cannot
assure you that we will be able to relocate such operations to suitable alternative premises, and any such
relocation may result in disruption to our business operations and result in loss of earnings. We also
cannot assure you that we will be able to effectively mitigate the possible adverse effects that may be
caused by such disruption, including loss and costs. Any of such disruption, loss or costs could materially
and adversely affect our business, results of operations and financial condition.
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RISKS RELATING TO THE RESEARCH AND DEVELOPMENT AND INTELLECTUAL
PROPERTY RIGHTS OF OUR PRODUCTS
If we are unable to develop and introduce new products, our future business, results of operations,
financial condition and competitive position would be materially and adversely affected.
Our future business, results of operations, financial condition and competitive position depend on
our ability to develop and introduce new and enhanced cobot products that incorporate the latest
technological advancements. We may encounter unexpected technical and production challenges or
delays in completing the development of new and enhanced products and/or ramping up production in a
cost-efficient manner. Successful product development and upgrade not only requires us to invest
significant resources in research and development and also require that we:
• design innovative, accurate, and safety-enhancing functions that differentiate our products
from those of our competitors;
• continuously improve the reliability of our current technology stack;
• respond effectively to technological advancements and product releases by our competitors;
and
• quickly and cost-effectively adjust to evolving customer demands, market conditions and
industry trends.
If we are unable to complete the development of new and enhanced products and/or technologies
without delay or at all, we may not be able to satisfy our customers’ demand or achieve broader market
acceptance of our products, and our business, results of operations, financial condition and competitive
position would be materially and adversely affected.
We have been investing, and intend to continue to invest, heavily in research and development,
which may adversely affect our profitability and operating cash flow and may not generate the
results we expect to achieve.
We have been investing, and expect to continue to invest, heavily in our research and development
efforts. Our research and development expenses increased from RMB46.9 million in 2021 to RMB70.5
million in 2023, and were RMB31.2 million and RMB31.4 million in the six months ended June 30, 2023
and 2024, respectively. The cobot industry is subject to rapid technological changes and is quickly
evolving in terms of technological innovation. We need to invest significant resources, including
financial resources, in research and development to make technological advances in order to maintain the
competitiveness of our products or expand our product offerings. As a result, we expect to continue to
incur significant research and development expenses in the future.
However, we cannot guarantee that our efforts will achieve the outcomes as we anticipate. The
outcomes of research and development activities are inherently uncertain. Even if we succeed in our
research and development efforts and generate the results as we expect, we may still encounter practical
difficulties in commercializing our products incorporating our research and development outcomes. New
technologies could render our existing technologies and/or products or technologies and/or products we
are developing obsolete or unattractive, thereby rendering us unable to recover research and development
costs, which could materially and adversely affect our business, results of operations and financial
condition.
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Our research and development efforts may not translate into contribution to our results of operations
for several years, if at all, and even when they do, such contributions may not meet our expectations, and
we may never recover the costs of such efforts, which would materially and adversely affect our business,
results of operations, financial condition and competitive position.
We may not be able to obtain or maintain adequate intellectual property rights protection for our
products, or the scope of such protection may not be sufficiently broad.
Our success depends in a large part on our ability to protect our proprietary technologies as well as
our products from competition by obtaining, maintaining and enforcing our intellectual property rights.
We have been protecting the proprietary technologies that we consider commercially important by,
among others, filing patent applications in China and other jurisdictions. As of the Latest Practicable
Date, we had 653 registered patents, including 217 invention patents, 303 utility model patents and 133
design patents, and filed over 180 patent applications which were pending approval. See
“Business—Intellectual Property Rights.” The patent application process may be expensive and
time-consuming, and we may not be able to file and prosecute all necessary or desirable patent
applications at a reasonable cost or in a timely manner, if at all. In addition, we may fail to identify
patentable aspects of our research and development outputs before it is too late to obtain patent
protection. As a result, we may not be able to prevent competitors from developing and commercializing
competitive products in all such fields.
Patents may be invalidated, and patent applications may not be granted for several reasons,
including known or unknown prior deficiencies in the patent application or the lack of novelty of the
underlying invention or technology. Even if our patent applications are successfully granted, such grant
may not be in a form that can provide us with meaningful protection, prevent competitors from competing
with us, or otherwise provide us with any competitive advantage. Our competitors may be able to
circumvent our patents by developing similar or alternative technologies or products in a non-infringing
manner. Therefore, the grant of a patent application is not conclusive as to its inventor, scope, validity or
enforceability, and our patents may be challenged in the courts or patent offices in China and/or other
jurisdictions.
Further, although various extensions may be available, the life of a patent and the protection it
affords are limited. For example, from the date of application, invention patents are valid for 20 years,
utility model patents are valid for 10 years, and design patents filed since June 1, 2021 are valid for 15
years. We may face competition for any approved products even if we successfully obtain patent
protection once the patent life expires for such products. Any of the foregoing could materially and
adversely affect our business, results of operations, financial condition and competitive position.
We may become involved in lawsuits to protect or enforce our intellectual property, which could be
expensive, time-consuming and unsuccessful. Our patent rights relating to our products could be
found invalid or unenforceable if being challenged in court or before the China National
Intellectual Property Administration or similar intellectual property agencies in other
jurisdictions.
Competitors may infringe upon our patent rights or misappropriate or otherwise violate our
intellectual property rights. To counter infringement or unauthorized use, litigation may be necessary to
enforce or defend our intellectual property rights, protect our trade secrets, or determine the validity and
scope of our own intellectual property rights or the proprietary rights of others. This can be expensive and
time-consuming. Any claims that we assert against perceived infringers may provoke these parties to
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assert counterclaims against us alleging that we infringe upon their intellectual property rights. Many of
our existing and potential competitors have greater resources to enforce and/or defend their intellectual
property rights than we do. We may not be able to prevent third parties from infringing upon or
misappropriating our intellectual properties. An adverse result in any litigation proceeding could put our
patents, as well as any patents that may be granted in the future from our pending patent applications, at
risk of being invalidated, held unenforceable or narrowly interpreted.
Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigations, some of our confidential information could be compromised by
disclosure during litigation. Defendant counterclaims alleging invalidity or unenforceability are
commonplace and can be asserted on numerous grounds. Third parties may also raise similar claims
before administrative bodies in China or other jurisdictions, even outside the context of litigation. Such
proceedings could result in revocation or amendment to our patents in such a way that they no longer
cover and protect our existing and/or future products. The outcome following legal assertions of
invalidity and unenforceability is unpredictable. If a defendant were to prevail on a legal assertion of
invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on
our existing and/or future products, which could materially and adversely affect our business, results of
operations and financial condition.
If third parties claim that we infringe upon their intellectual property rights, we may incur
liabilities and financial penalties and may have to redesign or discontinue selling relevant products.
Some of our competitors have large patent portfolios and may claim that the commercial use of our
products has infringed upon their patents. These patents have broad claims, so it might be alleged that
certain features of our products fall within the claims of such patents. Therefore, our competitors may
initiate legal proceedings alleging that we are infringing upon, misappropriating or otherwise violating
their intellectual property rights in connection with the commercialization of relevant products. We
cannot assure you that we or our products will not infringe any intellectual property rights held by third
parties in the future. We may face claims of infringement of third parties’ proprietary rights or claims for
indemnification resulting from infringement arising from our operations or the design, development and
distribution of our products. In addition, we may be unaware of intellectual property registrations or
applications relating to our products or business operations that may give rise to potential infringement
claims against us. There may also be technologies licensed to and relied on by us that are subject to
infringement or other corresponding allegations or claims by third parties.
Companies in the cobot industry may use intellectual property litigation to gain a competitive
advantage. Whether a product or solution infringes upon a patent involves an analysis of complex legal
and factual issues, the determination of which is often uncertain. We may hire employees who have
previously worked for our competitors or other companies in relevant industries. There can be no
assurance that such employees will not use their previous employers’ proprietary know-how or trade
secrets in their work for us, which could result in litigation against us. Our competitors may also have
filed for patent protection which is not as yet a matter of public knowledge or claim trademark rights that
have not been revealed through our searches of relevant public records. Our efforts to identify and avoid
infringing upon third parties’ intellectual property rights may not always be successful. Any claims of
patent or other intellectual property infringement, regardless of their merit, could:
• be expensive and time-consuming to defend;
• cause us to pay substantial damages to third parties;
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• forbid us from making or selling products that incorporate the challenged intellectual property;
• require us to redesign, reengineer or rebrand our products;
• cause us to enter into royalty or licensing agreements in order to obtain the right to use a third
party’s intellectual property, which agreements may not be available on terms acceptable to us
or at all;
• divert the attention of our management; or
• result in customers terminating, deferring or limiting their purchase of the affected products
until resolution of the litigation.
We cannot be certain that our operations or any aspects of our business do not or will not infringe
upon or otherwise violate patents, copyrights or other IP rights held by third parties. We have been, and
may from time to time in the ordinary course of our business be, confronted with claims or allegations
relating to intellectual property infringement. Such claims may or may not escalate to legal proceedings,
the outcomes of which are unpredictable. In case of any disputes or lawsuits, there can be no assurance
that we will be able to prevail in our defense or reverse any unfavorable judgment, ruling or decision
against us. Any of these or future proceedings or actions or claims, with or without merit, could be costly
and distract our management from day-to-day operations. We may incur substantial legal expenses in
defending against such infringement claims, regardless of their merits. If we fail to successfully defend
against these claims or do not prevail in such proceedings, we may be prohibited from using certain IP
rights, subject to substantial amounts of damages, fines or penalties or ordered to cease operations of
certain of our business, which may in turn have a material and adverse effect on our business, financial
condition and results of operations, as well as cause negative publicity and tarnish our reputation.
Obtaining and maintaining our patent protection depends on compliance with various procedural,
documentary, fee payment and other requirements imposed by governmental patent agencies, and
our patent protection could be reduced or eliminated for non-compliance with these requirements.
The China National Intellectual Property Administration and various governmental patent agencies
in other jurisdictions require compliance with a number of procedural, documentary, fee payment and
other similar provisions during the patent application process and over the lifetime of the patent.
Non-compliance events, including failure to respond to official actions within prescribed time limits,
non-payment of periodic maintenance fees, and failure to properly legalize and submit formal documents,
can result in abandonment or lapse of the patent or patent application, leading to partial or complete loss
of patent rights in the relevant jurisdictions. In any such event, our competitors might be able to enter the
market, which would materially and adversely affect our business, results of operations and financial
condition.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability
to protect our products.
The scope of patent protection in various jurisdictions is uncertain. Changes in either the patent laws
or their interpretation in China or other jurisdictions may diminish our ability to protect our inventions,
obtain, maintain, defend and enforce our intellectual property rights and, more generally, could affect the
value of our intellectual property or narrow the scope of our patent rights. We cannot predict whether the
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patent applications we are currently pursuing and may pursue in the future will be granted as patents in
any particular jurisdiction or whether the claims of any future granted patents will provide sufficient
protection from competitors. The coverage claimed in a patent application can be significantly reduced
before the patent is granted, and its scope can be reinterpreted after such grant.
Even if our patent applications are successfully granted, such grant may not be in a form that can
provide us with any meaningful protection, prevent competitors or other third parties from competing
with us, or otherwise provide us with any competitive advantage. As a result, the grant of patent
application, scope, validity, enforceability and commercial value of our patent rights are highly
uncertain.
We may be unable to protect the confidentiality of our trade secrets, and we may be subject to
claims that we, or our employees or our business partners have wrongfully used or disclosed trade
secrets allegedly owned by others.
In addition to our registered patents and patent applications, we rely on trade secrets, including
unpatented know-how, technology and other proprietary information, to protect our products and thus
maintain our competitive position. We protect these trade secrets, in part, by entering into non-disclosure
and confidentiality agreements, non-compete covenants or include such undertakings in the agreements
with parties that have access to them. We also enter into employment agreements with our employees that
include undertakings regarding assignment of inventions and discoveries. Nevertheless, there can be no
guarantee that an employee or a third party will not make an unauthorized use or disclosure of our
proprietary confidential information. This might happen intentionally or inadvertently. It is possible that
a competitor will gain access to such information and make use of such information, and that our
competitive position will be compromised, despite any legal action we might take against such persons.
In addition, to the extent that our employees or business partners use intellectual property owned by
others in their work for us, disputes may arise as to the rights in related or resulting know-how and
inventions.
Trade secrets are difficult to protect. Our employees or business partners might intentionally or
inadvertently disclose our trade secret information to competitors, or our trade secrets may otherwise be
misappropriated. Enforcing a claim that a third party illegally obtained and/or is using any of our trade
secrets is expensive and time-consuming, and the outcome is unpredictable. We also seek to enter into
agreements with our employees that obligate them to assign any inventions created during their work for
us to us. However, we may not obtain these agreements in all circumstances and the assignment of
intellectual property under such agreements may not be self-executing. It is possible that technology
relevant to our business will be independently developed by a person that is not a party to such agreement.
Furthermore, if the employees who are parties to these agreements breach the terms of these agreements,
we may not have adequate remedies for any such breach, and we could lose our trade secrets and
inventions through such breaches. We may be involved in claims by or against us related to the ownership
of such intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying
monetary damages, we may lose valuable intellectual property rights. Even if we are successful in
prosecuting or defending against such claims, litigation could result in substantial costs and be a
distraction to our management and research and development personnel.
We may not be able to protect our intellectual property rights globally.
Filing, prosecuting and defending patents on our technologies globally can be extremely expensive
and time-consuming. We may also encounter difficulties in protecting and defending such rights in
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overseas jurisdictions. Consequently, we may not be able to prevent third parties from practicing our
inventions in all countries and regions outside the jurisdictions where we registered our intellectual
properties. Competitors may use our technologies in jurisdictions where we have not obtained patent
protection to develop their own products. Our patents or other intellectual property rights may not be
effective or sufficient to prevent them from competing with us.
Many companies have encountered significant problems in protecting and defending intellectual
property rights in overseas jurisdictions. The legal systems of many other countries and regions do not
favor the enforcement of patents and other intellectual property protection, which could make it difficult
for us to stop the infringement of our patents in such countries.
Proceedings to enforce our patent rights in overseas jurisdictions could result in substantial cost and
divert our resources and attention from other aspects of our business, could put our patents at risk of
being invalidated or interpreted narrowly and our patent applications at risk of rejection, and could
provoke third parties to assert claims against us. We may not prevail in lawsuits that we initiate or be
awarded the damages or other remedies, if any, as we deem sufficient. Accordingly, our efforts to enforce
our intellectual property rights around the world may be inadequate to obtain a significant commercial
advantage from the intellectual properties that we develop.
RISKS RELATING TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL
CAPITAL
We may not be able to obtain additional capital when desired on favorable terms or at all.
A majority of our operating expenses are for research and development activities. Our capital
requirements will be subject to many factors, including, but not limited to:
• technological advancements;
• market acceptance of our products and product and solution enhancements, and the overall
level of sales of our products;
• research and development expenses;
• our relationships with our customers and suppliers;
• our ability to control costs;
• sales and marketing expenses;
• enhancements to our infrastructure and systems and any capital improvements to our facilities;
• potential acquisitions of businesses and product lines; and
• general economic conditions, inflation, rising interest rates, and international conflicts and
their impact.
If our capital requirements are materially different from those currently planned, we may need
additional capital sooner than anticipated. Additional financing may not be available on favorable terms,
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on a timely basis, or at all. If adequate funds are not available or are not available on acceptable terms, we
may be unable to continue our operations as planned, develop or enhance our products, expand our sales
and marketing workforce, take advantage of future opportunities or respond to competitive pressures.
We expect to incur significant research and development expenses and capital expenditures for our
business operations, research and development and expansion plans, which may adversely affect
our short-term cash flow, liquidity and profitability.
Our research and development expenses were RMB46.9 million, RMB52.1 million, RMB70.5
million, RMB31.2 million and RMB31.4 million in 2021, 2022, 2023 and the six months ended June 30,
2023 and 2024, respectively. See “Financial Information—Key Components of Our Consolidated Income
Statements—Research and Development Expenses.” Our capital expenditures were RMB44.6 million,
RMB23.6 million, RMB82.9 million and RMB8.8 million in 2021, 2022, 2023 and the six months ended
June 30, 2024, respectively. See “Financial Information—Capital Expenditures and Commitments.” We
expect to incur significant capital expenditures for the research and development of our future products,
purchase of property, plant and equipment and purchase of intangible assets. Inherent risk exists for such
significant research and development expenditures and capital expenditures as our investment may not
succeed or generate the benefits that we expect, which could materially affect our profitability. Even if we
achieve our goals for such investment, our short-term cash flow and liquidity may be adversely affected.
While we intend to explore alternative arrangements to reduce the capital intensity of any future
expansion, there is no assurance this will be successful.
We have incurred significant net losses and recorded operating cash outflows during the Track
Record Period, and may not be able to achieve or subsequently maintain profitability in the near
future.
Since our inception, we have incurred net losses. In 2021, 2022 and 2023, we had losses for the year
of RMB41.8 million, RMB52.5 million and RMB103.3 million, respectively, and in the six months ended
June 30, 2023 and 2024, we had losses for the period of RMB51.7 million and RMB59.9 million,
respectively. We may continue to incur net losses in the short term, as we are in the stage of expanding our
business and operations in the rapidly growing cobot market and are continuously investing in research
and development. We may not be able to achieve or subsequently maintain profitability in the near future.
We believe that our future revenue growth will depend on, among other factors, our ability to develop new
technologies, enhance customer experience, establish effective commercialization strategies, effectively
and successfully compete, and develop new products. Accordingly, you should not rely on the revenues of
any prior period as an indication of our future performance. Our costs and expenses may continue to
increase in future periods, as we continue to expand our business and operations and invest in research
and development activities. In addition, we expect to incur substantial costs and expenses as a result of
being a public company. If we are unable to generate adequate revenues and manage our expenses, we
may continue to incur significant losses and may not be able to achieve or subsequently maintain
profitability.
We recorded net cash used in operating activities of RMB116.5 million, RMB157.7 million and
RMB70.4 million in 2022, 2023 and the six months ended June 30, 2024, respectively. See “Financial
Information—Liquidity and Capital Resources—Cash Flows.” We cannot assure you that we will be able
to generate positive cash flows from operating activities in the future. If we continue to record net
operating cash outflows in the future, our working capital may be constrained, which may adversely
affect our financial condition. Our future liquidity primarily depends on our ability to maintain adequate
cash inflows from our operating activities and adequate external financing such as offering and issuing
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securities, and/or other sources such as external debt, which may not be available on terms favorable or
commercially reasonable to us or at all. If we fail to obtain sufficient funding in a timely manner and on
reasonable terms, or at all, we will be in default of our payment obligations and may not be able to expand
our business. As a result, our business, results of operations and financial condition may be adversely
affected.
Failure to obtain or maintain any of the government grants or preferential tax treatments could
adversely affect our business, results of operations, financial condition and prospects.
During the Track Record Period, government grants recognized under other income primarily
represent subsidies granted by local government authorities in connection with our research and
development efforts, business achievements and our production facilities in Qingdao and Rizhao. In
2021, 2022 and 2023 and the six months ended June 30, 2023 and 2024, the government grants we
recognized as other income was RMB11.6 million, RMB30.9 million, RMB33.0 million, RMB15.8
million and RMB16.0 million, respectively. The PRC governmental authorities may decide to reduce or
cancel such government grants or preferential tax treatment, or require us to repay part or all of the
government grants we previously received, which could adversely affect our business, results of
operations and financial condition. As these government grants are provided typically on a one-off basis,
there is no guarantee that we will continue receiving or benefiting from them in the future. In addition, we
may not be able to successfully or timely obtain the government grants or preferential tax treatment that
may become available to us in the future, and such failure could adversely affect our business, results of
operations and financial condition.
We are subject to credit risk related to delay in payment and defaults of customers, distributors or
related parties, which would adversely affect our liquidity and financial condition.
We are exposed to credit risk related to delay in payment and defaults of our customers, distributors
or related parties. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had trade and bills
receivables of RMB16.4 million, RMB40.4 million, RMB41.6 million and RMB33.0 million,
respectively. We may not be able to collect all such trade and bills receivables due to various factors that
are beyond our control, including long payment cycle of public sector customers, adverse operating
condition or financial condition of customers, and distributors’ inability to pay caused by their
customers’ delay in payment. If our customers and/or distributors delay or default in their payments to us,
we may have to make impairment provisions and write-off the relevant receivables, and our liquidity and
financial condition would be adversely affected.
If we are unable to manage our inventory risks efficiently or the proportions and amount of our
write-down of inventories further increase, our financial and results of operations may be adversely
affected.
We had inventories of RMB70.9 million, RMB131.8 million, RMB141.5 million and RMB155.3
million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. In 2021, 2022, 2023 and
the six months ended June 30, 2024, our inventory turnover days were 248, 256, 304 and 395 days,
respectively. In the same years/period, we had write-down of inventories of RMB5.4 million, RMB8.6
million, RMB17.1 million and RMB6.5 million, respectively. According to the CIC Report, the cobot
industry is characterized by evolving technologies, increasing competition, changing industry standards,
and changing market demands, among others. Therefore, our cobot products may quickly become
outdated due to fast-changing trends and constant technological advancements, and any mismanagement
of inventory could lead to increased write-downs directly impacting our profitability, tied-up capital in
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slow-moving inventory reducing our liquidity, and higher storage and handling costs pressuring our
margins, which may adversely and materially affect our business, results of operations and financial
condition.
We have granted, and may continue to grant, share-based awards, which may further increase our
share-based payments expenses, adversely affect our financial performance, and dilute existing
Shareholders’ stake.
We recorded share-based payments expenses of RMB12.6 million, RMB21.5 million and RMB13.7
million in 2022, 2023 and the six months ended June 30, 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 further increase our share-based payments expenses, adversely affect our financial
performance, and dilute existing Shareholders’ stake.
If we fail to perform our contractual obligations, our liquidity and financial positions may be
materially and adversely affected in the future.
Our contract liabilities primarily represent the advance consideration received from our customers
before we transfer the related goods or services. Our contract liabilities were RMB27.1 million,
RMB35.6 million, RMB10.9 million and RMB10.6 million as of December 31, 2021, 2022 and 2023 and
June 30, 2024, respectively. If we fail to fulfill our obligations with respect to our contract liabilities, we
may not be able to convert such contract liabilities into revenue as expected. Furthermore, if we fail to
fulfill our obligations with respect to our contract liabilities, our customers may request not to prepay us
in the future. Any of these circumstances could materially and adversely affect our business, results of
operations, cash flow and liquidity condition.
Our operations may be subject to transfer pricing adjustments by competent authorities.
Our tax position may be subject to review and possible challenge by the relevant government
authorities and any possible change in laws. If our tax position is subject to review and possible challenge
by the relevant government authorities or there is a change in the tax policy and relevant tax laws in the
relevant jurisdictions, it may adversely affect our results of operations and financial position. In
preparing our financial information, our Directors have reviewed and assessed our transfer pricing risk as
it is possible that the tax authorities may challenge our transfer pricing arrangements. There can be no
assurance that we will not be found to be operating in breach of the relevant transfer pricing laws and
regulations, or that such laws will not be modified, which, as a result, may require changes to our transfer
pricing arrangements. Any determination of income reallocations or modifications of the relevant
transfer pricing laws and regulations could result in an income tax assessment and other relevant charges
on the portion of income deemed to be derived from the taxing jurisdiction that so reallocates the income
or modifies its relevant transfer pricing-related laws.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE OPERATE
The economic and social conditions in China could affect our business, results of operations,
financial conditions and prospects.
During the Track Record Period, considerable amount of our revenue was derived from our
businesses in China. Accordingly, our business, financial condition, results of operations and prospects
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are, to a material extent, subject to economic, political and legal developments in China. In particular,
factors such as consumer, corporate and government spending, business investment, level of economic
development, and resource allocation could affect the growth of our business.
The PRC economy has experienced significant growth over the past decades since the
implementation of China’s reform and opening-up policy. In recent years, the PRC government has
implemented measures emphasizing the utilization of market forces in economic reform and the
establishment of sound corporate governance practices in business enterprises. These economic reform
measures may be adaptively adjusted from industry to industry or across different regions of the country.
If the business environment in China changes, our business in China may also be affected.
Any uncertainties embedded in the legal systems of certain jurisdictions where we operate could
adversely affect our business, financial condition and results of operations and our investors could
be affected as a result.
The legal systems of the jurisdictions where we operate vary significantly. Some jurisdictions have
a civil law system based on written statutes and others are largely based on common law. Unlike common
law systems where the case laws have binding effects, prior court decisions under civil law systems may
be cited for reference but have limited precedential value. We are based in China and our business in
China are governed by PRC laws and regulations. The PRC legal system is a civil law system based on
written statutes. As the legal system in China continues to develop, laws and regulations may continue to
evolve and be subject to interpretation. As these laws and regulations are continually evolving in response
to changing economic and other conditions, we cannot foresee how these laws, rules and regulations will
be interpreted and enforced, which may adversely affect the legal protections and remedies that are
available to us and our investors.
Government control of currency conversion and restrictions on the remittance of RMB into and out
of China could limit our ability to utilize our revenues effectively, to pay dividends and other
obligations, and affect the value of our H Shares.
The remittance of currency in and out of China is subject to various laws and regulations.
Considerable amount of our revenues and expenses are denominated in Renminbi, and the net proceeds
from the Global Offering and any dividends we pay on our H Shares will be in Hong Kong dollars. Under
China’s existing foreign exchange regulations, following the completion of the Global Offering, we will
be able to make current account foreign exchange transactions, including paying dividends in foreign
currencies without prior approval from the State Administration of Foreign Exchange (“SAFE”).
Foreign exchange transactions under our capital account are subject to foreign exchange controls
under relevant regulations and require SAFE’s approval. These limitations could affect our ability to
obtain foreign exchange through offshore financing.
Furthermore, the net proceeds from the Global Offering are expected to be deposited in currencies
other than Renminbi until we obtain necessary approvals from relevant PRC regulatory authorities to
convert these proceeds into onshore Renminbi. If we cannot convert the net proceeds into onshore
Renminbi in a timely manner, our ability to deploy these proceeds efficiently may be affected as we will
not be able to invest these proceeds on Renminbi denominated assets onshore or deploy them in uses
onshore where Renminbi is required. All of these factors could affect our business, results of operations,
financial condition and prospects.
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Fluctuations in exchange rates of Renminbi against Hong Kong dollar, U.S. dollar or other foreign
currencies could affect our results of operations and the value of your investment.
Fluctuations in the exchange rate of Renminbi against Hong Kong dollar, U.S. dollar and other
foreign currencies are affected by, among other things, the changes in China’s and international political
and economic conditions. The proceeds from the Global Offering will be denominated in Hong Kong
dollars. As a result, any appreciation of Renminbi against U.S. dollar, Hong Kong dollar or any other
foreign currencies may result in a decrease in the value of our foreign currency-denominated assets and
our proceeds from the Global Offering. Conversely, any depreciation of Renminbi may adversely affect
the value of, and any dividends payable on our H Shares in foreign currencies. We have not utilized, and
may not in the future utilize, any instrument to reduce our foreign currency risk exposure. All of these
factors could affect our business, results of operations, financial condition and prospects, and could affect
the value of, and dividends payable on, our H Shares in foreign currency terms.
We may be subject to the approval or other requirements of the China Securities Regulatory
Commission or other PRC governmental authorities in connection with future security activities.
On July 6, 2021, the General Office of the CPC Central Committee and the General Office of the
State Council jointly promulgated the Opinions on Strictly Combatting Illegal Securities Activities (׵
จԈ ) (the “July 6 Opinion”), which called for the enhanced
administration and supervision of overseas-listed China-based companies, proposed to revise the relevant
regulation governing the overseas issuance and listing of shares by such companies and clarified the
responsibilities of competent domestic industry regulators and government authorities. The July 6
Opinion aims to achieve this by establishing a regulatory system and revising the existing rules for
overseas listings of Chinese entities and affiliates including potential extraterritorial application of
Chinese securities laws.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies (ج)
the “Overseas Listing Trial Measures”) and relevant supporting guidelines, which came into effect on
March 31, 2023. The Overseas Listing Trial Measures comprehensively improve and reform the existing
regulatory regime for overseas offering and listing of PRC domestic companies’ securities and regulate
both direct and indirect overseas offering and listing of PRC domestic companies’ securities. Pursuant to
the Overseas Listing Trial Measures, where a PRC domestic company submits an application for initial
public offering to competent overseas regulators or overseas stock exchanges, such issuer must file with
the CSRC within three business days after such application is submitted. In addition, according to the
Overseas Listing Trial Measures, any future share issuance or listing after this Offering will also be
subject to filing procedures of CSRC and we are also required to report certain material matters to CSRC
after this Offering. Any failure to complete such filing or reporting procedures would subject us to
administrative penalties by CSRC which could harm our reputation and may adversely affect our results
of operations and financial condition.
We cannot guarantee that new rules or regulations promulgated in the future pursuant to the July 6
Opinion and any other related PRC rules and regulations will not impose any additional requirement on
us or otherwise tightening the regulations on us. If it is determined that we are subject to any CSRC
approval, filing, other governmental authorization or requirements for future capital raising activities, we
may fail to obtain such approval or meet such requirements in a timely manner or at all. Such failure may
adversely affect our ability to finance the development of our business and may have a material adverse
effect on our business and financial conditions. Furthermore, any uncertainty and/or negative publicity
regarding such an approval, filing or other requirements may also have a material adverse effect on the
price of our H Shares.
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Investors of our H Shares may become subject to PRC taxation on dividends received from us and
gains from the disposition of our H Shares.
Non-Chinese resident individual holders of H Shares whose names appear on the register of
members of H Shares (“Non-Chinese Resident Individual Holders”), are subject to Chinese individual
income tax on dividends received from us. Pursuant to the Circular on Questions Concerning the
Collection of Individual Income Tax Following the Repeal of Guo Shui Fa [1993] No. 045 (Guo Shui Han
[2011] No. 348) (਷೼೯ [1993]045਷೼Ռ
[2011]348 ໮) dated June 28, 2011 and issued by the State Tax Administration (the “SAT”), the tax rate
applicable to dividends paid to Non-Chinese Resident Individual Holders of H Shares varies from 5% to
20% (usually 10%), depending on whether there is any applicable tax treaty between China and the
jurisdiction in which the Non-Chinese Resident Individual Holder of H Shares resides, as well as the tax
arrangement between China and Hong Kong. Non-Chinese Resident Individual Holders who reside in
jurisdictions that have not entered into tax treaties with the PRC are subject to a 20.0% withholding tax
on dividends received from us. See “Regulatory Overview—Laws and Regulations in Relation to
Taxation.” In addition, under the Individual Income Tax Law of the PRC (ج)
the “Individual Income Tax Law”) and its implementation regulations, Non-Chinese Resident Individual
Holders of H Shares are subject to individual income tax at a rate of 20% on gains realized upon the sale
or other disposition of H Shares. However, pursuant to the Circular Declaring that Individual Income Tax
Continues to be Exempted over Income of Individuals from Transfer of Shares (੻
ٝissued by the Ministry of Finance and the SAT on March 30, 1998,
gains of individuals derived from the transfer of listed shares of enterprises may be exempt from
individual income tax. As of the Latest Practicable Date, none of the aforesaid provisions had expressly
provided that whether individual income tax shall be levied from non-mainland China resident individual
holders on the transfer of shares in mainland China resident enterprises listed on overseas stock
exchanges. To the best of our knowledge, the Chinese tax authorities have not in practice sought to collect
individual income tax on such gains. If such tax is collected in the future, the value of such individual
holders’ investments in H Shares may be materially and adversely affected.
Under the Enterprise Income Tax Law of the PRC (جthe “EIT Law”)
and its implementation regulations, a non-Chinese resident enterprise is generally subject to enterprise
income tax at a rate of 10% with respect to its income sourced from China, including dividends received
from a Chinese company and gains derived from the disposition of equity interests in a Chinese company.
This rate may be reduced under any special arrangement or applicable treaty between the China and the
jurisdiction in which the non-Chinese resident enterprise resides. Pursuant to the Circular on Questions
Concerning Withholding of Enterprise Income Tax for Dividends Distributed by Resident Enterprises in
China to Non-resident Enterprises Holding H-shares of the Enterprises (Guo Shui Han [2008] No. 897)
(͏ΆุΣྤ̮ H਷೼Ռ
[2008]897໮) promulgated by the SAT on November 6, 2008, we intend to withhold tax at 10% from dividends
payable to non-Chinese resident enterprise holders of H Shares (including HKSCC Nominees). Non-Chinese
resident enterprises that are entitled to be taxed at a reduced rate under an applicable income tax treaty or
arrangement will be required to apply to the Chinese tax authorities for a refund of any amount withheld in
excess of the applicable treaty rate, and payment of such refund will be subject to the Chinese tax authorities’
approval. See “Regulatory Overview—Laws and Regulations in Relation to Taxation.” There are uncertainties as
to the interpretation and implementation of the EIT Law and its implementation rules by the Chinese tax
authorities, including whether and how enterprise income tax on gains derived upon the sale or other disposition
of H Shares will be collected from non-Chinese resident enterprise holders of H Shares. If such tax is collected in
the future, the value of such non-Chinese resident enterprise holders’ investments in H Shares may be materially
and adversely affected.
RISK FACTORS
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Payment of dividends is subject to restrictions under PRC law.
Under PRC law, dividends may be paid only out of distributable profits. Distributable profits are
defined as our profits after taxes as determined under PRC GAAP less any recovery of accumulated losses
and appropriations to statutory and other reserves that we are required to make. As a result, we may not
have sufficient, if any, distributable profits to enable us to make dividend distributions to our
Shareholders in the future, including periods for which our financial statements indicate that our
operations have been profitable. Any distributable profits not distributed in a given year are retained and
available for distribution in subsequent years.
Moreover, because the calculation of distributable profits under PRC GAAP is different from the
calculation under IFRSs in certain respects, our subsidiaries may not have distributable profits as
determined under PRC GAAP, even if they have profits for that year as determined under IFRSs, or vice
versa. Accordingly, we may not receive sufficient distributions from our subsidiaries. Failure by our
subsidiaries to pay dividends to us could have a negative impact on our cash flow and our ability to make
dividend distributions to our Shareholders in the future, including those periods in which our financial
statements indicate that our operations have been profitable.
It may be difficult to effect service of process, enforce foreign judgments or bring original actions
against us, our Directors, Supervisors and senior management residing in China.
We are a company incorporated under the laws of China, and a substantial majority of our assets are
located in China. In addition, most of our Directors, Supervisors and senior management reside within
mainland China. As a result, the service of process, investigation, collection of evidence, ratification, and
enforcement procedure inside China should follow the rules set forth in the Civil Procedure Law of the
People’s Republic of China as well as other applicable laws, regulations and interpretations. It would
generally require you to commit more time and economic cost. On July 14, 2006, the Supreme People’s
Court of China and Hong Kong entered into the Arrangement on Reciprocal Recognition and
Enforcement of Judgements in Civil and Commercial Matters by the Courts of the Mainland and of the
Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties
Concerned (τર )
(the “2006 Arrangement”). Pursuant to the 2006 Arrangement, a party with a final judgment rendered by a
Hong Kong 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 China, and vice
versa. However, it is subject to the parties in the dispute agreeing to enter into a choice of court agreement
in writing under the 2006 Arrangement.
On January 18, 2019, the Supreme People’s Court of China and Hong Kong 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 (ಥत
τર ) (the “2019 Arrangement”) and the 2019
Arrangement was issued on January 25, 2024 and became effective on January 29, 2024. The 2019
Arrangement will supersede the 2006 Arrangement and afford greater clarity and certainty for reciprocal
recognition and enforcement of judgments in civil and commercial matters. The 2006 Arrangement will
remain applicable to a “choice of court agreement in writing” entered into before the 2019 Arrangement
taking effect. However, there remains uncertainties as to the outcome of any specific applications to
recognize and enforce such judgments and arbitral awards in China.
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The custodians or authorized users of our controlling non-tangible assets, including chops and
seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.
Under the PRC law, legal documents for corporate transactions, including agreements and contracts
are executed using the chop or seal of the signing entity or with the signature of a legal representative
whose designation is registered and filed with relevant PRC market regulation administrative authorities.
In order to secure the use of our chops and seals, we have established internal control procedures and
rules for using these chops and seals. In any event that the chops and seals are intended to be used, the
responsible personnel will submit a formal application, which will be verified and approved by
authorized employees in accordance with our internal control procedures and rules. In addition, in order
to maintain the physical security of our chops, we generally have them stored in secured locations
accessible only to authorized employees. The procedures, however, may not be sufficient to prevent all
instances of abuse or negligence. There is a risk that our employees could abuse their authority, for
example, by entering into a contract not approved by us or seeking to gain control of one of our
subsidiaries or our affiliated entities or their subsidiaries. If any employee obtains, misuses or
misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we
could experience disruption to our normal business operations. We may have to take corporate or legal
action, which could involve significant time and resources to resolve and divert management from our
operations, and we may not be able to recover our loss due to such misuse or misappropriation if the third
party relies on the apparent authority of such employees and acts in good faith.
RISKS RELATING TO INTERNATIONAL SANCTIONS
We could be adversely affected as a result of any transactions with persons in countries that are, or
become, subject to sanctions administered by the Relevant Sanctions Authorities.
Through executive orders, passing of legislation or other governmental means, the Relevant
Sanctions Authorities, including certain authorities of the U.N., the U.S., the E.U., the U.K., and
Australia, have implemented measures that impose economic sanctions against the Relevant Countries or
targeted industry sectors, groups of companies, persons or organizations from the Relevant Countries.
During the Track Record Period, we sold our products to customers located in Armenia, Azerbaijan,
Bosnia and Herzegovina, Egypt, Iran, Hong Kong, Lebanon, Myanmar/Burma, Romania, Russia
(excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions), Serbia, Tunisia, Turkey,
Ukraine (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) and Venezuela. These
Relevant Countries are subject to certain forms of International Sanctions programs administered by the
Relevant Sanctions Authorities. In particular, Iran was subject to comprehensive sanctions during the
Track Record Period, and since February 2022, Russia has been subject to expanding sanctions scope by
the Relevant Sanctions Authorities. We recorded revenue from Russia (excluding Crimea, Luhansk,
Donetsk, Zaporizhzhia and Kherson regions) of RMB11.3 million, RMB23.5 million, RMB15.0 million,
RMB4.8 million and RMB10.6 million in 2021, 2022, 2023 and the six months ended June 30, 2023 and
2024, respectively. See “Business—Relevant Activities in Respect of the Relevant Countries with
International Sanctions Exposure” for details of Relevant Activities relating to the Relevant Countries.
During the Track Record Period, some of our cobots sold to Russia (excluding Crimea, Luhansk,
Donetsk, Zaporizhzhia and Kherson regions) were under certain custom codes (the “Relevant Custom
Codes”), such codes stand for (1) industrial robots, (2) parts of machines and mechanical appliances
having individual functions, (3) machines for additive manufacturing by rubber or plastic deposit, and (4)
parts of machines for additive manufacturing. As advised by our International Sanctions Legal Advisor,
RISK FACTORS
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such cobots falling under the Relevant Custom Codes were prohibited from being exported to Russia
under sanctions laws and regulations of the E.U. and the U.K. On the other hand, as advised by our
International Sanctions Legal Advisor, our cobots that do not fall under the Relevant Custom Codes are
not subject to such sanctions laws and regulations. During the Track Record Period, our sales to Russia
(excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) mostly consisted of Magician
Series cobots and relevant accessories that do not fall under the Relevant Custom Codes. In 2021, 2022,
2023 and the six months ended June 30, 2024, our revenue derived from the sales of cobots to Russia
(excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) which falls under the Relevant
Custom Codes, such as our CR series ( industrial robots ), MG400 ( industrial robots ), integrated cobots
for printing ( machines for additive manufacturing by rubber or plastic deposit ), and the accessories
(parts of machines and mechanical appliances having individual functions ; parts of machines for
additive manufacturing ), was nil, RMB2.2 million, RMB1.6 million and RMB3.1 million, respectively,
accounting for nil, 0.9%, 0.5% and 2.6% of our total revenue in the same periods, respectively. During the
Track Record Period and up to the Latest Practicable Date, no cobots or products were sold to Crimea,
Luhansk, Donetsk, Zaporizhzhia and Kherson regions, and since June 2024, our Group has ceased sales
of all cobots to Russia falling under the Relevant Custom Codes. We have been advised by our
International Sanctions Legal Advisor that the potential breaches could be corrected by taking the
position that from now on, our Group will no longer make sales of cobots in Russia under the Relevant
Custom Codes that would breach the sanctions laws and regulations of the Relevant Jurisdictions. Since
our Group has no relevant “nexus” with the E.U. and the U.K., for the sales of cobots to Russia falling
under the Relevant Custom Codes by the relevant Group company, we have been advised by our
International Sanctions Legal Advisor that (1) it is unlikely that such Group company will be fined or
such fine could be enforced against such Group company; and (2) in the unlikely event that such Group
company is fined, and considering as a first offender of such sanctions, it is expected that such penalty
should not exceed RMB1.8 million.
Sanctions laws and regulations are constantly evolving, and new targeted industry sectors, groups of
companies, persons or organizations are regularly added to the list of Sanctioned Targets administered by
the Relevant Sanctions Authorities. Further, new laws or restrictions could increase the obstacles for us to
conduct our business internationally, and some or all of our products may be deemed subject to sanctions
restrictions in the future.
Furthermore, if we fail to keep ourselves updated with the latest developments of the International
Sanctions or other laws and regulations, we may be involved in sanctions risk exposures. If the Relevant
Sanctions Authorities or other relevant authorities of the Relevant Jurisdictions or other jurisdiction
determine that any of our future activities as a violation of the sanctions imposed by these authorities or
designate our Group, any of our Directors and/or substantial shareholders as a sanctioned company,
person or organization, our business and reputation will be materially and adversely affected.
In addition, any association with customers, suppliers and service providers in countries that are
subject to any form of sanctions programs could subject us to reputational harm, which may lead to the
loss of customers, suppliers or service providers, and in turn adversely affect our business, results of
operations and financial condition.
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Export control or trade restrictions may impact our business, results of operations and financial
conditions.
In recent years, the Relevant Sanctions Authorities, in particular the U.S. government, have imposed
targeted export control and trade restrictions on China and Russia and a number of their companies and
institutions, including them in the list of Sanctioned Targets, which limits our ability to sell, procure and
conduct other business activities with them. Any additional target and programs of International
Sanctions or other laws and regulations regarding export controls could have an unpredictable effect on
our business.
We generally procure raw materials, parts, components and equipment used in our manufacturing
from domestic suppliers located in China, although these raw materials, parts, components, equipment
may include certain U.S. origin raw materials, parts, components and equipment. Since June 2024, we
require all of our suppliers to certify their compliance with U.S. export control regulations with respect to
any U.S.-origin products, raw materials, parts, components or equipment supplied to us as part of our
export control compliance measures. Furthermore, during the Track Record Period, we did not import any
products, raw materials, parts, components or equipment directly from the U.S. and E.U. into China that
were material to our business operation. During the Track Record Period, we did not sell our products to
or procure raw materials, parts, components and equipment from companies on the list of Sanctioned
Targets administered by the Relevant Sanctions Authorities. However, International Sanctions for export
controls and trade laws, policies and regulations are complex and constantly evolving, and we cannot
guarantee all time compliance with such laws, policies and regulations. Failure to do so may result in
material and adverse effect on our business.
In addition, the interpretation and enforcement of the relevant International Sanctions laws and
regulations involve substantial uncertainties, which may be driven by geo-politics, geo-economy,
national interests and/or other factors at the relevant time that are well beyond our control. Any potential
International Sanctions related restrictions, inquiries or investigations, government actions or other
proceedings may be difficult or costly to comply with and may, among other things, disrupt or delay the
development of our technologies, manufacturing of our products, and materially affect our business
operations. These actions could result in negative publicity, require significant time and attention of our
Directors and senior management and may subject us to fines, penalties or orders. If any of these occur,
we may be required to cease or adapt part or all of our existing business activities, which may have a
material and adverse effect on our business, results of operations and financial condition.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares, and the liquidity and market price of our
H Shares may be volatile.
Prior to the Global Offering, there has been no public market for our H Shares. The Offer Price range
for our H Shares was the result of negotiations between us, the Overall Coordinators and the Joint Global
Coordinators on behalf of the Underwriters, and the Offer Price may differ significantly from the market
price for our H Shares following the Global Offering. We have applied for listing of, and permission to
deal in, our H Shares on the Stock Exchange. A listing on the Stock Exchange, however, does not
guarantee that an active and liquid trading market for our H Shares will develop, or if it does develop, that
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it will be sustained following the Global Offering or that the market price of our H Shares will not decline
following the Global Offering. Furthermore, the market price and trading volume of our H Shares may be
volatile. The following factors may affect the trading volume and market price of our H Shares:
• actual or anticipated fluctuations in our operating performance and revenue;
• our failure to execute our strategies;
• an unexpected business interruption resulting from operational breakdowns, natural disasters,
or major changes in our key personnel or senior management;
• adverse market reaction to any indebtedness that we may incur or securities that we may issue
in the future;
• announcements of competitive developments, acquisitions or strategic alliances in our
industry;
• potential litigation or regulatory investigations;
• general market conditions or other developments affecting us or our industry;
• changes or proposed changes in laws or regulations, or differing interpretations thereof,
affecting our ability to obtain or maintain regulatory approval for our products;
• inadequate protection of our intellectual property rights or legal proceedings brought against
us for infringement of third parties’ intellectual property rights;
• the operating and stock price performance of other companies in our industry, and other events
or factors beyond our control; and
• the release of lock-up or other transfer restrictions on our outstanding H Shares or sales or
perceived sales of H Shares by us or other Shareholders.
Moreover, the capital market has from time to time experienced significant price and trading volume
fluctuations that were unrelated or not directly related to the operating performance of the underlying
companies in the market. These broad market and industry fluctuations may have a material and adverse
effect on the market price and trading volume of our H Shares.
An active and liquid trading market for our H Shares may not develop.
Prior to the Global Offering, our H Shares were not traded on any other market. We cannot assure
you that an active and liquid trading market for our H Shares will be developed or be maintained after the
Global Offering. Liquid and active trading markets usually result in less price volatility and more
efficiency in carrying out investors’ purchase and sale orders. The market price of our H Shares could
vary significantly as a result of a number of factors, some of which are beyond our control. In the event of
a drop in the market price of our H Shares, you could lose a substantial part or all of your investment in
our H Shares.
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Because the Offer Price of our H Shares is substantially higher than the consolidated net tangible
book value per share, purchasers in the Global Offering may experience immediate dilution.
As the Offer Price of our H Shares is higher than the consolidated net tangible assets per share
immediately prior to the Global Offering, purchasers of our H Shares in the Global Offering will
experience an immediate dilution in pro forma adjusted consolidated net tangible assets. Our existing
Shareholders will receive an increase in the pro forma adjusted consolidated net tangible asset value per
share of their shares. See Appendix II to this prospectus for details. In addition, holders of our Shares may
experience further dilution of their interest if the Underwriters exercise the Over-allotment Option or if
we issue additional shares in the future to raise additional capital.
We have significant discretion as to how we will use the net proceeds of the Global Offering, and you
may not necessarily agree with how we use them.
Our management may spend the net proceeds from the Global Offering in ways you may not agree
with or that do not yield a favorable return. See “Future Plans and Use of Proceeds” for details of our
intended use of proceeds. However, our management will have discretion as to the actual application of
our net proceeds. You are entrusting your funds to our management, upon whose judgment you must
depend, for the specific use we will make of the net proceeds from this Global Offering.
Future sales or perceived sales or conversion of substantial amounts of our securities in the public
market, such as conversion of our Domestic Shares into H Shares, could have a material and
adverse effect on the prevailing market price of our H Shares and our ability to raise additional
capital in the future, or may result in dilution of your shareholdings.
Future sales of substantial amounts of our H Shares or other securities relating to our H Shares in the
public market, or the issuance of new H Shares or other securities relating to our H Shares, or the
perception that such sales or issuances may occur could all cause a decline in the market price of our H
Shares. Future sales, or perceived sales, of substantial amounts of our securities or other securities
relating to our H Shares, including part of any future offerings, could also materially and adversely affect
the prevailing market price of our H Shares and our ability to raise capital in the future at a time and at a
price which we deem appropriate.
Although our existing shareholders are subject to restrictions on their sales of H Shares within 12
months from the Listing Date as described in “History and Corporate Structure,” future sales of a
significant number of our H Shares by our Controlling Shareholders or other existing shareholders in the
public market after the Global Offering, or the perception that these sales could occur, could cause the
market price of our H Shares to decline and could materially impair our future ability to raise capital
through offerings of our H Shares. We cannot assure you that our Controlling Shareholders, or other
existing shareholders will not dispose of H Shares held by them or that we will not issue H Shares upon
the expiration of restrictions set out above.
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We may not be able to pay any dividends on our H Shares.
We have never paid any dividends since our inception. We cannot guarantee when and in what form
dividends will be paid on our H Shares following the Global Offering. The declaration of dividends is
proposed by the Board and is based on, and limited by, various factors, including without limitation, our
business and financial performance, capital and regulatory requirements, and general business
conditions. We may not have sufficient or any profits to enable us to make dividend distributions to our
Shareholders in the future, even if our financial statements indicate that our operations have been
profitable. See “Financial Information—Dividends” for details.
If securities or industry analysts do not publish research reports about us, or if they adversely
change their recommendations regarding our H Shares, the market price and trading volume of our
H Shares may decline.
The trading market of our H Shares may be influenced by research reports that industry or securities
analysts publish about us or our business. If one or more analysts who cover us downgrade our H Shares
or publish negative opinions about us, the market price of our H Shares would likely decline regardless of
the accuracy of the information. If one or more of these analysts cease coverage of us or fail to regularly
publish reports on us, we could lose visibility in the financial markets, which, in turn, could cause the
market price or trading volume of our H Shares to decline.
Forward-looking statements contained in this prospectus are subject to risks and uncertainties.
This prospectus contains forward-looking statements with respect to our business strategies,
operating efficiencies, competitive positions, growth opportunities for existing operations, plans and
objectives of management, certain pro forma information and other matters.
The words “anticipate,” “believe,” “could,” “potential,” “continue,” “expect,” “intend,” “may,”
“plan,” “seek,” “will,” “would,” “should” and the negative of these terms and other similar expressions
identify a number of these forward-looking statements. These forward-looking statements, including,
among others, those relating to our future business prospects, capital expenditure, cash flows, working
capital, liquidity and capital resources are necessary estimates reflecting the best judgment of our
Directors, Supervisors and senior management and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the forward-looking statements. As a
result, these forward-looking statements should be considered in light of various important factors,
including those set out in “Risk Factors” in this prospectus. Accordingly, such statements are not a
guarantee of future performance, and 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.
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The industry data and forecasts in this prospectus obtained from various government publications
have not been independently verified.
This prospectus includes industry data and forecasts extracted from the report prepared by CIC,
which was commissioned by us, and from various official governmental publications and other publicly
available publications. We have no reason to believe that such information is false or misleading or that
any fact has been omitted that would render such information false or misleading. However, we cannot
assure you of the accuracy or completeness of information obtained from these sources. We have not
independently verified any of the data, forecasts and other statistics from such sources, nor have we
ascertained that the underlying economic assumptions relied upon in those sources. The information from
official government sources has not been independently verified by us or any other parties involved in the
Global Offering, or any of our or their respective directors, senior management, representatives, advisers
or any other persons involved in the Global Offering and no representation is given as to its accuracy.
Moreover, such facts, forecasts and other statistics may not be prepared on the same basis or with the
same degree of accuracy (as the case may be) in other publications or jurisdictions. For these reasons, the
information from various government publications contained in this prospectus may not be accurate and
should not be given undue reliance as a basis for making your investment in our H Shares.
We may need additional capital, and the sale and issue of additional H Shares or other equity
securities could result in additional dilution to our Shareholders.
Notwithstanding our current cash and cash equivalents and the net proceeds from the Global
Offering, we may require additional cash resources to finance our continued growth or other future
developments. We cannot assure you that financing will be available in the amounts or on terms
acceptable to us, if at all. If we fail to raise additional funds, we may need to sell and issue additional
equity securities, which could result in additional dilution to our Shareholders.
Y ou should read the entire prospectus carefully and we strongly caution you not to place any
reliance on any information contained in press articles and other media regarding us and the Global
Offering.
Prior to the publication of this prospectus, there has been and there may also be, subsequent to the
date of this prospectus but prior to the completion of the Global Offering, press and media coverage
regarding us, our business, our industries and the Global Offering, which contained, among other things,
certain financial information, projections, valuations and other forward-looking information about us and
the Global Offering. We have not authorized the disclosure of any such information in the press or media
and do not accept responsibility for the accuracy or completeness of such press articles or other media
coverage. We make no representation as to the appropriateness, accuracy, completeness or reliability of
any of such projections, valuations or other forward-looking information about us. To the extent such
statements are inconsistent with, or conflict with, the information contained in this prospectus, we
disclaim responsibility for them. Accordingly, prospective investors are cautioned to make their
investment decisions on the basis of the information contained in this prospectus only and should not rely
on any other information.
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In preparation for the Global Offering, we have applied to the Stock Exchange for the following
waivers from strict compliance with the relevant provisions of the Listing Rules.
MANAGEMENT PRESENCE IN HONG KONG
According to Rule 8.12 of the Listing Rules, all applicants applying for a primary listing on the
Stock Exchange must have sufficient management presence in Hong Kong. This would normally mean
that at least two of the applicant’s executive directors must be ordinarily resident in Hong Kong.
Our Company’s business operations and assets are primarily located outside Hong Kong. Our
Company’s executive Directors are based in the PRC as our Board believes it is more effective and
efficient for our executive Directors to be based in a location where our substantial operations are located.
Our Company therefore does not, and in the near future will not, maintain management presence in Hong
Kong.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock Exchange
for, and the Stock Exchange has granted us, a waiver from strict compliance with the requirements under
Rule 8.12 of the Listing Rules, provided that our Company implements the following arrangements:
(1) We have appointed Mr. Lang Xulin (؍Mr. Lang”), our executive Director, and Ms.
Ching Shuk Wah Shirley ( ೻ૺശ ) (“Ms. Ching”), our joint company secretary as our
authorized representatives for the purpose of Rule 3.05 of the Listing Rules. They will serve as
the principal channel of communication with the Stock Exchange and make themselves readily
available to communicate with the Stock Exchange. Each of Mr. Lang and Ms. Ching can be
readily contactable by phone and email to deal promptly with enquiries from the Stock
Exchange, and will also be available to meet with the Stock Exchange to discuss any matters
within a reasonable period of time upon the request of the Stock Exchange. The contact details
of our authorized representatives have been provided to the Stock Exchange.
(2) All Directors who are not ordinarily resident in Hong Kong possess or can apply for valid
travel documents to visit Hong Kong and can meet with the Stock Exchange within a
reasonable period. In addition, each Director has provided his/her contact details, including
phone numbers and email addresses, to our authorized representatives and to the Stock
Exchange. In the event that a Director expects to be traveling or otherwise be out of office,
he/she will provide the phone number of the place of his/her accommodation or other contact
information to our authorized representatives to ensure that each of our authorized
representatives will be able to contact all our Directors promptly at all times if and when the
Stock Exchange wishes to contact our Directors.
W AIVERS FROM STRICT COMPLIANCE WITH
THE REQUIREMENTS UNDER THE LISTING RULES
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(3) We have appointed Guotai Junan Capital Limited as our compliance advisor in accordance with
Rule 3A.19 of the Listing Rules, which will serve as an additional and alternative channel of
communication with the Stock Exchange in addition to our authorized representatives. The
compliance advisor will have reasonable access, at all times during the term of their
appointment, to our authorized representatives, Directors and other officers of our Company,
participate in the communication between the Stock Exchange and our Company and answer
inquiries from the Stock Exchange.
(4) Any meeting between the Stock Exchange and our Directors will be arranged through our
authorized representatives or our compliance advisor or directly with our Directors within a
reasonable time frame. We will inform the Stock Exchange promptly in respect of any changes
in our authorized representatives and our compliance advisor.
(5) We intend to retain our Hong Kong legal advisors on on-going compliance requirements, any
amendment or supplement to and other issues arising under the Listing Rules and other
applicable laws and regulations in Hong Kong after the Listing.
JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary who
possesses the necessary academic or professional qualifications or relevant experience, and is therefore
capable to discharge the functions of the company secretary. Note 1 to Rule 3.28 of the Listing Rules
provides that the Stock Exchange considers the following academic or professional qualifications to be
acceptable:
(1) a member of The Hong Kong Chartered Governance Institute;
(2) a solicitor or a barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the
Laws of Hong Kong); and
(3) a certified public accountant as defined in the Professional Accountants Ordinance (Chapter 50
of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further sets out the factors that the Stock Exchange will
consider in assessing an individual’s “relevant experience”:
(1) length of employment with the issuer and other issuers and the roles he/she has undertaken;
(2) familiarity with the Listing Rules and other relevant laws and regulations including the SFO,
the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the Takeovers Code;
(3) relevant training taken and/or to be taken in addition to the minimum requirement under Rule
3.29 of the Listing Rules; and
(4) professional qualifications in other jurisdictions.
W AIVERS FROM STRICT COMPLIANCE WITH
THE REQUIREMENTS UNDER THE LISTING RULES
–6 3–


--- page 73 ---
Our Company has appointed Mr. Wang Yong (ۇMr. Wang”) as one of our joint company
secretaries. Mr. Wang joined our Group in 2022 and possesses relevant understanding and knowledge
relating to the business operations and corporate culture of our Group. In his capacity as the executive
Director, chief financial officer and Board secretary, Mr. Wang has actively participated in the
preparation of the application for the Listing and possesses experience in matters relating to our Board
and corporate governance of our Company. Having considered Mr. Wang’s expertise and backgrounds,
our Directors consider that Mr. Wang is capable of discharging the functions of a company secretary and
is suitable to perform such role.
As Mr. Wang currently does not possess the qualifications under Rule 3.28 of the Listing Rules, and
may not be able to fulfill the requirements of the Listing Rules on his own, we have appointed Ms. Ching,
a Chartered Secretary, a Chartered Governance Professional and a member of both The Hong Kong
Chartered Governance Institute and The Chartered Governance Institute in the United Kingdom, who is
qualified under Rule 3.28 of the Listing Rules to act as the other company secretary and to work closely
with and provide assistance to Mr. Wang for an initial period of three years commencing from the Listing
Date.
The following arrangements have been, or will be, put in place to assist Mr. Wang in acquiring the
qualifications and experience as the joint company secretaries of our Company required under Rules 3.28
and 8.17 of the Listing Rules:
(1) In the course of the preparation of the application for the Listing, Mr. Wang has been provided
with a memorandum and has attended a training seminar on the respective obligations of our
Directors and senior management and our Company under the relevant Hong Kong laws and
the Listing Rules provided by our Hong Kong legal advisors.
(2) In addition to the minimum training requirements under Rule 3.29 of the Listing Rules, our
Company will ensure that Mr. Wang continues to have access to relevant training and support
to familiarize himself with the Listing Rules and the duties of a company secretary of an issuer
listed on the Stock Exchange, and to receive updates on the latest changes to the applicable
Hong Kong laws, regulations and the Listing Rules. Furthermore, our Company will ensure
that Mr. Wang and Ms. Ching will seek and have access to the advice from our Hong Kong legal
advisors and other professional advisors as and when required.
(3) Ms. Ching will assist Mr. Wang to acquire the “relevant experience” as required under Note 2
to Rule 3.28 of the Listing Rules and to discharge their duties as company secretaries. Mr.
Wang will be assisted by Ms. Ching for an initial period of three years commencing from the
Listing Date. As part of the arrangement, Ms. Ching will act as one of the joint company
secretaries and communicate regularly with Mr. Wang on matters relating to corporate
governance, the Listing Rules as well as other laws and regulations which are relevant to our
Company. She will also assist Mr. Wang in organizing Board meetings and Shareholders’
meetings as well as other matters of our Company which are incidental to the duties of a
company secretary.
(4) Our Company has appointed the compliance advisor pursuant to Rule 3A.19 of the Listing
Rules, which will act as our additional channel of communication with the Stock Exchange and
provide professional guidance and advice to us and our joint company secretaries as to
compliance with the Listing Rules and all other applicable laws and regulations.
W AIVERS FROM STRICT COMPLIANCE WITH
THE REQUIREMENTS UNDER THE LISTING RULES
–6 4–


--- page 74 ---
We have applied to the Stock Exchange for, and the Stock Exchange has granted us, a waiver from
strict compliance with the requirements of Rules 3.28 and 8.17 of the Listing Rules. Such waiver will be
revoked immediately if and when Ms. Ching ceases to provide such assistance or ceases to meet the
requirements under Rule 3.28 of the Listing Rules, or if there are material breaches of the Listing Rules
by our Company during the three-year period from the Listing Date. We will liaise with the Stock
Exchange before the end of the three-year period to enable it to assess whether Mr. Wang, having had the
benefit of Ms. Ching’s assistance for three years, will have acquired the relevant experience within the
meaning of Rule 3.28 of the Listing Rules so that a further waiver will not be necessary.
See “Directors, Supervisors and Senior Management” for the biographical details of Mr. Wang and
Ms. Ching.
W AIVERS FROM STRICT COMPLIANCE WITH
THE REQUIREMENTS UNDER THE LISTING RULES
–6 5–


--- page 75 ---
DIRECTORS’ RESPONSIBILITY STATEMENT
This prospectus, for which our Directors collectively and individually accept full responsibility,
includes particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the
Laws of Hong Kong) and the Listing Rules for the purpose of giving information with regard to us. 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 any statement
herein or this prospectus misleading.
FILING PROCEDURES WITH THE CSRC
We filed with the CSRC for the application to list our H Shares on the Stock Exchange and the
Global Offering on June 28, 2024. The CSRC subsequently confirmed our completion of filing
application procedures on November 21, 2024. In completing such filing, the CSRC accepts no
responsibility for our financial soundness, nor for the accuracy of any of the statements made or opinions
expressed in this prospectus. No other filings are required to be completed before the listing of the H
Shares on the Stock Exchange.
UNDERWRITING AND INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering. For
applications under the Hong Kong Public Offering, this prospectus contains the terms and conditions of
the Hong Kong Public Offering.
The listing of our H Shares on the Stock Exchange is sponsored by the Joint Sponsors and the Global
Offering is managed by the Overall Coordinators. Pursuant to the Hong Kong Underwriting Agreement,
the Hong Kong Public Offering is underwritten by the Hong Kong Underwriters on a conditional basis,
with one of the conditions being that the Offer Price is agreed between the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and us. The International Offering is managed
by the Overall Coordinators. The International Underwriting Agreement is expected to be entered into on
or about the Price Determination Date, subject to determination of the pricing of the H Shares and
agreement on the Offer Price between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and us. For details of the Underwriters and the underwriting arrangements, please refer to
the section headed “Underwriting” in this prospectus.
The H Shares are offered solely on the basis of the information contained and representations made
in this prospectus and on the terms and subject to the conditions set out herein and therein. No person is
authorised to give any information in connection with the Global Offering or to make any representation
not contained in this prospectus, and any information or representation not contained herein must not be
relied upon as having been authorised by our Company, the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediaries, any of their respective directors, agents, employees or advisors or any other party
involved in the Global Offering.
Neither the delivery of this prospectus nor any subscription or acquisition made under it shall, under
any circumstances, create any implication that there has been no change in our affairs since the date of
this prospectus or that the information in this prospectus is correct as at any subsequent time.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–6 6–


--- page 76 ---
For details of the structure of the Global Offering, including its conditions, please refer to the
section headed “Structure and Conditions of the Global Offering” in this prospectus. For the procedures
for applying for our H Shares, please refer to the section headed “How to Apply for Hong Kong Offer
Shares” in this prospectus. For details of the arrangements relating to the Over-allotment Option and
stabilization, please refer to the section headed “Structure and Conditions of the Global Offering” in this
prospectus.
DETERMINATION OF THE OFFER PRICE
The H Shares are being offered at the Offer Price which will be determined by the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us on or before Thursday, December
19, 2024 or such later date as may be agreed upon between the Overall Coordinators (for themselves and
on behalf of the Underwriters) and us, and in any event no later than 12:00 noon on Thursday, December
19, 2024. If the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company are unable to reach an agreement on the Offer Price on such date, the Global Offering will not
proceed.
INFORMATION ABOUT THIS PROSPECTUS
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 made in this prospectus must not be
relied on by you as having been authorized by us, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Sponsors, 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. Neither the delivery of this prospectus nor any offering, sale or delivery
made in connection with the H Shares should, under any circumstances, constitute a representation that
there has been no change or development reasonably likely to involve a change in our affairs since the
date of this prospectus or imply that the information contained in this prospectus is correct as of any date
subsequent to the date of this prospectus.
This prospectus is published solely in connection with the Hong Kong Public Offering, which forms
part of the Global Offering. For applicants under the Hong Kong Public Offering, this prospectus set out
the terms and conditions of the Hong Kong Public Offering.
RESTRICTIONS ON OFFERS AND SALES OF THE H SHARES
Each person acquiring the H Shares under the Hong Kong Public Offering will be required to, or be
deemed by his acquisition of the H Shares to, confirm that he is aware of the restrictions on offers of the
H Shares described in this prospectus.
No action has been taken to permit a public offering of the H Shares or the general distribution of
this prospectus in any jurisdiction other than in Hong Kong. Accordingly, this prospectus may not be used
for the purposes 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 applicable securities laws of such jurisdictions and pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–6 7–


--- page 77 ---
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the H Shares
in issue and 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 Conversion of Domestic Sharers into H
Shares, on the basis that, among other things, we satisfy the requirement under Rule 18C.03 of the Listing
Rules as a Commercial Company (as defined in the Listing Rules) with reference to our expected market
capitalization at the time of Listing, which, based on the Offer Price, exceeds HK$6 billion.
Under section 44B(l) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, if
the permission for the H Shares to be listed on the Stock Exchange pursuant to this prospectus has been
refused before the expiration of three weeks from the date of the closing of the Global Offering or such
longer period not exceeding six weeks as may, within the said three weeks, be notified to us by or on
behalf of the Stock Exchange, then any allotment made on an application in pursuance of this prospectus
shall, whenever made, be void.
All the Offer Shares will be registered on our H Share register of members in order to enable them
to be traded on the Stock Exchange. None of our share or loan capital is listed or dealt in on any other
stock exchange and no such listing or permission to list is being or is expected to be sought in the near
future.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares (including any H
Shares which may be issued pursuant to the exercise of the Over-allotment Option) on the Stock
Exchange and compliance with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the Listing Date or on any other date as determined by HKSCC. Settlement of transactions between
participants of the Stock Exchange is required to take place in CCASS on the second settlement day after
any trading day. All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made for the H Shares to be admitted into CCASS. Investors
should seek the advice of their stockbroker or other professional advisor for details of those settlement
arrangements and how such arrangements will affect their rights and interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed “How to
Apply for Hong Kong Offer Shares.”
H SHARE REGISTER AND STAMP DUTY
Our principal register of members will be maintained in the PRC and our H Share register of
members will be maintained by our H Share Registrar, Computershare Hong Kong Investor Services
Limited in Hong Kong.
All Offer Shares will be registered on our H Share register of members. Dealings in the H Shares
registered on our H Share register of members will be subject to Hong Kong stamp duty.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–6 8–


--- page 78 ---
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
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 such term is defined
in the Listing Rules) of any of our Directors or any existing Shareholders or a nominee of any of the
foregoing.
PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your professional advisors if you are in any doubt as to the taxation implications
of subscribing for, purchasing, holding or disposing of, or dealing in, the H Shares or exercising any
rights attaching to the H Shares. We emphasize that none of our Company, the Joint Sponsors, 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 respective directors, officers or
representatives or any other person involved in the Global Offering accepts responsibility for any tax
effects or liabilities resulting from your subscription, purchase, holding or disposing of, or dealing in, the
H Shares or your exercise of any rights attaching to the H Shares.
EXCHANGE RATE CONVERSION
Unless otherwise specified, this prospectus contains certain translations for the convenience
purposes at the following rates:
HK$1.00:RMB0.92526
US$1.00:RMB7.19960
No estimation is made that any amounts in HK$, RMB and US$ can be or could have been converted
at the relevant dates at the above rates or any other rates at all.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this prospectus,
this prospectus shall prevail unless otherwise stated. However, the translated English names of the PRC
and foreign national, entities, departments, facilities, certificates, titles, laws, regulations (including
certain of our subsidiaries) and the like included in this prospectus are translations of their Chinese
names and are included for identification purpose only. If there is any inconsistency, the names in their
original languages shall prevail.
The English names of companies incorporated in the PRC are translations from their Chinese names
and included for identification purpose only.
COMMENCEMENT OF DEALING IN THE H SHARES
Dealings in the H Shares on the Stock Exchange are expected to commence at 9:00 a.m. on Monday,
December 23, 2024.
OTHER
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
–6 9–


--- page 79 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Liu Peichao ( ᄎ੃൴) 11B, Block G
Baoneng City East
Shenzhen
PRC
Chinese
Mr. Wang Yong (ۇ12D, Unit 1, Block C, Xiangge Mingyuan
Mianshan Road
Nanshan District
Shenzhen
PRC
Chinese
Mr. Lang Xulin (؍Room 16B, Unit 1, Block 1
Jindimeilong Town Garden
Longhua District
Shenzhen
PRC
Chinese
Non-executive Director
Mr. Jing Liang (ڥ42/F, 2012 Shennan Avenue
Futian District
Shenzhen
PRC
Chinese
Independent non-executive Directors
Mr. Li Yibin ( ҽ൪ⅳ) 1-1011, Building 3, Dongcun
44 Wenhua West Road
Lixia District
Jinan
PRC
Chinese
Mr. Ng Jack Ho Wan
(юखථ)
Flat A, 16/F, Tower 3A, Seanorama
1 Choi Sha Street
Ma On Shan
New Territories
Hong Kong
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–7 0–


--- page 80 ---
Name Address Nationality
Dr. Hou Lingling (ޛޛڨ9/F, Building 3, Group 7, Phase 2
Xinghai Mingcheng, Qianhai Road
Nanshan District
Shenzhen
PRC
Chinese
SUPERVISORS
Name Address Nationality
Ms. Wan Ying ( ຬ጑) 2-2-207, Longweihaoting, Buji Street
Longgang District
Shenzhen
PRC
Chinese
Mr. Li Liuwei ( ҽᄎਃ) 14D, Building 89
Taoyuan Village, Longzhu Avenue
Nanshan District
Shenzhen
PRC
Chinese
Ms. Ma Jingxian ( ৵᎑ᄫ) Building 25E
16 Lianhuachi East Road
Xicheng District
Beijing
PRC
Chinese
For the biographies and other relevant information of our Directors and Supervisors, see “Directors,
Supervisors and Senior Management.”
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors Guotai Junan Capital Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–7 1–


--- page 81 ---
Joint Sponsor-OCs Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Overall Coordinators Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Joint Global Coordinators Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Joint Bookrunners Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–7 2–


--- page 82 ---
China PA Securities (Hong Kong)
Company Limited
Units 3601, 07 & 11-13, 36/F
The Center
99 Queen's Road Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6
Three Pacific Place
1 Queen’s Road East
Hong Kong
TradeGo Markets Limited
Room 3405
West Tower Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Joint Lead Managers and Capital
Market Intermediaries
Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
China PA Securities (Hong Kong)
Company Limited
Units 3601, 07 & 11-13, 36/F
The Center
99 Queen's Road Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6
Three Pacific Place
1 Queen’s Road East
Hong Kong
TradeGo Markets Limited
Room 3405
West Tower Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 83 ---
Legal Advisors to the Company As to Hong Kong and U.S. laws:
Wilson Sonsini Goodrich & Rosati
Suite 1509, 15/F, Jardine House
1 Connaught Place
Central
Hong Kong
As to PRC law:
AllBright Law Offices (Shenzhen)
21, 22, 23/F, Tower 1, Excellence Century Center
FuHua 3 Road
Futian District, Shenzhen
PRC
As to International Sanctions laws:
Holman Fenwick Willan LLP
8 Bishopsgate
London EC2N 4BQ
United Kingdom
Legal Advisors to the Joint Sponsors
and the Underwriters
As to Hong Kong law:
King & Wood Mallesons
13/F, Gloucester Tower, The Landmark
15 Queen’s Road Central
Central
Hong Kong
As to PRC law:
JunZeJun Law Offices
28&29 Floor, Landmark
No. 4028 Jintian Road
Futian District, Shenzhen
PRC
Auditors and Reporting Accountants Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditors
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Independent Industry Consultant China Insights Industry Consultancy Limited
10F, Block B, Jing’an International Center
88 Puji Road
Jing’an District
Shanghai
PRC
Receiving Bank Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–7 4–


--- page 84 ---
Registered Office in the PRC Room 1003, Building 2
Chongwen Park, Nanshan Smart Park
No. 3370 Liuxian Avenue
Fuguang Community, Taoyuan Sub-district
Nanshan District
Shenzhen
PRC
Headquarters and Principal Place of
Business in the PRC
Room 1003, Building 2
Chongwen Park, Nanshan Smart Park
No. 3370 Liuxian Avenue
Fuguang Community, Taoyuan Sub-district
Nanshan District
Shenzhen
PRC
Principal Place of Business in
Hong Kong
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wan Chai
Hong Kong
Company Websites www.dobot.cn (with respect to Chinese version)
www.dobot-robots.com (with respect to English version)
(Information contained on these websites does not
form part of this prospectus)
Joint Company Secretaries Mr . Wang Y ong (ۇ)
12D, Unit 1, Block C, Xiangge Mingyuan
Mianshan Road
Nanshan District
Shenzhen
PRC
Ms. Ching Shuk Wah Shirley ( ೻ૺശ )
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wan Chai
Hong Kong
Authorized Representatives Mr . Lang Xulin (؍)
Room 16B, Unit 1, Block 1, Phase 1
Jindimeilong Town Garden
Longhua District
Shenzhen
PRC
CORPORATE INFORMATION
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--- page 85 ---
Ms. Ching Shuk Wah Shirley ( ೻ૺശ )
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wan Chai
Hong Kong
Nomination Committee Dr. Hou Lingling (ޛޛڨ)Chairlady)
Mr. Ng Jack Ho Wan ( юखථ)
Mr. Lang Xulin (؍)
Audit Committee Mr. Ng Jack Ho Wan ( юखථ) (Chairman)
Mr. Li Yibin ( ҽ൪ⅳ)
Mr. Jing Liang (ڥ)
Remuneration and Appraisal
Committee
Mr. Li Yibin ( ҽ൪ⅳ) (Chairman)
Dr. Hou Lingling (ޛޛڨ)
Mr. Wang Yong (ۇ)
Strategy Committee Mr. Liu Peichao ( ᄎ੃൴) (Chairman)
Mr. Li Yibin ( ҽ൪ⅳ)
Mr. Wang Yong (ۇ)
Compliance Advisor Guotai Junan Capital Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shop 1712-1716, 17th Floor
Hopewell Centre
183 Queen’s Road East, Wan Chai
Hong Kong
Principal Bank Agricultural Bank of China Limited
The University City Branch
1/F, Building 2, Sangtaidanhua
No. 1 Pingshan Road
Nanshan District
Shenzhen
PRC
CORPORATE INFORMATION
–7 6–


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The information and statistics set out in this section and other sections of this prospectus were
extracted from the report prepared by CIC, which was commissioned by us, and from various official
governmental publications and other publicly available publications. We engaged CIC to prepare the
CIC Report, an independent industry report, in connection with the Global Offering. The information
from official government sources has not been independently verified by us or any other parties
involved in the Global Offering, or any of our or their respective directors, senior management,
representatives, advisers or any other persons involved in the Global Offering and no representation
is given as to its accuracy.
OVERVIEW OF THE GLOBAL AND CHINA’S ROBOT AND COBOT INDUSTRIES
Overview of Robot Industry
Amidst aging global population and the rapid advancements in robotics and AI technologies, the
efficiency and capability of robots have been greatly enhanced. The integration of AI-based robot
algorithms allows robots to undertake complex tasks with agility, boosting an increased penetration of
robots in various downstream fields, spanning industrial, commercial, medical and healthcare, scientific
research and education sectors.
The advancement of robotics is gradually liberating humans from mundane tasks. As the
functionality, human-robot interaction and safety of robots improve, robots become more flexible and
adaptive, enabling them to perform a wider range of tasks. At the same time, advancements in AI are
significantly enhancing the intelligent processing capabilities, i.e., the brain function, of the new
generation of robots, enabling them to undertake more complex tasks. The global robot industry as
measured by sales revenue, has grown from US$39.0 billion in 2019 to US$61.4 billion in 2023, at a
CAGR of 12.0%. The market size is expected to reach US$131.4 billion in 2028, at a CAGR of 16.4%
between 2023 and 2028.
Definition and classification of robots
Robots are machines capable of semi-autonomous or fully autonomous operations, with the ability
to perceive, make decisions, and execute tasks. Robots can be classified into four categories.
Type Definition
Cobots ............... C obots are robots with operational robotic arm intended for direct human-robot
interaction or collaboration within a shared space or where humans and robots are in
proximity. The key features of cobots include safety standards, ease of use, higher
flexibility, and their inherent ability to collaborate with human workers. Cobots are widely
adopted in many industries, such as industrial, commercial, medical and healthcare, and
scientific research and education sectors.
Traditional industrial
robots ..............
Traditional industrial robots are automated, programmable robots used in dedicated
industrial workplaces, often restricted by safety barriers as they are not designed for direct
human interactions. It is more bulky and heavier as compared with other robots.
Service robots .......... Service robots are robots designed to perform functional tasks for humans or equipment,
excluding industrial automation applications. Service robots can be categorized into
domestic service robots and professional service robots.
Other specialized robots . . . Other specialized robots are used in specialized fields such as the military, aerospace,
medical, and agriculture sectors, designed for specific tasks. Specialized robots are
typically controlled by human operators under special conditions.
Sources: ISO, IFR, CIC
INDUSTRY OVERVIEW
–7 7–


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Market Size of the Global Robots Market by Revenue, Categorized by Robot Type, 2019-2028E
0
60
90
30
150
US$ billion
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
20.6
39.0 40.2
47.0
54.3
61.4
70.1
81.1
94.3
110.7
5.3 6.6
12.6 13.1
14.9
17.2
19.9
23.0
26.7
30.9
35.9
20.1 23.2
8.2
26.0
10.1
28.5
12.0
31.7
14.0
35.8
16.7
47.9
41.0
41.7
0.5 0.5
0.7
0.9
1.0
1.4
1.9
2.5
3.5
4.9
131.4
Cobots
Traditional industrial robots
Service robots
Other specialized robots
CAGR 2019-2023 CAGR 2023-2028E
22.2% 36.6%
12.1% 15.9%
8.4% 14.9%
22.7% 18.3%
TOTAL 12.0% 16.4%
19.8 23.4 27.8
56.9
Sources: IFR, Mordor Intelligence, CIC
Overview of Cobot Industry
Classification of cobots
Cobots are primarily categorized by degrees of freedom and payload capacity. In terms of degrees of
freedom, there are four-axis, six-axis and seven-axis cobots. In general, a higher number of axes
corresponds to greater flexibility. Cobots can also be categorized by payload into light payload (<7kg),
medium payload (7-12kg), heavy payload (12-20kg), super heavy payload (20-30kg) and extra heavy
payload (>30kg). In 2023, six-axis and four-axis cobots accounted for 53.2% and 40.9% of the global
market shares as measured by shipment volume, respectively, while seven-axis cobots had a market share
of 5.9%. The world’s first cobot was a six-axis cobot. Six-axis cobots are expected to continue to take the
lead in the industry in the foreseeable future, which is expected to take up 62.8% of the total global
market share in 2028. The six-axis design offers ample flexibility and precision to meet the needs of most
industrial applications while maintaining the advantages of cost-effectiveness and ease of programming,
effectively replicating the motion range of the human arms. The shipment volume distribution by payload
in 2023 indicates a strong preference for light payload and medium payload cobots, with light payload
and medium payload cobots accounting for a global market share of 65.0% and 25.0%, respectively.
Four-axis cobots Six-axis cobots Seven-axis cobots
Typical applications
•F o ur-axis cobots are used in
applications such as adhesive
application, material handling,
inspection and testing, and assembly
of small components.
• Six-axis cobots are extensi vely used
in complex applications such as
loading and unloading on production
lines, material and palletizing.
They streamline automated
operations in shared space within
production lines and are well-suited
for labor-intensive environments.
They are also widely used in
commercial and healthcare sectors.
•S e ven-axis cobots are often deployed
in applications such as medical
surgical assistance, intricate precision
manufacturing and research.
Source: CIC
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Development of cobots
The first generation of cobots was introduced in 2008 primarily for manufacturing purposes,
addressing the safety challenges of human-robot collaboration and demonstrating high adaptability to
various production lines. In 2015, a number of companies specialized in cobot development started to
emerge in both China and abroad, and traditional industrial robot companies also began building cobot
production lines. In 2020, smart cobots with vision sensors reached a milestone of 10 thousand units
shipment, demonstrating their commercialization and showcasing greater flexibility and versatility. With
the development of AI, smart cobots are expected to be commercialized more extensively in the
foreseeable future, with a wider variety of applications.
Comparative Analysis of Cobots, Traditional Industrial Robots, and Service Robots
Cobots Traditional industrial robots Service robots
Typical use cases
• Various scenarios such as industrial,
commercial, medical and healthcare,
and scientific research and education
•I n d ustrial scenarios such as
automotive manufacturing,
characterized by fixed assembly lines,
high speed, heavy loads, long reach,
and minimal need for human
interaction
• Non-ind ustrial scenarios such as
education, logistics, reception,
food delivery, vacuum and
floor cleaning
Structure and
function
•E q uipped with robotic arm, emphasis
on upper body operations
•E q uipped with robotic arm, emphasis
on upper body operations
• Not eq uipped with robotic arm,
emphasis on the lower body
movement, including wheeled,
tracked, or legged mobile platform
Execution, flexibility
and interaction
•S t r o ng execution capability with
flexibility
• More interaction with human through
graphical programming with drag-
and-drop functionality
•S t r o ng execution capability
• Limited interaction with human
• Moderate exec ution capability
• Moderate interaction with human,
mainly through voice interaction and
touch screen operation
Load and precisions
• Emphasizin g low self-weight with
integrated joints, flexibility and
safety
• With rated loads typically under 20kg,
and generally not exceeding 30kg
•H i gh rigidity, prioritizing precision
and speed
• With a wide range of rated loads,
typically ranging from 20kg to
1,000kg for medium to heavy loads
•L i ghtweight design with mobility
•L o w self-weight
Technical difficulties
•H i gh-precision position control and
force control
• Inte gration of complex components
and control algorithms
• Collision a voidance and human-
robot interaction techniques
•H i gh-precision position control
and moderate force control
• Inte gration of complex components
and control algorithms
•N a vigation and path planning
• Ener gy efficiency and endurance
duration
•H uman-robot interaction techniques
Safety
•H uman-robot collaboration with
features enabling safe co-working in
the same shared space
•R e q uires a physical barrier, such as a
fence, to ensure safety by separating
humans from machinery
•H i gh security with obstacle
avoidance function, ensuring no harm
when interacting with human
Price
Price range from low         to high
Source: CIC
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Industry chain of the global cobot industry
The cobot industry chain includes upstream core components, midstream research and development,
production and integration, and downstream applications. The following table sets forth the details of
these industry participants.
Industry Chain Analysis of the Global Cobot Market
Upstream Midstream Downstream
Core components Research and development,
production and integration
Application
Cobots research
and development
Cobots production
System integration
Industrial
Commercial
Medical and
healthcare
Scientific
research and
education
Industry
Scenarios
Material
handling
Welding
Assembly
Processing
Unmanned
retail
Medical
assistance, etc.
Others
Sensors
(vision, force, etc.)
Gear reducers
Controllers
Encoders
Servo systems
Source: CIC
Key technology of the cobot industry
Key technologies primarily consist of cobot algorithms and hardware technologies. Cobot
algorithms enable robots to sense, decide and act with precision. For example, human-robot interaction
algorithms ensure safe and efficient collaboration between human and cobots. In addition, hardware
technologies form the physical foundation for cobots. Looking ahead, AI’s role is pivotal, empowering
cobots with the ability to learn from demonstrations, adapt to varying conditions, and collaborate
effectively with human in shared workspaces. For example, a cobot on a factory floor can learn to
assemble a product by perceiving a worker’s movements and autonomously adjust its actions when
introduced to a new component, improving workflow efficiency and safety.
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Category Analysis
Perception algorithm
Motion control algorithm
User interface algorithm
Teleoperation technology
Key technology
Core robot
algorithms
Human-robot
interaction
algorithms
AI-based robot
algorithms
Hardware
technologies
• It enables robots to sense and interpret their en vironment through sensory inputs. They process data from
cameras, force sensors and other sensors to provide the robot with an understanding of its surroundings.
Examples of perception algorithms include sensor fusion algorithms, visual demonstration learning
technology.
• It is responsible for plannin g and executing actions based on the robot’s perception of the environment and
its objectives.
• It mana ges the robot’s physical movement, ensuring precise and smooth motion of its actuators and joints.
Examples of motion control algorithms include kinematic compensation algorithm, continuous trajectory
control algorithm, force control algorithm.
Dual-arm collaborative
operation technology
• It refers to an ad vanced control strategy that enables a pair of robotic arms to work in unison, sharing
information and coordinating their movements for efficient and precise task execution. This technology
broadens the applicability of cobots to scenarios that demand intricate synchronization and flexibility.
• For cobots with touch screens, graphic programming with drag-and-drop teaching functionality, or other
interactive interfaces, these algorithms manage the interaction flow and user inputs.
• It allo ws users to operate cobots remotely in complex or hazardous environments, with force feedback
capabilities, achieving high real-time performance and operational transparency.
• It ens ures that the cobot stops or adjusts its trajectory when a human is in close proximity in order to prevent
collisions.
• It takes the capabilities of perception al gorithms a step further by using machine learning and deep learning
to improve the robot’s ability to interpret complex sensory data and adapt to new situations. It provides a
higher level of understanding and context awareness, allowing the robot to make more informed decisions
and interact more naturally with its environment.
• It refers to a set of al gorithms that enable a system to improve its performance on tasks through experience
without being explicitly programmed, which is particularly important for advancing the capabilities of robots
to operate autonomously, learn new skills, and handle unpredictable situations.
• It allo ws for seamless and intuitive communication between humans and machines, such as speech
recognition, gesture recognition, and force sensing.
• It in volves the production of essential components such as gear reducers, servo systems, controllers, and
sensors. Advanced manufacturing techniques improve the quality, precision, and reliability of these
components, enhancing the overall performance of cobots.
• It pro vides tactile feedback and environmental perception. This technology enables cobots to interact with
objects and humans more intuitively and safely in shared workspaces.
• It inte grates torque output, transmission, and control into a single joint, featuring a decoupled design for easy
maintenance and a bearing structure to enhance operational stability.
Integrated joint
technology
• It incl udes the design and fabrication of the entire robot system, integrating various components into a
cohesive and functional unit. Efficient design methodologies and manufacturing processes optimize robot
performance while minimizing production costs.
Complete machine design and
manufacturing technology
Flexible electronic
skin technology
Core component
manufacturing technology
Intelligent interaction
algorithm
Autonomous learning
algorithm
Intelligent perception
algorithm
Collision avoidance
algorithm
Decision-making
algorithm
Source: CIC
Market size of the global cobot industry
The global cobot industry as measured by sales revenue has grown from US$466.6 million in 2019
to US$1,039.5 million in 2023, at a CAGR of 22.2%. The global cobot market experienced a slowdown in
growth between 2022 and 2023 in view of the weaker-than-expected recovery of the global economy after
the COVID-19 pandemic, a high-interest-rate financial environment that restrained some manufacturers’
investment intentions, geopolitical conflicts, and a slow reshaping of supply chains in the post-pandemic
era. However, it is expected that the market will grow exponentially from 2024 onwards, with the market
size projected to reach US$4,950.0 million in 2028, at a CAGR of 36.6% from 2023 to 2028. The rapid
growth of the cobot market is primarily driven by several key factors. The U.S. Federal Reserve’s
decision to lower interest rates is instrumental in reducing global financing costs, which in turn
stimulates investment and consumer spending, providing momentum for the global economic recovery.
Concurrently, the field of general AI technology is experiencing explosive growth. The integration of AI
and machine vision technologies not only greatly enhances the performance of cobots but also contributes
to economies of scale, reducing costs and making cobots more affordable. Additionally, labor shortages
and rising labor costs due to an aging population have resulted in an increasing demand for automation.
As a result, businesses in commercial sectors are increasingly adopting cobots for use cases such as
unmanned retail, assisted meal preparation, and other services to improve the operational economic
efficiency. In particular, China is playing an increasingly important role in the global cobot market, with
its share in the global cobot market projected to increase from 26.3% in 2023 to 37.2% in 2028, at a
CAGR of 46.5% from 2023 to 2028.
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Market Size of the Global Cobot by Revenue,
Categorized by Downstream Industry Sectors, 2019-2028E
0
1,000
3,000
4,000
2,000
5,000
US$ million
2019
396.9
14.3
27.2
22.3
5.9
393.4
20.9
31.3
27.9
6.6
561.6
35.6
47.2
45.8
9.8
719.5
60
70.4
74.5
14.4
788.7
72.7
75.7
87.2
15.1
996.9
129.0
105.5
126.3
20.7
1,264.2
229.9
147.4
183.6
28.4
1,620.3
408.0
205.3
265.8
38.8
2,111.4
708.6
279.8
376.6
51.9
2,781.8
1,204.7
373.2
522.3
67.9
2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
466.6 480.1
700.0
938.7 1,039.5
1,378.4
1,853.5
2,538.2
3,528.3
4,950.0
Industrial sector
Commercial sector
Medical and healthcare sector
Scientific research and education sector
CAGR 2019-2023 CAGR 2023-2028E
18.7% 28.7%
50.1% 75.3%
29.1% 37.6%
40.6% 43.0%
Others 26.7% 35.0%
Total 22.2% 36.6%
Industrial sector
Commercial sector
Medical and healthcare sector
Scientific research and
education sector
18.6% 23.7% 29.8% 25.6% 26.3% 27.6% 29.2% 31.1% 33.9% 37.2%China’s market share of
the global cobot market:
Others
466.6 480.1 700.0 938.7 1,039.5 1,378.4 1,853.5 2,538.2 3,528.3 4,950.0Total
Sources: IFR, Mordor Intelligence, CIC
(1) Others include agricultural sector, entertainment sector and specialized sector.
The global cobot market for the industrial sectors has grown from US$396.9 million in 2019 to
US$788.7 million in 2023, at a CAGR of 18.7%. The market size is expected to reach US$2,781.8 million
in 2028, at a CAGR of 28.7% between 2023 and 2028. With the rapid growth of advanced manufacturing
and automation, cobots can be utilized in various use cases, such as material handling, welding, assembly
and processing.
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Market Size of the Global Industrial Cobot by Revenue,
Categorized by Industrial Market Segments, 2019-2028E
0
1,000
3,000
2,000
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
396.9 393.4
561.6
719.5 788.7
996.9
1,264.2
1,620.3
2,111.4
2,781.8
37.4
79.3 73.9
37.6
584.3
687.8
526.1
451.4
352.4
276.1249.3
192.7
215.9148.3
133.6 282.2 315.5
406.7
769.0
914.2
117.1
70.954.5
98.5
78.9
118.3
101.2
136.6 156.5
130.2
1,023.3
1,228.5
133.5
146.7
Automotive and components (1)
3C electronics (2)
Semiconductors (3)
Metal and machining (4)
CAGR 2019-2023 CAGR 2023-2028E
19.9% 30.0%
21.1% 31.2%
20.5% 30.6%
10.5% 14.2%
Total 18.7% 28.7%
169.4
178.8 204.1
224.1 299.7
230.3
Sources: IFR, Mordor Intelligence, CIC
(1) In the automobile and components factories, cobots are widely deployed in the manufacturing process. Specific use
cases include windshield adhesive application, screwdriving in smart cockpits, inspection for engines and vehicle
bodies, and material handling for various automotive components.
(2) In the 3C electronics industry, cobots are applied in the manufacturing processes of component assembly, final product
assembly, testing and packaging.
(3) In the semiconductor industry, cobots are applied in production, manufacturing, handling, and inspection processes.
This includes tasks such as wafer handling, wafer inspection, chip testing, sorting, and packaging.
(4) In the metal and machining industry, cobots are applied in cutting, forming, welding, and parts inspection.
The China’s cobot market for the industrial sectors has grown from US$71.2 million in 2019 to
US$203.4 million in 2023, at a CAGR of 30.0%. The market size is expected to reach US$934.4 million
in 2028, at a CAGR of 35.7% between 2023 and 2028.
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Market Size of the China’s Industrial Cobot by Revenue,
Categorized by Industrial Market Segments, 2019-2028E
0
250
1,000
500
750
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
71.2 91.5
164.3 188.5 203.4
274.8
374.2
507.3
689.0
934.4
6.5
21.9
8.5
167.3
225.0
160.3
122.1
88.8
65.159.751.6
61.4
33.0
72.9 81.3 113.8
229.4
316.2
37.5
18.415.6
35.8 36.6
28.2
44.1 52.4
39.3
308.4
443.9
24.8
Automotive and components
3C electronics
Semiconductors
Mechanical manufacturing
CAGR 2019-2023 CAGR 2023-2028E
31.3% 36.5%
34.5% 40.4%
33.2% 39.1%
19.3% 15.9%
Total 30.0% 35.7%
54.6
60.4 67.3
76.0 105.7
76.4
28.4
21.618.0
20.3
Sources: IFR, Mordor Intelligence, CIC
Market Drivers of the Global & China’s Industrial Cobots
• Diversifying Industrial Demands. Industrial cobots are increasingly handling tasks including
assembly, packaging, inspection, and material handling across industrial sectors such as
automotive, 3C electronics, and semiconductor. The rapid growth of the downstream markets is
an important support to ensure the rapid expansion of the global industrial cobot industry. The
sales volume of global new energy vehicle is expected to increase from 14.6 million in 2023 to
38.2 million in 2028, with a CAGR of 21.2%, driven by carbon neutrality policy, autonomous
driving advancements, and consumer demand for upgrades. Similarly, the global AR/VR
market is expected to increase from US$47.6 billion in 2023 to US$146.7 billion in 2028, with
a CAGR of 25.2%, driven by hardware upgrades, application diversification, and cost
reductions. Additionally, the global automotive semiconductor market is expected to increase
from US$67.0 billion in 2023 to US$115.2 billion in 2028, with a CAGR of 11.5%, driven by
AI-driven chip demand, technological innovations, and electrification and intelligent
development of vehicles.
• Industrial Automation and Intelligent Upgrading. With the fourth industrial revolution,
automation and intelligent upgrading have become pivotal to manufacturing’s evolution.
Industrial cobots excel at executing high-precision, repetitive tasks and are designed to safely
work alongside humans, enhancing production line efficiency and reducing costs. With the
growing demand for intelligent and flexible manufacturing, the application scope and demand
for industrial cobots will continue to expand.
• Global Labor Shortage. By 2030, a projected deficit of 85.0 million workers worldwide is
expected to drive industrial cobot demand. Aging populations in developed countries and
rising inflation rates have caused a general increase in labor costs. As labor costs continue to
increase and labor markets tighten, factories are turning to industrial cobots to enhance
production efficiency and reduce operational costs.
The global cobot market for the commercial sectors has grown from US$14.3 million in 2019 to
US$72.7 million in 2023, a CAGR of 50.1%. The market size is expected to reach US$1,204.7 million in
2028, at a CAGR of 75.3% between 2023 and 2028. Cobots are expected to enhance operational
flexibility, reduce labor costs, and improve service quality in commercial sector.
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Market Size of the Global Commercial Cobot by Revenue,
Categorized by Commercial Market Segments, 2019-2028E
0
700
1,050
350
1,400
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
14.3 20.9 35.6 13.0
50.2 94.3 172.1
305.7
493.2
285.8
162.1
90.0
49.8
52.8
89.7
151.5
250.7
405.9
1,204.7
708.6
408.0
229.9
129.0
13.8
72.760.0 22.3
133.5
Unmanned retail (1)
Assisted meal preparation (2)
Other services (3)
CAGR 2019-2023 CAGR 2023-2028E
44.3% 67.0%
53.1% 78.0%
60.4% 85.8%
Total 50.1% 75.3%
6.0 10.8
27.6
5.0 7.2 26.8 31.310.1
2.1 3.3
7.5
16.6 26.4
Sources: IFR, Mordor Intelligence, CIC
(1) In the unmanned retail industry, cobots are adopted for item sorting and delivery in the unmanned stores, hotels,
pharmacies and warehouses, or integrated into unmanned vending machines in commercial space such as shopping
malls and supermarkets.
(2) In the catering industry, cobots are used for assisting workers in meal preparation, such as making pancakes, cooking
noodles, creating latte art, brewing tea drinks and making ice creams.
(3) Cobots can also be used in a variety of innovative use cases such as refueling and charging in the gas stations and
e-commerce photography.
The China’s cobot market for the commercial sectors has grown from US$5.0 million in 2019 to
US$29.5 million in 2023, at a CAGR of 55.9%. The market size is expected to reach US$556.4 million in
2028, at a CAGR of 79.9% between 2023 and 2028.
Market Size of the China’s Commercial Cobot by Revenue,
Categorized by Commercial Market Segments, 2019-2028E
0
300
450
150
600
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
5.0 7.7 16.6 7.6
9.7 16.8 32.0 65.0
131.3
230.8
116.5
58.7
31.718.919.8
31.4
55.1
103.6
194.4
556.4
285.2
145.8
79.9
48.4
5.6
29.520.7 9.1
Unmanned retail (1)
Assisted meal preparation (2)
Other services (3)
CAGR 2019-2023 CAGR 2023-2028E
49.9% 73.0%
59.0% 82.6%
66.2% 87.9%
Total 55.9% 79.9%
2.8 3.7
11.4
1.8 2.5 2.8 6.1 7.8 12.53.70.7 1.2
Sources: IFR, Mordor Intelligence, CIC
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Market Drivers of the Global & China’s Commercial Cobots
• Commercial Digitalization and AI+. The integration of commercial digitalization and AI has
elevated the technological standards of new retail formats, enabling unmanned retail. These
innovations have enhanced transaction efficiency and curtailed labor costs. In 2023, the global
unmanned retail market reached US$72.8 billion, and is expected to grow to US$229.6 billion
by 2028, at a CAGR of 25.8% between 2023 and 2028. Unmanned retail emerges as a novel
retail model that economizes on human resource costs, signaling a promising developmental
outlook.
• Increasing Labor Costs. A 3.6% increase in the global Total Labor Cost (TLC) per worker in
2023 due to rising wages has driven up labor costs significantly. This upward trend in labor
expenses is accelerating the adoption of commercial cobots as businesses seek operational
efficiency enhancements while reducing labor costs. The shift towards automation offers a
strategic solution for companies to maintain competitiveness in an increasingly cost-sensitive
environment.
The global cobot market for the medical and healthcare sector has grown from US$27.2 million in
2019 to US$75.7 million in 2023, at a CAGR of 29.1%. The market size is expected to reach US$373.2
million in 2028, at a CAGR of 37.6% between 2023 and 2028. As society ages and caregiver costs rise,
physiotherapy and rehabilitation will become important areas for the development of cobots in the
medical and healthcare sectors.
Market Size of the Global Medical and Healthcare Cobot by Revenue,
Categorized by Medical and Healthcare Market Segments, 2019-2028E
0
200
150
50
300
250
100
400
350
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
27.2 31.3
47.2
70.4 75.7
105.5
147.4
205.3
279.8
20.6 31.7
15.4 22.1
48.3 53.0
75.3
30.2 40.1
107.3
152.5
52.8 67.8
212.0
373.2
84.8
288.4
22.7
Physiotherapy and rehabilitation (1)
Medical assistance (2)
CAGR 2019-2023 CAGR 2023-2028E
31.7% 40.3%
23.9% 30.1%
Total 29.1% 37.6%
17.6
9.6 10.6
Sources: IFR, Mordor Intelligence, CIC
(1) Cobots are used for moxibustion physiotherapy and physical rehabilitation.
(2) Cobots are used for surgical assistance and laboratory automation, such as drug development and testing as well as
blood testing.
The China’s cobot market for the medical and healthcare sector has grown from US$2.3 million in
2019 to US$7.9 million in 2023, at a CAGR of 35.3%. The market size is expected to reach US$75.3
million in 2028, at a CAGR of 57.1% between 2023 and 2028.
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Market Size of the China’s Medical and Healthcare Cobot by Revenue,
Categorized by Medical and Healthcare Market Segments, 2019-2028E
0
40
30
10
60
50
20
80
70
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
2.3 3.1 5.9 6.3 7.9
11.1
17.2
27.0
45.1
4.4
8.2
2.9 4.1
13.2
21.2
5.7 8.6
36.6
75.3
12.5
62.9
5.7
Physiotherapy and rehabilitation
Medical assistance
CAGR 2019-2023 CAGR 2023-2028E
39.3% 61.8%
27.0% 41.4%
TOTAL 35.3% 57.1%
1.1 1.9 1.9 2.21.5 2.1 4.0
0.8
Sources: IFR, Mordor Intelligence, CIC
Market Drivers of the Global & China’s Medical and Healthcare Cobots
• Expanding Healthcare Market. In 2023, the global digital healthcare market reached US$224.2
billion, and is expected to grow to US$784.3 billion by 2028, at a CAGR of 28.5% between
2023 and 2028. The development of the global digital healthcare industry is driven by the
growing popularity of digital healthcare, and the continuous penetration of digital
technologies such as cloud computing and artificial intelligence in the medical field.
Meanwhile, the global shortage of medical service personnel against the backdrop of an aging
population and the growing demand for automation equipment in the healthcare service
industry will drive the rapid expansion of the global medical and healthcare cobot industry.
• Aging Population. In 2023, the global population aged 65 and above reached 761.0 million, and
is expected to grow to 1.6 billion by 2050. China’s demographic is aging rapidly, with the
number of people aged 65 and above surpassing 220.0 million in 2023, accounting for 28.9% of
the global population in that age group. This trend is intensifying the demand for elderly care,
signaling a profound societal shift. The development of medical and healthcare cobots is
poised to benefit from these trends, offering round-the-clock assistance, alleviating staffing
shortages in elderly care and enhancing the quality of care through automated and precise
services.
The global cobot market for the scientific research and education sector has grown from US$22.3
million in 2019 to US$87.2 million in 2023, at a CAGR of 40.6%. The market size is expected to reach
US$522.3 million in 2028, at a CAGR of 43.0% between 2023 and 2028. Cobots are extensively adopted
in the fields of scientific research and education due to their ability to offer hands-on practical
experience, which is highly valued in vocational training. Additionally, the focus on emerging and
high-potential areas of robotics and AI in scientific research makes cobots an indispensable tool for
exploration and learning in these cutting-edge domains.
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Market Size of the Global Scientific Research and Education Cobot (1) by Revenue,
Categorized by Scientific Research and Education Market Segments, 2019-2028E
0
300
450
150
600
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
4.3
2.7
22.3 27.9 45.8
74.5 87.2
126.3
183.6
265.8
376.6
522.3
5.4
3.2
11.0 9.013.6 22.3 26.2 38.0
50.8
74.2
55.5
80.7
107.9
153.7
114.8
159.8
214.2
34.929.6
5.1
18.1
14.7 17.47.8 8.7 25.5 37.4
16.4
54.8
22.4 29.7
78.4
109.8
38.512.06.6 8.3
8.7
Higher education
Scientific research
Vocational education
K-12 education
CAGR 2019-2023 CAGR 2023-2028E
41.3% 43.8%
41.2% 43.6%
42.0% 44.5%
34.2% 34.6%
Total 40.6% 43.0%
Sources: IFR, Mordor Intelligence, CIC
(1) Cobots are used in scientific research and education for industry-academia-research integration projects (ɓ᜗
ʷධͦ), STEAM education, research assistance and training simulations.
The China’s cobot market for the scientific research and education sector has grown from US$7.6
million in 2019 to US$30.5 million in 2023, at a CAGR of 41.7%. The market size is expected to reach
US$259.5 million in 2028, at a CAGR of 53.5% between 2023 and 2028.
Market Size of the China’s Scientific Research and Education Cobot
by Revenue, Categorized by Downstream Industry Sectors, 2019-2028E
0
200
250
150
100
50
300
US$ million
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
1.47.6 10.6 20.7 23.5 30.5
42.9
66.8
104.4
166.1
259.5
2.0
1.9
3.9
7.6
8.8 12.6
16.6
26.4
19.9
31.7
42.1
68.3
51.1
81.1
108.9
11.68.7
3.5
4.4
3.65.8 6.7 5.8 4.3 8.2 12.9
7.5
20.4
10.2 13.8
32.8
49.2
20.35.42.1 2.9
Scientific research
Higher education
Vocational education
K-12 education
CAGR 2019-2023 CAGR 2023-2028E
43.9% 55.8%
44.6% 56.5%
43.1% 53.4%
30.8% 36.6%
Total 41.7% 53.5%
1.52.7 3.8
Sources: IFR, Mordor Intelligence, CIC
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Market Drivers of Global & China’s Scientific Research and Education Cobots
• Digital Transformation of Education. Driven by the increasing demands for higher education
quality and efficiency, the growth of personalized learning needs, and the in-depth application
of digital technology in the field of education, the digital transformation and upgrading of the
education industry is accelerating. In 2023, the global digital education market reached
US$19.7 billion, and is expected to grow to US$66.7 billion by 2028, at a CAGR of 28.0%
between 2023 and 2028. Higher vocational education places greater emphasis on practical
experience accumulation, and university courses in AI and robotics also require robotic
equipment as an important teaching aid. Therefore, the demand for cobot products in training
laboratories is expected to continue to grow. Meanwhile, the progressive integration of AI
courses in K-12 and higher education is broadening the role of cobots in educational settings.
Beyond being practical teaching tools, they also foster STEM education and encourage
interdisciplinary dialogue.
• Continuously Improving Research Capabilities. In 2023, the global research investment
reached approximately US$2.3 trillion. AI is vigorously advancing the transformation of
research paradigms, and it is expected that the scale of global research investment will
continue to grow. Given the high precision, repetition, and extensive data processing and
collection inherent in scientific research tasks, cobots can assist with accomplishing these
tasks more accurately and swiftly. Therefore, more cobots will be applied to scientific research
in the future, promoting the development of global scientific research, as they are intertwined
with the progress of AI.
The growth of the global cobot market is primarily driven by demand from major economies such as
China, Japan, South Korea, Germany, and the United States. Moreover, China and the Asia-Pacific region
are the fastest-growing market segments. China stands out with a projected CAGR of 45.1% between
2023 and 2028, indicating substantial growth potential for the cobot market and suggesting that it will
continue to be a key driver of growth in the global landscape.
Market Size of the Global Cobot Industry, by Installation Value,
Categorized by End-use Countries and Regions, 2019-2028E
0%
20%
40%
60%
80%
100%
CAGR 2019-2023 CAGR 2023-2028E
33.8% 45.1%
12.4% 33.5%
11.1% 32.4%
20.4% 40.1%
33.3% 29.8%
17.2% 31.2%
15.2% 24.6%
14.4% 30.0%
12.5% 30.6%
14.4% 29.3%
17.5% 32.0%
17.5% 31.4%
15.7% 29.9%
25.2% 21.8%
Total 21.7% 35.5%
US$ million
1.1%
0.8%
0.6%
14.0%
12.0%
10.2%
7.2%
10.4%
8.4%
9.0%
6.3%
5.6%
11.9%
8.6%
8.0%
20.1%
29.5%
41.5%
2019
1.0%
0.7% 1.0%0.5%
7.4%
2.1%
13.4%
6.2%
2023
1.1%
0.5% 0.8%
0.9%
0.4%
6.5%
1.8%
10.8%
3.6%
2028E
625.7 1,370.4 6,268.2
1.3%0.6%
8.5%
2.4%
16.3%
5.5%
1.2%
China
Japan
South Korea
Southeast Asia
Other Asian Pacific countries
United States
Canada
Mexico
Brazil
Other South American countries
Germany
France
Other European countries
Other countries and regions
Sources: IFR, CIC
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Market drivers of the global cobot market
• Favorable policies promoting research and applications of cobots. Many countries are
introducing policies to provide both macro-level guidance and concrete support for the
development of cobots in terms of technology, funding, and applications. Certain policies
issued by the Chinese government have positive impact on our business, including (1) the 14th
Five Year Plan for the Development of China’s Robot Industry which seeks to promote
breakthroughs in core robot technologies and high-end products and (2) the Implementation
Plan for “Robot+” Application Action which aims to expand the use of robots manufacturing,
agriculture, and healthcare, fostering the digital transformation of the economy and society. In
particular, the 14th Five Year Plan for the Development of China’s Robot Industry fosters
breakthroughs in core robotic technologies, boosting development of cobots with large load
capacity, lightweight, flexible, dual-arm and mobile capabilities, promoting the going-global
strategy of robot products and solutions, which aligns with our global strategic sales plan for
cobots, and providing cobot companies like us with the impetus for technological upgrades and
product innovation; the Implementation Plan for “Robot+” Application Action promotes the
application of robots across various industries, accelerates the digital transformation and
business expansion of cobot companies, and encourages robot companies to cooperate with
universities and vocational colleges to establish robot talent internship and training bases,
providing cobot companies like us with broader market opportunities.
• Aging population and rising labor cost. As population ages, the workforce shrinks in
proportion to the overall population, putting pressure on labor supply, reducing the pool of
available workers, and driving up labor costs. The projected working-age population will
decrease by 10% in OECD countries on average by 2060, while the proportion of population
aged 65 and above globally is projected to increase from 10% in 2022 to 16% by 2050. The
global labor participation rate declined from 71.2% in 2018 to 65.1% in 2022. As a result of the
shortage of labor force, a 19% increase in global income from 2019 to 2023 further drove up
labor costs, creating a significant demand for automation solutions such as cobots in various
industries to address labor shortages and cost challenges.
• Advancements in smart cobots. Smart cobots, with advanced technology such as AI and vision
sensors, are enhancing human-robot interactions. New interaction methods like manual drag
teaching, voice control, and motion capture are also emerging. The global market of the smart
cobots is expected to grow from US$0.4 billion in 2023 to US$3.6 billion in 2028, at a CAGR
of 58.1%. Technologies such as machine vision and AI touch are equipping cobots with
abilities to “see” and “touch,” making cobots capable of performing more complex tasks. The
economic benefit of artificial labor costs that can be collaborated by smart cobots globally is
projected to reach US$19.6 billion in 2028.
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Development Trends Analysis of the Global Cobot Market
• Diversification in downstream use cases. The downstream use cases in the global cobot market
are becoming increasingly diversified, driven by industry-specific demands, customization for
various applications and integration with AI technologies. Enhanced safety measures have
enabled closer human-robot collaborations, expanding global market reach. In commercial
settings, customized cobots are increasingly used for inventory management, shelf stocking,
unmanned retail, assisted meal preparation and other services. The global cobot market for
commercial sectors experienced rapid growth, reaching a value of US$72.7 million in 2023,
and is expected to reach US$1,204.7 million by 2028, at a CAGR of 75.3%.
• Integrating lightweight designs with automated production. Drive and control integration
technology has advanced the development of cobot joints towards more compact, integrated,
and intelligent designs. This has facilitated the application of cobots in a broader range of
fields. Technologies such as intelligent perception and integrated joint design have propelled
the trend towards greater flexibility and automation. These advancements have enhanced cobot
safety, usability and flexibility and enabled them to adapt to the ever-changing demands of
production and various working environments.
• Integration of AI into cobots. The integration of AI into cobots is driving the development of
smart cobots that are more versatile and adaptive than before. Smart cobots with AI perception
and decision-making ability are empowered to perform complex tasks with greater autonomy,
make intelligent decisions based on real-time data, and collaborate seamlessly with human
workers in various settings, from manufacturing floors to healthcare facilities. This evolution
results in a new generation of cobots that can engage in a wider range of functions, adapt to
dynamic work environments, and significantly enhance the efficiency and innovation of the
industries they serve.
• China’s cobot industry driving global expansion. The escalating export volume of Chinese
cobots underscores China’s growing dominance in the global cobot market, reflecting key
industry trends. Bolstered by technological advancements and favorable policies, China has
improved domestic production, boosting competitiveness and cost-effectiveness. Chinese
cobots, known for their quality and affordability, are gaining significant traction in
international markets. Projections suggest that China’s share in the global cobot industry as
measured by shipment volume is expected to increase from 37.1% in 2023 to 50.1% in 2028.
Historical and projected trends of the cost in China’s cobot industry
Gear reducers, servo systems and controllers are core components of cobots, accounting for over
70% of the total manufacturing cost of a cobot. The average price of core components in China’s cobot
shows a downward trend, benefiting from accelerated localization and simplified deployment methods.
For instance, a six-axis cobot with a 5kg payload comprises six gear reducers, six servo systems, one
motion controller, sensors and other components. The gear reducers, motion controllers, servo systems,
sensors and other components account for 34%, 23%, 18%, 10% and 15% of the total cost, respectively.
Increasing the number of axes in a cobot typically raises the cost of components like gear reducers and
servo systems, as each additional axis requires dedicated gear mechanisms and motor controls for precise
movement. Similarly, enhancing the payload capacity increases the costs for gear reducers and other
structural components, as it requires stronger materials and more powerful motors to support the heavier
load.
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Cobot prices are influenced by factors such as degrees of freedom, payload, branding and use cases.
Cobots with higher degrees of freedom and greater payloads are typically priced higher, but other factors
can also impact the price. For example, the price for four-axis cobots typically ranges from RMB3,000 to
RMB50,000, while the price for cobots with six or more axes ranges from RMB20,000 to RMB200,000,
primarily due to higher component costs. The pricing for integrated cobots is subject to the complexity of
integration, customization and application. The specific needs of each project also influence the pricing.
As a result, there is no standard pricing range or fixed criteria that generally apply to integrated cobots.
Historical and Projected Trends of
the A verage Price of the Core Components
in China’s Cobot Industry, 2019-2028E
Cost Structure of Cobots’ Core
Components, Using a Six-axis 5kg
Load Cobot as an Example, 2023
RMB in thousands
CAGR 2019-2023 CAGR 2023-2028E
-4.8% -1.5%
-6.9% -4.0%
-6.0% -3.8%
2.6 2.5 2.3 2.3 2.1 2.1 2.1 2.0 2.0 2.0
1.1 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.6
8.2 7.6 7.1 6.7 6.4 6.1 5.8 5.6 5.4 5.3
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Gear reducers
Servo systems
Controllers
0
3
6
9
34%
23%
18%
10%
15%
Servo systems
SensorsControllers
Other partsGear reducers
%
Sources: CRIA, MIR, CIC
COMPETITIVE LANDSCAPE OF THE GLOBAL COBOT INDUSTRY
Manufacturers in the global cobot industry can be largely categorized into two groups. The first
group is manufacturers of traditional industrial robots who have entered the cobot industry leveraging
their experience in traditional industrial robot development. The second group comprises emerging
manufacturers dedicated to the development and commercialization of cobots since their inception.
In addition, the global cobot industry is dominated by market players from a few key countries,
including China, Japan, Germany, the United States, and Denmark, among others. Notably, Chinese
manufacturers have been growing rapidly in recent year, benefiting from a more comprehensive product
matrix and cost advantages.
The global cobot industry is relatively concentrated, with the top five market players accounting for
approximately 46.3% of the market share in 2023 in terms of global cobot shipment volume. Notably,
four of those leading players are Chinese manufacturers, underscoring the significant role that China is
playing in shaping the global market landscape. In 2023, we ranked second among all market players in
the global cobot industry and ranked first among all Chinese cobot companies, each measured by global
cobot shipment volume. We rank seventh in the global cobot industry with a global market share of 3.6%
in terms of global revenue generated from cobots in 2023. Our revenue has grown at a CAGR of 28.3%
between 2021 and 2023, outpacing the industry average.
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Ranking of the Top Market Players in the Global Cobot Industry
The following table sets forth the ranking of the top five market players in the global cobot industry
in terms of global cobot shipment volume in 2023.
Ranking Company Overview Listing
status
1 Universal
Robots(1) 1.6 14.8
2O ur Company 1.4 13.0
3 AUBO
• Established in 2015, headq uartered in Beijin g, China.
It is a high-tech enterprise specializing in the research,
development, production, and sale of cobots.
0.8 7.4
4 Elephant
Robotics 0.7 6.5
5 JAKA 0.5 4.6
Sub-total
Others
Total
5.0
5.8
10.8
46.3
53.7
100.0
• Established in 2005, headq uartered in Denmark. It
launched the world’s first cobot in 2008 and focuses on
the development and commercialization of cobots that
enable automation upgrades in the industrial sector.
Market
share
(%)
Geographical
 coverage of
products
• Established in 2015, headq uartered in Shenzhen, China.
Our Compan y is a compan y that specializes in the
development, manufacturing and commercialization of
cobots.
• Established in 2016, headq uartered in Shenzhen,
China. It foc uses on the de velopment and
manufacturing of cobots as
well as the development of
relevant platform software.
• Established in 2014, headq uartered in Shanghai, China.
It foc uses on the research, de velopment,
manufacturing, and sales of cobots, as well as the
integration of cobot systems.
• Acq uired by a
publicly-listed
company in
the U.S.
• Applied for listin g
 on HKEX
• Not listed
• Not listed
• Applied for listin g
 on SSE STAR
 Market
• China and o ver 50
overseas countries
and regions
• China and o ver 80
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
Global cobots
shipment
volume, 2023
(units in
ten thousands)
Sources: Annual reports, expert interviews, GGII, MIR, CIC
(1) Universal Robots focuses on the development and commercialization of cobots that can be used in a wide range of
industrial production environments. It commercially launched the world’s first cobot in 2008, making it a
well-recognized cobot brand in the industry.
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The following table sets forth the ranking of the top 10 market players in the global cobot industry
in terms of global revenue generated from cobots in 2023. The major market players in the global cobot
industry in terms of global revenue include Universal Robots, FANUC, KUKA, ABB, and AUBO.
Ranking Company Overview Listing status
1 Compan y A
303.8 29.2
2 Compan y B 103.5 10.0
3 Compan y C 55.3 5.3
4 Compan y D 48.4 4.7
5 Compan y E
Company F
40.8 3.9
6 38.9 3.7
7O ur Company 37.9 3.6
8 Compan y G 36.1 3.5
9 Compan y H 32.7 3.1
10 Compan y I 28.0 2.7
Sub -total 725.3 69.8
Others 314.2 30.2
Total 1,039.5 100.0
Global revenue
generated from cobots,
2023 (in US$ million)
Market
share
(%)
• Established in 2005, headq uartered in Denmark. It launched the world’s first cobot
in 2008 and focuses on the development and commercialization of cobots that
enable automation upgrades in the industrial sector.
• Established in Japan in 1976. It foc uses on the field of factory automation and is
one of the world’s largest professional CNC system manufacturers and one of the
top four industrial robot companies globally.
• Established in 2015, headq uartered in Beijing, China. It is a high-tech enterprise
specializing in the research, development, production, and sale of cobots.
• Established in S witzerland in 1988. It is a technology leader in the fields of
electrification and automation and one of the top four industrial robot companies
globally.
• Established in 2015, it is the onl y cobot manufacturer based in Taiwan. It offers
cobots with embedded visual systems, software and application-based solutions to
the market.
• Established in 2015, headq uartered in Shenzhen, China. Our Company is a
company that specializes in the development, manufacturing and
commercialization of cobots.
• Established in 2014, headq uartered in Shanghai, China. It focuses on the research,
development, manufacturing, and sales of cobots, as well as the integration of
cobot systems.
• Established in So uth Korea in 2015. It is dedicated to the production of cobots
using its proprietary technology and stands as a leading company in the South
Korean cobot market.
• Established in Japan in 1915. It is a leadin g industrial robot company in the
Americas. It provides automation products and solutions for virtually every
industry and robotic application, including arc welding, assembly, coating,
dispensing, material handling, material cutting, etc.
• Established in German y in 1898. It is a global supplier of intelligent automation
solutions and one of the top four industrial robot companies globally.
• Acq uired by a
publicly-listed
company in the U.S.
• Listed on J PX
• Not listed
• Appro ved for public
issue
• Applied for listin g on
HKEX
• Applied for listin g on
SSE STAR Market
• Listed on KRX
• Listed on J PX
• Listed on SIX Swiss
Exchange, Stockholm
Stock Exchange, NYSE
• Listed on Frankf urt
Stock Exchange
Sources: Annual reports, expert interviews, CIC
Comparison of the Top Five Market Players in the Global Cobot Industry
As of the Latest Practicable Date, we offered a total of 27 cobot models in four series with payload
capacity ranging from 0.25kg to 20kg, among which 22 were six-axis models and five were four-axis
models, representing one of the most extensive product portfolios in the global cobot industry.
Comparative analysis of product indicators, 2023
Company Axis models of cobots
Payload capacity of six-axis cobots(1)
Our Company √√√√√
Universal
Robots
Four-axis and six-axis
Six-axis
Six-axis
Four-axis and six-axis
Six-axis
× √√√√
AUBO × √√√√
Elephant
Robotics √ ××××
JAKA √ √ √ √ ××
<3kg
3-7kg
(excluding 7kg)
7-12kg
(excluding 12kg)
12-20kg
(excluding 20kg)
20-30kg
(excluding 30kg)
√
√
×
×
×
≥30kg
Sources: Annual reports, expert interviews, CIC
(1) The payload capacity of six axis is chosen for the comparison, as major comparable companies generally offer six-axis
cobots. Cobots can be categorized into light payload (<7kg), medium payload (7-12kg), heavy payload (12-20kg),
super heavy payload (20-30kg) and extra heavy payload (>30kg). Specifically, the light payload cobots for the
commercial sector typically feature a payload capacity of less than 3kg, which are classified as a distinct category. The
selected payload range for the above comparison aligns with the industry classification.
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According to the CIC Report, in the cobot industry, performance standards focus on five key
dimensions: accuracy, stability, reliability, flexibility, and safety. Key technical indicators include repeat
positioning accuracy, absolute positioning accuracy, non-contact detection distance and
payload-to-weight ratio. These performance indicators, as listed by cobot manufacturers in the market,
subtly influence the way end-users evaluate and select cobot products. The smaller the repeat positioning
accuracy value, the higher the precision of the cobot when performing the same task repeatedly.
Similarly, the smaller the absolute positioning accuracy value, the more accurate the cobot can achieve
the desired position when executing tasks. Additionally, the non-contact detection distance reflects the
distance at which the cobot can detect objects without physical contact. The greater the non-contact
detection distance, the higher the reliability and safety of the cobot in human-robot interaction.
Furthermore, a higher payload-to-weight ratio indicates greater safety and flexibility of the cobot.
Our cobots have achieved an absolute positioning accuracy of 0.229 mm and a repeat positioning
accuracy of ±0.02 mm, with each parameter representing a leading standard in the global cobot industry.
At the same time, our proprietary flexible e-skin technology, SafeSkin, allows our cobots to detect
approaching objects 15 cm away while operating a t a 1 m/s safety speed during the human-robot
interaction.
Comparative analysis of technical indicators
(1) , 2023
Company
Repeat positioning
accuracy
(mm)
Absolute positioning
accuracy
(mm)
Non-contact detection
distance
(cm)
Our Company ± 0.02 0.229 15 (2)
Universal Robots ±0.03 ~0.5 /
AUBO ±0.02 ~0.5 /
JAKA ±0.02 ~0.5 /
Payload-to-weight
ratio
0.2
0.2
0.2
0.2
Sources: Annual reports, expert interviews, GGII, MIR, CIC
(1) The above comparison is based on six-axis cobot models with a payload of 5 kg, which are commonly offered by major
comparable companies as a mainstream model in the market. Elephant Robotics only offers cobots of a payload up to
2kg and is therefore not included in the comparison.
(2) This is primarily achieved through our propriety flexible e-skin technology. Such e-skin technology is a non-contact
collision prevention technology achieved by the working principle of capacitive proximity sensors, which enable
cobots to detect approaching objects while operating at a safety speed during the human-robot interaction. This
technology allows cobots to respond rapidly to approaching objects by either ceasing movement or taking evasive
action to effectively prevent the imminent collisions.
Key Success Factors of the Global Cobot Industry
• Leading research and development strength and technology. Experienced research and
development teams are adept at identifying and leveraging cutting-edge technology trends. An
innovative research and development team, coupled with advanced technologies and
know-how of the application scenarios, facilitates the development of new products, enhances
product competitiveness, and influences market trends.
• Product diversification for various use cases. An extensive product matrix enhances a
company's ability to adapt its cobots to various end-user use cases, meet personalized customer
needs, and increase market share and industry influence.
• High cost-performance ratio. Companies must ensure product excellence while controlling
costs in order to offer competitive pricing for customers. A high cost-performance ratio
reflects a cobot company’s comprehensive strengths in research and development, production,
and supply chain management.
• Strong channel expansion capabilities. Effective channel expansion capabilities enable
companies to swiftly respond to market changes, establish extensive sales and service
networks, and build strong relationships with local distributors and integrators, which is
crucial for market penetration and brand promotion.
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Entry Barriers to the Global Cobot Industry
• Research and development investment costs. Developing cobots requires significant
investment in research and development, as well as substantial financial resources. The
emergence of 5G communication and AI technologies is driving cobots into niche applications
and enhancing their perceptive capabilities. This means manufacturers must invest heavily in
technological advancements to develop new products and improve existing ones, ensuring they
maintain market leadership.
• Technological accumulation. The cobot industry is characterized by high technological
barriers that require extensive experience and accumulated knowledge. Established
manufacturers benefit from years of technological development in core components like gear
reducers, servo systems, and controllers, creating significant entry barriers for new players.
Without this deep industry knowledge, new entrants struggle to produce competitive products
and align them with specific market needs.
• Talent requirements. Success in the cobot industry demands a diverse talent pool with expertise
in mechanics, electronics, control systems, and algorithms. Leading companies have already
built robust research and development teams and talent pipelines. In contrast, newcomers must
invest heavily in attracting and developing skilled professionals to build an effective
workforce.
• Scenarios know-how. Cobot companies rely on a wealth of project experience and client case
studies to thrive. This experience helps companies understand customer requirements and
refine product designs to fit the end user’s scenario. New entrants, lacking practical project
experience and industry insights, face significant challenges in establishing themselves in the
market.
COMPETITIVE LANDSCAPE OF THE GLOBAL COBOT INTEGRATOR INDUSTRY
The global cobot integrator market is highly fragmented, dominated by numerous small to
medium-sized integrators with industry-specific and regional experiences. It is estimated that there are
over 50 thousand cobot integrators globally. Cobot integrators generally operate in small scale, primarily
due to their focuses on certain integration fields for cobots to perform specific tasks, such as welding,
material handling and palletizing. Cobot integrators rely on their specific integration expertise and
business relationships with downstream customers, which, to certain extent, limit their expansion to large
scale operations. As a result, the global cobot integrator market remains dispersed with no clear
competitive hierarchies.
SOURCE AND RELIABILITY OF INFORMATION
We commissioned CIC, a market research and consulting company founded in Hong Kong and
engaged in the provision of professional consulting services across multiple industries, to conduct an
analysis and report of the global and China’s cobot markets. We have agreed to pay a fee of RMB0.4
million to CIC in connection with the preparation of the CIC Report. We have extracted certain
information from the CIC Report in this section, as well as the “Summary,” “Risk Factors,” “Business,”
and “Financial Information” sections, and elsewhere in this prospectus to provide our potential investors
with a more comprehensive presentation of the industries where we operate. Unless otherwise noted, all
data and forecasts contained in this section derive from the CIC Report.
The information and data collected by CIC have been analyzed, assessed, and validated using CIC’s
in-house analysis models and techniques. Primary research was conducted via interviews with key
industry experts and leading industry participants. Secondary research involved analyzing data from
various publicly available data sources, such as the National Bureau of Statistics of PRC and various
industry associations. The information and data collected by CIC have been analyzed, assessed, and
validated using CIC’s in-house analysis models and techniques.
The market projections in the CIC Report are based on the following key assumptions: (1) the
overall social, economic, and political environment in China is expected to remain stable during the
forecast period; (2) related key industry drivers are likely to continue driving growth in the robot market
during the forecast period, such as the advancement of technology and infrastructure, supportive policies,
and increasing downstream demands; and (3) there will be no extreme force majeure or unforeseen
industry regulations in which the market may be affected in either a dramatic or fundamental way during
the forecast period.
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This section sets out a summary of certain aspects of the laws and regulations which are
relevant to the business and operations of our Group. The principal objective of this summary is to
provide potential investors with an overview of the key laws and regulations applicable to us. This
summary does not purport to be a comprehensive description of all the laws and regulations
applicable to our business and operations and/or which may be important to potential investors.
Investors should note that the following summary is based on laws and regulations in force as at the
date of this prospectus, which may be subject to change.
PRC LA WS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of the PRC, which are
relevant to the business and operations of our Group.
Laws and Regulations in Relation to Product Quality
The Product Quality Law of the People’s Republic of China (جthe
“Product Quality Law”) promulgated by the Standing Committee of the National People’s Congress (the
“SCNPC”) on February 22, 1993, which was last amended and became effective on December 29, 2018,
is the principal governing law related to the supervision and administration of product quality. According
to the Product Quality Law, manufacturers shall be liable for the quality of products they produce, and
sellers shall take measures to ensure the quality of the products they sell. A manufacturer shall be liable
to compensate for any physical injuries or damage to property other than the defective product itself
resulting from the defects in the product unless the manufacturer can prove that: (1) the product has not
been put into circulation; (2) the defects causing injuries or damage did not exist at the time when the
product was put into circulation; or (3) the science and technology at the time when the product was put
into circulation were at a level incapable of detecting the existence of the defect. A seller shall be liable
to compensate for any physical injuries or damage to the property of others caused by the defects in the
product. Where a product is defective due to a mistake made by the seller and such defect causes physical
injury or damage to the property of others, the seller shall bear liability for compensation. Where a seller
cannot specify the producer of a defective product nor the supplier of such defective product, the seller
shall be liable for compensation. Where a defect in a product causes physical injuries to others or
damages to the property of others, the victim may claim compensation from the producer of the product
or the seller of the product.
Pursuant to the Civil Code of the People’s Republic of China (Պ ) promulgated
by the National People’s Congress (the “NPC”) on May 28, 2020 and effective on January 1, 2021, in the
event of damages caused to other parties due to the defects in a product, the infringed party may seek
compensation from the manufacturer or the seller of such product and shall have the right to request the
manufacturer and the seller to bear tortious liabilities, such as cessation of infringement, removal of
obstruction, elimination of danger, etc.
The Law of the PRC on the Protection of the Rights and Interests of Consumers ( ʕശɛ͏΍ձ਷ऊ൬
جwhich was promulgated by the SCNPC on October 31, 1993, last amended on October 25,
2013 and became effective on March 15, 2014, was aimed at protecting consumers’ rights when they
purchase or use goods and accept services. All business operators must comply with this law when they
manufacture or sell goods or provide services to customers. Under the amendments made on October 25,
2013, all business operators must pay high attention to protecting customers’ privacy and must strictly keep
confidential any personal information of consumers obtained during their business operations.
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The Regulations on the Implementation of the Law on the Protection of Consumer Rights and
Interests of the People’s Republic of China (ૢԷ )w a s
promulgated by the State Council of the People’s Republic of China (the “State Council”) on March 15,
2024 and implemented on July 1, 2024 (the “Regulations on the Implementation of the Law on the
Protection of Consumer Rights and Interests”). The Regulations on the Implementation of the Law on the
Protection of Consumer Rights and Interests mainly refine and supplement the obligations of operators
and improve the relevant provisions on online consumption, strengthen the obligations of prepaid
consumer operators, regulate the behavior of consumer claims and clarify the responsibilities of the
government for the protection of consumer rights and interests.
Laws and Regulations in Relation to the Industry
According to the Administrative Regulations for Compulsory Product Certification (Ⴉ
֛which was promulgated by the former General Administration of Quality Supervision,
Inspection and Quarantine of the PRC (which merged into the State Administration of Market Regulation
(the “SAMR”)) on July 3, 2009, amended on September 29, 2022 and became effective on November 1,
2022, products specified by the state shall not be delivered, sold, imported or used in other business
activities until they have been certified (the “Compulsory Product Certification”) and labeled with China
Compulsory Certification ( ʕ਷੶ՓႩᗇ ) mark. For products subject to Compulsory Product
Certification, the state implements unified product catalogs (the “3C Catalog”), unified compulsory
requirements, standards and compliance assessment procedures in technical specification, unified
certification marks and unified charging standards.
Pursuant to the Tendering and Bidding Law of the People’s Republic of China
(جthe “Tendering and Bidding Law”) promulgated by the SCNPC on August
30, 1999, revised on December 27, 2017 and effective from December 28, 2017, tenderers shall not
collude with each other in setting bidding prices, nor shall they exclude other tenderers from fair
competition and harm the lawful rights and interests of the tenderee and other tenderers. Tenderers shall
not participate in the bidding competition by offering a price lower than the cost, nor shall they attempt to
win the bid in the name of other persons or through other fraudulent means.
According to the Implementation Regulations for the Law of the People’s Republic of China on
Tenders and Bids (ૢԷ ), which was promulgated on December 20,
2011, last amended on March 2, 2019 and became effective on the same day, where the tender invitation
and bidding activities of a project required by law to call for tenders violate the provisions of the
Tendering and Bidding Law and such regulations, and have a substantive influence on the outcome of
award of tender, if it is impossible to adopt remedial measures to rectify the tender invitations, the
bidding and award of tender shall be void, and the tender exercise or bid evaluation shall be organized
anew pursuant to the law.
According to the Law of the PRC on Government Procurement (جthe
“Procurement Law”) promulgated by the SCNPC on June 29, 2002 and last amended and implemented on
August 31, 2014, the government procurement methods include public tender invitation, bidding
invitation, competitive negotiation, single-source procurement, inquiry about quotations and other
methods confirmed by the department for supervision over government procurement under the State
Council. Public tender invitation is the principal method of government procurement, and the term
“government procurement” means the use of fiscal funds by all levels of state authorities, institutions and
social organizations to procure goods, projects and services that fall within the catalog for centralized
procurement formulated in accordance with the law or that are above the procurement limits. Pursuant to
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Article 73 of the Procurement Law, if any unlawful act made pursuant to Article 71 results in or may
result in the supplier winning the bid, the procurement contract shall be canceled if it has not been
performed.
Laws and Regulations in Relation to Intellectual Property
Trademarks
The Trademark Law of the People’s Republic of China (جthe “Trademark
Law”) was promulgated by the SCNPC on August 23, 1982 and became effective on March 1, 1983, and was
last amended on April 23, 2019 and came into effect from November 1, 2019. The Implementation Rules of
the Trademark Law of the People’s Republic of China (ૢԷ ) was promulgated
by the State Council on August 3, 2002 and came into effect on September 15, 2002, and was last amended on
April 29, 2014 and became effective from May 1, 2014. The Trademark Law and its implementation rules
provide the basic legal framework for regulating trademarks in the PRC. According to relevant laws and
regulations, registered trademarks include commodity trademarks, service trademarks, collective marks and
certification marks. Registered trademarks are protected under the Trademark Law and related rules and
regulations. If a trademark applied for registration does not comply with relevant regulations or is identical or
similar to the trademark already registered or preliminarily approved by others on the same or similar goods,
the Trademark Office shall reject the application. The validity period of a registered trademark is 10 years,
calculated from the date of approval for registration approval.
Patents
Pursuant to the Patent Law of the People’s Republic of China (ج)
promulgated by the SCNPC on March 12, 1984, last amended on October 17, 2020, and effective from
June 1, 2021, and the Implementation Rules of the Patent Law of the People’s Republic of China
(ۆpromulgated by the State Council on June 15, 2001, last amended on
December 11, 2023 and effective from January 20, 2024, there are three types of patents, namely,
invention, utility model and design. Invention patents are valid for 20 years, design patents are valid for
15 years and utility model patents are valid for 10 years from the date of application. The PRC patent
system adopts a “first come, first file” principle, which means that where more than two persons file a
patent application for the same invention, a patent will be granted to the person who applies first.
Inventions and utility model patents must meet three criteria: novelty, inventiveness and practicability.
Unless otherwise stipulated by relevant laws and regulations, a third party must obtain consent or a
proper license from the owner to use the patent. Otherwise, the use constitutes an infringement of the
patent rights.
Copyright and software copyright
Pursuant to the Copyright Law of the People’s Republic of China (ج)
promulgated by the SCNPC on September 7, 1990, last amended on November 11, 2020 and effective
from June 1, 2021, and the Implementing Rules of the Copyright Law of the People’s Republic of China
(ૢԷ ) promulgated by the State Council on August 2, 2002, last amended
on January 30, 2013 and effective from March 1, 2013, Chinese citizens, legal persons or other
organizations enjoy copyright protection over their works, whether published or not, in the domain of
literature, art and science.
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In addition, internet activities, products disseminated over the internet, and software products also
enjoy copyright. Pursuant to the Regulation on Protection of Computer Software (ᚐૢԷ )
promulgated by the State Council on June 4, 1991, effective on November 1, 1991, last amended on
January 30, 2013 and implemented on March 1, 2013, the software registration authority shall grant
certificates of registration to computer software copyright applicants in compliance with the Regulation
on Protection of Computer Software.
Domain names
Pursuant to the Administrative Measures on Internet Domain Names (ج)
promulgated by the Ministry of Industry and Information Technology of the PRC (the “MIIT”) on August
24, 2017 and effective from November 1, 2017, and the Implementation Rules for the Registration of
National Top-level Domain Names (ۆpromulgated by China Internet
Network Information Center and effective on June 18, 2019, the MIIT is in charge of the administration
of PRC internet domain names. Domain owners need to register their domain names. The domain name
services follow a “first come, first file” principle. The applicants will become the holders of such domain
names upon the completion of the registration procedure.
Laws and Regulations in Relation to Labor Protection, Social Insurance and Housing Provident
Funds
Labor security
Under the Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗΥ
جthe “Labor Contract Law”) promulgated on June 29, 2007, effective on January 1, 2008, and last
amended on December 28, 2012 and effective on July 1, 2013, labor contracts must be concluded in
writing if labor relationships are to be or have been established between enterprises, individual economic
organizations, private non-enterprise entities, etc. and the employees. Employers are forbidden to force
employees to work overtime or to do so in a disguised manner and employers must pay employees
overtime wages in accordance with the regulations of the state. In addition, wages may not be lower than
local standards on minimum wages and must be paid to the employees timely. According to the Labor
Law of the People’s Republic of China (جpromulgated by SCNPC on July 5,
1994, effective on January 1, 1995 and last amended and implemented on December 29, 2018, employers
shall establish and improve a system of labor safety and sanitation and shall strictly abide by national
rules and standards on labor safety and sanitation as well as educate employees on labor safety and
sanitation so as to prevent accidents during work and reduce occupational hazards. Labor safety and
sanitation facilities shall comply with national standards. The employers must also provide employees
with labor safety and sanitation conditions that comply with national standards and necessary articles for
labor protection.
According to the Provisional Regulations on Labor Dispatch (֛promulgated by
the Ministry of Human Resources and Social Security on January 24, 2014 and effective on March 1,
2014, employers can only use dispatched workers in temporary, auxiliary or alternative jobs. The
employer shall strictly control the number of dispatched workers, which shall not exceed 10% of total
number of workers. In addition, according to the Labor Contract Law, employers that violate the
provisions on labor dispatch shall be ordered by the labor administrative department to make corrections
within a time limit. If the correction is not made within the time limit, a fine of not less than RMB5,000
but not more than RMB10,000 per person shall be imposed.
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Social insurance and housing provident fund
According to the Social Insurance Law of the People’s Republic of China (ڭ
جpassed by the SCNPC on October 28, 2010, effective on July 1, 2011 and amended and
implemented on December 29, 2018, each employer and individual in the PRC shall make social
insurance fund, including basic pension insurance, basic medical insurance, work injury insurance,
unemployment insurance and maternity insurance. An employer who fails to make adequate contributions
to social insurance fund shall be ordered to pay or supplement within a stipulated period, and shall be
subject to a late fee computed from the date of default at the rate of 0.05% per day. Where payment is not
made within the stipulated period, the relevant administrative authorities shall impose a fine ranging from
one to three times of the overdue amount.
According to the Administrative Regulations on the Housing Provident Fund (၍ଣૢԷ )
passed by the State Council on April 3, 1999, last amended and implemented on March 24, 2019, each
employer and individual in the PRC shall make housing provident fund. Where, in violation of the
provisions of the regulations, an employer is overdue in the contribution of, or underpays, the housing
provident fund, the competent PRC government authority shall order it to make the housing provident
fund within a stipulated period. If the payment is not made within such stipulated period, an application
may be made to the People’s Court for compulsory enforcement.
Regulations on Work Safety
According to the Work Safety Law of the People’s Republic of China (ج)
promulgated by the SCNPC on June 29, 2002, revised on June 10, 2021 and effective on September 1,
2021, production and business operation entities must formulate safety production objectives and
measures, improve the working environment and conditions of workers in a planned and step-by-step
manner, establish a safety production guarantee system and implement a safety production post
responsibility system. In addition, production and business operation entities must arrange safety
production training and provide employees with personal protective equipment that meets national or
industry standards. In addition, the production and business operation entities shall report the major
hazard sources and related safety measures and emergency measures to the emergency management
department and other relevant departments for the record, and formulate a safety risk rating control
system and take corresponding control measures.
Laws and Regulations in Relation to Foreign Exchange
According to the Regulations of the People’s Republic of China on Foreign Exchange
Administration ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ ) (the “Foreign Exchange Regulations”) promulgated by
the State Council on January 29, 1996, effective on April 1, 1996, and last amended and effective on
August 5, 2008, international payments in foreign currencies and transfers of foreign currencies under
current account in PRC shall not be subject to any restriction. Foreign currency transactions under the
capital account, such as direct investment and capital contribution, are still restricted and require
approvals from, or registration with, the foreign exchange administrative authorities.
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According to the Circular of the State Administration of Foreign Exchange on Issues concerning the
Administration of Foreign Exchange Involved in Overseas Listing (ྤ̮ɪ̹̮ි
ٝannounced by SAFE on February 1, 2005, effective on March 1, 2005 and
amended and implemented on December 26, 2014, SAFE and its branch offices and administrative offices
shall oversee, regulate and inspect domestic companies regarding their business registration, opening and
use of accounts, trans-border payments and receipts, exchange of funds and other conduct involved in
overseas listing. The domestic company shall, within 15 working days upon the end of its overseas public
offering, handle registration formalities for overseas listing with the foreign exchange authority at its
place of registration with the required materials.
According to the Circular of the State Administration of Foreign Exchange on Reforming and
Regulating Policies for the Administration over Foreign Exchange Settlement of Capital
Accounts (ٝannounced by SAFE and
effective on June 9, 2016, and the Notice of the State Administration of Foreign Exchange on Further
Deepening Reform to Promote Cross-border Trade and Investment Facilitation (ආ
ٝannounced and effective on December 4, 2023, the
foreign exchange receipts under capital accounts of domestic institutions are subject to discretionary
settlement policies. The foreign exchange receipts under capital accounts (including foreign exchange
capital, foreign debts, and repatriated funds raised through overseas listing) subject to discretionary
settlement as expressly prescribed in the relevant policies may be settled with banks according to the
actual need of the domestic institutions for business operation. Domestic institutions may, at their
discretion, settle up to 100% of foreign exchange receipts under capital accounts for the time being.
SAFE may adjust the above proportion in due time according to the balance of payments. While eligible
for the discretionary settlement of foreign exchange receipts under capital accounts, domestic institutions
may also opt to use their foreign exchange receipts according to the payment-based settlement system. A
bank shall, in handling each transaction of foreign exchange settlement for a domestic institution
according to the principle of payment-based settlement, review the authenticity and compliance of the use
of the funds settled in the previous foreign exchange settlement (including discretionary settlement and
payment-based settlement) of such domestic institution. Domestic institutions’ foreign exchange receipts
under the capital account and the Renminbi funds obtained from the settlement thereof shall not, directly
or indirectly, be used for expenditure beyond the enterprise’s business scope or expenditure prohibited by
laws and regulations of the state. Unless otherwise specified, the funds shall not, directly or indirectly, be
used for investments in securities or other investments or wealth management other than banks’
principal-secured products. The funds shall not be used for the granting of loans to non-affiliated
enterprises, except where it is expressly permitted in the business scope. The funds shall not be used for
the construction or purchase of real estate for purposes other than self-use (except for real estate
enterprises).
According to the Circular on Optimizing Administration of Foreign Exchange to Support the
Development of Foreign-related Business by the State Administration of Foreign Exchange (̮ි၍
ٝissued by SAFE on April 10, 2020, eligible
enterprises are allowed to make domestic payments by using receipts under capital accounts, such as their
capital funds, foreign credits and the income from overseas listing, with no need to provide the
evidentiary materials concerning authenticity on a transaction-by-transaction basis to banks in advance,
provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing
administrative regulations on the use of receipts under capital accounts. Local foreign exchange
authorities shall strengthen monitoring analysis and interim and post regulation.
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Laws and Regulations in Relation to Taxation
PRC Enterprise Income Tax Law
According to the EIT Law promulgated on March 16, 2007, effective on January 1, 2008 and last
amended and implemented on December 29, 2018, and the Implementing Rules of the Enterprise Income Tax
Law of the People’s Republic of China (ૢԷ ) (the “Implementing Rules
of the Enterprise Income Tax Law”) promulgated on December 6, 2007, effective on January 1, 2008 and last
amended and implemented on April 23, 2019, enterprise income taxpayers shall include resident and
non-resident enterprises. Resident enterprise refers to an enterprise established within China or is established
under the law of a foreign country (region) but whose actual institution of management is within China.
Non-resident enterprise refers to an enterprise established under the law of a foreign country (region), whose
actual institution of management is not within China but has offices or establishments within China, or which
does not have any offices or establishments within China but has incomes sourced from China. The rate of
enterprise income tax shall be 25%. Qualified small low-profit enterprises are given the reduced enterprise
income tax rate of 20%.
According to the Administrative Measures for Accreditation of High-tech Enterprises ( ৷อҦஔΆ
جjointly promulgated by Ministry of Science and Technology, Ministry of Finance and
the SAT on April 14, 2008, amended on January 29, 2016 and effective on January 1, 2016, enterprises
which recognized as high-tech enterprises are entitled to enjoy the preferential enterprise income tax rate
of 15%. The validity period of the high-tech enterprise qualification shall be three years from the date of
issuance of the certificate of high-tech enterprise. After the certificate expires, the enterprise can re-apply
for such recognition as a high-tech enterprise.
V alue-added tax
According to the Interim Value-Added Tax Regulations of the People’s Republic of China ( ʕശɛ͏
೼ᅲБૢԷ ), as announced by the State Council on December 13, 1993 and last amended and
effective on November 19, 2017, entities and individuals selling goods, providing labor services of
processing, repairing or maintenance, selling services, intangible assets and real property in China, and
importing goods to China, shall be identified as taxpayers of value-added tax. Unless otherwise provided
by laws, the value-added tax rate is 17% for taxpayers selling goods, labor services, or tangible movable
property leasing services or importing goods; 11% for taxpayers selling transportation, postal, basic
telecommunication, construction, immovable property or immovable property leasing services,
transferring the land use rights, or selling or importing specific goods; 6% for taxpayers selling services
or intangible assets; 0% for domestic entities and individuals selling services or intangible assets within
the scope prescribed by the State Council across national borders; and 0% for exported goods, except as
otherwise specified by the State Council.
Pursuant to the Circular on Comprehensively Promoting the Pilot Program of the Collection of
Value-added Tax in Lieu of Business Tax (೼༊ᓃ
ٝpromulgated by the Ministry of Finance and the SAT on March 23, 2016, the pilot program of
replacing business tax with value-added tax nationwide should be comprehensively promoted. All
taxpayers of business tax engaged in the construction industry, real estate industry, financial industry and
life service industry should be included in the pilot scope with regard to payment of value-added tax
instead of business tax.
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According to the Circular on Policies for Simplifying and Consolidating Value-added Tax
Rates (ٝannounced by the Ministry of
Finance and the SAT on April 28, 2017, the structure of value-added tax rates will be simplified and
consolidated from July 1, 2017, and the 13% value-added tax rate shall be canceled. The scope of goods
with 11% value-added tax rate and the provisions for deducting input tax are specified.
According to the Circular on Adjusting Value-added Tax Rates (ሜ዆ᄣ
ٝannounced by the Ministry of Finance and the SAT on April 4, 2018, from May 1, 2018,
where a taxpayer engages in a value-added tax taxable sales activity or imports goods, the previous
applicable 17% and 11% tax rates are adjusted to be 16% and 10%, respectively.
According to the Announcement of the Ministry of Finance, the SAT and the General Administration
of Customs on Relevant Policies for Deepening Value-Added Tax Reform (݁
ʮѓ ) promulgated on March 20, 2019, with respect to value-added tax taxable sales or imported
goods of a value-added tax general taxpayer, the originally applicable value-added tax rate of 16% shall
be adjusted to 13%, and the originally applicable value-added tax rate of 10% shall be adjusted to 9%.
According to the Announcement on Further Enhancing the Implementation of the End-of-Period
Value-Added Tax Refund Policy (ʮѓ ) issued by
the Ministry of Finance and the SAT on March 21, 2022, eligible enterprises in manufacturing and other
industries may apply to the competent tax authorities for the refund of the remaining recoverable
value-added tax from the tax declaration period in April 2022. Taxpayers who have benefited from the
value-added tax refund policy of “immediate refund upon collection” ( уᅄуৗ) and “levy and refund
later” (ৗ) since April 2019 may apply for end-of-period value-added tax refund, provided
that, taxpayers shall apply after returning all the value-added tax refunds enjoyed since April 2019 to
relevant tax authorities before October 31, 2022 in one go.
Transfer pricing
Pursuant to the EIT Law, the business transactions between enterprises and their affiliates that
reduce the taxable income or income of such enterprises and their affiliates are not in compliance with the
arm’s length principle, the taxation authority has the right to make an adjustment with reasonable
methods. Where enterprises submit to the tax authority the annual enterprise income tax return, they shall
enclose a statement of the annual business transactions in respect of the business transactions of the
enterprises and their affiliates. If an enterprise fails to provide the information of business transactions
with their affiliates, or provides false or incomplete information, which cannot faithfully reflect their
affiliated business transactions. The tax authority has the right to verify its taxable income legally, if it is
necessary to pay additional taxes, the additional taxes and interest in accordance with the regulations of
the State Council should be collected. In addition, in accordance with the Implementing Rules of the
Enterprise Income Tax Law, the business transactions between the enterprise and its affiliates do not
conform to the principle of independent transactions, or the enterprise arrangements that do not have
reasonable commercial purposes, the taxation authorities shall have the right to make the aforesaid tax
adjustment within 10 years as from the tax year when such transactions are happened.
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According to the Administrative Measures for Special Tax Audits and Adjustments and the Mutual
Agreement Procedure (جpromulgated by the SAT on March
17, 2017 and effective on May 1, 2017, tax authorities shall carry out special tax adjustments-focused
monitoring and administration of enterprises, and may issue a notice of tax matters to enterprises found
with any special tax adjustment risks to prompt their existing tax risks. Enterprises can also make a
self-adjustment and pay the underpaid tax, and the tax authorities can still perform special tax audits and
adjustments thereafter. Tax authorities shall initiate the special tax audit procedure upon request by an
enterprise for confirmation of its tax position on special tax adjustment items, such as the pricing
principle or method adopted for related-party transactions.
Pursuant to the Administration of Tax Collection Law of the PRC ( ʕശɛ͏΍ձ਷೼ϗᅄϗ၍ଣ
جpromulgated by the SCNPC on September 4, 1992 and last amended and implemented on April 24,
2015, if a taxpayer fails to pay taxes or a withholding agent fails to remit taxes within the time limit in
accordance with the provisions, in addition to ordering the payment within a time limit, the relevant tax
authorities may impose a fine on a daily basis at the rate of 0.05% of the amount of tax in arrears. Where
a taxpayer fails to file a tax return or fails to pay or underpays the tax due, the tax authorities may impose
a fine not less than 50% of and not more than five times the amount of taxes unpaid or underpaid.
Criminal liability shall be pursued in accordance with the law if a crime is constituted.
Taxation on dividends
According to the Individual Income Tax Law promulgated on September 10, 1980, last amended on
August 31, 2018 and effective on January 1, 2019, and the Regulations for the Implementation of the
Individual Income Tax Law of the People’s Republic of China (ૢԷ )
(the “Implementing Rules of the Individual Income Tax Law”) last amended on December 18, 2018 and
effective on January 1, 2019, income from interest, dividends, bonuses, property leasing, property transfer
and incidental income shall be subject to a proportional tax rate of 20%. In addition, according to the Notice
on Issues Concerning Differentiated Individual Income Tax Policies for Dividends and Bonuses of Listed
Companies (ٝissued on September 7, 2015
by the Ministry of Finance, the SAT and the CSRC, where an individual acquires stocks of a listed company
from public offering of the company or from the stock transfer market and holds the stocks for more than one
year, the income from dividends is exempted from individual income tax. If the individual holds the stocks
for one month or less, the income from dividends is fully taxable. If the individual holds the stocks for one
month to one year (one year inclusive), 50% of the income from dividends is taxable. The aforesaid income
is subject to an individual income tax at a flat rate of 20%.
In accordance with the EIT Law and the Implementation Rules for the Enterprise Income Tax Law,
the rate of enterprise income tax shall be 25%. A non-resident enterprise income tax should be levied at
a reduced rate of 10% on income originating from within China if such non-resident enterprise does not
have an establishment or premise in the PRC or has an establishment or premise in the PRC but the
PRC-sourced income is not connected to such establishment or premise in the PRC. Such withholding tax
for non-resident enterprises are deducted at source and the payer shall be the withholding agent. The tax
shall be withheld by the withholding agent from the amount paid or due for each payment.
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The Circular of the State Administration of Taxation on Issues Relating to the Withholding of
Enterprise Income Tax on Dividends Paid by Chinese Resident Enterprises to H Share Shareholders of
Overseas Non-Resident Enterprise (͏ΆุΣྤ̮ Hٰ
ٝwhich was issued by the SAT on November 6, 2008, further
clarified that a PRC-resident enterprise unified withhold enterprise income tax at a rate of 10% on
dividends paid to H Share shareholders of overseas non-resident enterprise for 2008 and subsequent
years. After receiving dividends, the shareholder of a non-resident enterprise may apply to the competent
tax authority for the treatment under the tax treaty (arrangement), and after the examination and
verification by the competent tax authority, shall refund the balance between the tax paid and the tax
payable calculated according to the tax rate stipulated in the tax treaty (arrangement). In addition, the
Response to Issues on Levying Enterprise Income Tax on Dividends Received by Non-resident Enterprise
from Holding Stock such as B-shares (͏Άุ՟੻ B੻
ҭᔧ ), which was issued by the SAT on July 24, 2009, further provides that any PRC-resident
enterprise that is listed on overseas stock exchanges must withhold enterprise income tax at a rate of 10%
on dividends of 2008 and onwards that it distributes to non-resident enterprises. Such tax rates may be
further modified pursuant to the tax treaty or agreement that China has concluded with a relevant
jurisdiction, where applicable.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion (τર ) signed on August 21,
2006, the PRC government may levy taxes on the dividends paid by a Chinese company to Hong Kong
residents (including natural persons and legal entities) in an amount not exceeding 10% of total dividends
payable by the Chinese company. If a Hong Kong resident directly holds 25% or more of the equity
interest in a Chinese company, then such tax shall not exceed 5% of the total dividends payable by the
Chinese company. The Fifth Protocol of the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion issued by the State Administration of Taxation (ਜᗫ
ࣣ֛effective on December 6, 2019 states that
such provisions shall not apply to those arrangements or transactions, of which the main purpose includes
gaining such tax benefit. The application of the dividend clause of tax agreements must comply with the
Notice of the State Administration of Taxation on the Issues Concerning the Application of the Dividend
Clauses of Tax Agreements (ٝand other
Chinese tax laws and regulations.
Pursuant to Circular on Questions Concerning the Collection of Individual Income Tax Following
the Repeal of Guo Shui Fa [1993] No. 045 (਷೼೯ [1993] 045੻೼ᅄ၍ਪ
ٝissued by the SAT on June 28, 2011, for domestic non-foreign-invested enterprises issuing
shares in Hong Kong, its overseas individual shareholders may enjoy relevant preferential tax treatment
in accordance with the tax treaties between the PRC and its country of residence, and the tax treaties
between the PRC and Hong Kong (or Macao). Domestic non-foreign-invested enterprises that issue
shares in Hong Kong generally are subject to withhold personal income tax at 10% of dividends and
profits without application. If the individual receiving dividends is a resident of an treaties country with
a tax rate of less than 10%, the withholding agent shall apply on their behalf for the relevant preferential
treatment in accordance with the provisions and upon approval by the competent tax authority,
over-withheld taxes will be refunded. If the individual is a resident of an treaties country with a tax rate
higher than 10% but lower than 20%, the withholding agent shall withhold personal income tax at the
treaties effective rate when paying dividends and bonuses, and no application is required in such cases. If
the individual receiving dividends is a resident of a country without a tax treaties with the PRC or other
circumstances exist, the withholding agent shall withhold personal income tax at the rate of 20% when
paying dividends.
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Tax treaties
Non-PRC resident investors residing in countries which have entered into treaties for the avoidance
of double taxation with the PRC are entitled to a reduction of the withholding taxes imposed on the
dividends received from PRC companies. The PRC currently has entered into Avoidance of Double
Taxation Treaties/Arrangements with a number of countries and regions including Hong Kong Special
Administrative Region, Macau Special Administrative Region, Australia, Canada, France, Germany,
Japan, Malaysia, the Netherlands, Singapore, the United Kingdom and the United States.
Income tax
According to the Individual Income Tax Law and its Implementing Rules of the Individual Income
Tax Law, gains realized on the sale of equity interests in the PRC-resident enterprises are subject to the
individual income tax at a rate of 20%. Pursuant to the Circular of the Ministry of Finance and the State
Administration of Taxation on Declaring that Individual Income Tax Continues to be Exempted over
Income of Individuals from Transfer of Shares (੻ᘱᚃᅲ
ٝissued on March 30, 1998, as of January 1, 1997, income of individuals from
the transfer of shares of listed enterprises shall continue to be exempted from individual income tax. On
December 31, 2009, the Ministry of Finance, the SAT and the CSRC jointly issued the Circular on
Relevant Issues Concerning the Collection of Individual Income Tax over the Income Received by
Individuals from Transfer of Listed Shares Subject to Sales Limitation (הٰ
ٝwhich states that individuals’ income from transferring at
Shanghai Stock Exchange or Shenzhen Stock Exchange (the “SZSE”) the shares of a listed company
acquired from the public offerings of the company or from the transfer market shall continuously be
exempted from the individual income tax, except for the relevant shares which are subject to sales
restriction as defined in the Supplementary Circular on Relevant Issues Concerning the Collection of
Individual Income Tax over the Income Received by Individuals from Transfer of Listed Shares Subject
to Sales Limitation (ٝjointly
issued by the three aforementioned authorities on November 10, 2010.
Stamp duty
Pursuant to the Stamp Tax Law of the People’s Republic of China (ج)
effective as of July 1, 2022, PRC stamp duty only applies on specific proof executed or received within
the PRC and with legally binding force in the PRC, thus the requirements of the stamp duty imposed on
the transfer of shares of PRC listed companies shall not apply to the acquisition and disposal of H shares
by non-PRC investors outside of the PRC.
Laws and Regulations in Relation to Environmental Protection and Fire
Environment protection
The Environmental Protection Law of the PRC (جwhich was
promulgated by the SCNPC on December 26, 1989, effective on the same day and last amended on April
24, 2014 and effective on January 1, 2015, outlines the authorities and duties of environmental protection
regulatory agencies. The Ministry of Environmental Protection under the State Council is authorized to
issue national standards for environmental quality and discharge of pollutants, and to exercise unified
supervision and administration over environmental protection scheme of the PRC. Meanwhile, local
environment protection authorities may formulate local standards for discharge of pollutants which are
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more rigorous than the national standards, in which case, the concerned enterprises must comply with
both the national standards and the local standards.
Environmental impact appraisal
According to the Administration Rules on Environmental Protection of Construction Projects
(ᚐ၍ଣૢԷ ), which was promulgated by the State Council on November 29, 1998, last
amended on July 16, 2017 and became effective on October 1, 2017, depending on the impact of the
construction project on the environment, a construction employer shall submit an environmental impact
report or an environmental impact statement, or file a registration form. As to a construction project, for
which an environmental impact report or the environmental impact statement is required, the construction
employer shall, before the commencement of construction, submit the environmental impact report or the
environmental impact statement to the relevant authority at the environmental protection administrative
department for approval. If the environmental impact assessment documents of the construction project
have not been examined or approved upon examination by the approval authority in accordance with the
law, the construction employer shall not commence the construction.
According to the Environmental Impact Appraisal Law of PRC ( ʕശɛ͏΍ձ਷ᐑྤᅂᚤ൙ᄆ
جwhich was promulgated by the SCNPC on October 28, 2002 and last amended and implemented on
December 29, 2018, for any construction projects that have an impact on the environment, the
construction employer is required to prepare an environmental impact report or an environmental impact
statement, or file a registration form depending on the seriousness of effect that may be exerted on the
environment.
Pollutant discharge
Pursuant to the Administrative Measures for Pollutant Discharge Licensing (for Trial
Implementation) (༊Б) promulgated on January 10, 2018 and partially revised on
August 22, 2019 by the original environmental protection department, now known as the Ministry of
Ecology and Environment (the “MEE”), and the Administrative Measures for Pollutant Discharge
Licensing (جwhich was promulgated on April 1, 2024 and scheduled to be
implemented on July 1, 2024, enterprises, public institutions and other producers and operators under the
administration of discharge permits (referred to as “discharge units”) shall apply for and obtain a
pollutant discharge license and discharge pollutants in accordance with the provisions of the discharge
permit. Any enterprise that fails to obtain a pollutant discharge license as required shall not discharge
pollutants.
According to the Catalog of Classified Administration of Pollutant Discharge License for Stationary
Pollution Sources (2019 Version) (๕રϮ஢̙ʱᗳ၍ଣΤ፽ 2019) issued by the MEE
on December 20, 2019, key management, simplified management and registration management of
pollutant discharge permits are implemented according to factors including the amount of pollutants
generated, the amount of pollutants discharged, the degree of impact on the environment, etc., and only
pollutant discharge entities that implement registration management do not need to apply for a pollutant
discharge permit.
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According to the Regulation on Pollutant Discharge Permit Administration ( રϮ஢̙၍ଣૢԷ )
issued by the State Council on January 24, 2021 and effective on March 1, 2021, the administration on
pollutant discharge units are divided into key management and simplified management pursuant to the
amount of pollutants generated, the amount of pollutants discharged and the degree of impact on the
environment. The review, decision and information disclosure of pollutant discharge licenses shall be
handled through the management information platform of the national pollutant discharge license. The
pollutant discharge license is valid for five years and the discharging units should apply for renewal 60
days to the approval authority before the expiry of the pollutant discharge license if they need to
discharge pollutants on a continuous basis.
Acceptance inspection on environmental protection facilities
According to the Administration Rules on Environmental Protection of Construction (ணධͦᐑྤ
ᚐ၍ଣૢԷ ), upon completion of construction for which an environment impact report or environment
impact statement is formulated, the constructor shall conduct acceptance inspection of the environmental
protection facilities pursuant to the standards and procedures stipulated by the environmental protection
administrative authorities of the State Council and formulate the acceptance inspection report. The
constructor needs to disclose to the public the acceptance inspection report pursuant to the 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 failed on acceptance
inspection, the construction project shall not be put into production or use.
Fire prevention design and acceptance
The Fire Prevention Law of the PRC (جthe “Fire Prevention Law”) was issued
by the SCNPC on April 29, 1998, became effective on September 1, 1998 and was last amended and
implemented on April 29, 2021. According to the Fire Prevention Law, for special construction projects
stipulated by the housing and urban-rural development authority of the State Council, the developer shall
submit the fire safety design documents to the housing and urban-rural development authority for
examination, while for construction projects other than those stipulated as special development projects, the
developer shall, at the time of applying for the construction permit or approval for work commencement
report, provide the fire safety design drawings and technical materials which satisfy the construction needs.
According to Interim Regulations on Administration of Examination and Acceptance of Fire Control Design
of Construction Projects (֛issued by the Ministry of Housing
and Urban-Rural Development of the PRC on April 1, 2020, last amended on August 21, 2023 and effective
on October 30, 2023, an examination system for fire prevention design and acceptance only applies to special
construction projects, and for other projects, a record-filing and spot check system would be applied.
Laws and Regulations in Relation to Exportation of Goods
According to the Regulations of the PRC on the Administration of Import and Export of Goods ( ʕശɛ
ආ̈ɹ၍ଣૢԷ ) promulgated by the State Council on December 10, 2001, which came into
effect on January 1, 2002 and was last amended on March 10, 2024 and effective on May 1, 2024, the Foreign
Trade Law of the PRC (ج׸promulgated by the SCNPC on May 12, 1994 which
came into effect on July 1, 1994 and last amended on December 30, 2022, the Customs Law of the PRC ( ʕ
جpromulgated by the SCNPC on January 22, 1987, which came into effect on July 1,
1987 and last amended on April 29, 2021, the Measures for Record Filing and Registration by Foreign Trade
Dealer (جpromulgated by the Ministry of Commerce of China (“MOFCOM”)
on June 25, 2004, which came into effect on July 1, 2004 and was last amended on May 10, 2021 and the
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Administrative Provisions of the Customs of the People’s Republic of China on Record-filing of Customs
Declaration Entities (֛promulgated by the General
Administration of Customs of the PRC on November 19, 2021, which came into effect on January 1, 2022,
foreign trade business operators engaging in the import or export of goods or technology must go through the
record filing and registration formalities with MOFCOM or the agency entrusted by MOFCOM. Unless
otherwise provided, the declaration of import or export goods and the payment of duties may be made by the
consignees or consignors themselves, or by entrusted customs brokers. Customs declaration entities refer to
consignees or consignors of imported or exported goods or customs brokers that have filed for record with
Customs. Customs declaration entities may conduct customs declaration business within the customs
territory of the PRC.
In accordance with the Law of the People’s Republic of China on Import and Export Commodity
Inspection (جpromulgated by the SCNPC on February 21, 1989,
implemented on August 1, 1989 and last amended on April 29, 2021, and the Implementation Regulations
of the Import and Export Commodity Inspection Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷
ૢԷ ) promulgated by the State Council on August 31, 2005 and implemented on
December 1, 2005, after the latest revision on March 29, 2022, the General Administration of Customs is
in charge of the inspection of import and export commodities nationwide. Exit and entry inspection and
quarantine authorities shall inspect the import and export commodities listed in the catalogue and other
import and export commodities that are subject to inspection by exit and entry inspection and quarantine
authorities as stipulated by laws and administrative regulations. The entry-exit inspection and quarantine
authorities shall conduct random inspection and inspection of import and export commodities other than
those mentioned above in accordance with the provisions of the state. Imported commodities subject to
inspection shall not be sold or used without inspection. Export commodities subject to inspection shall
not be allowed to be exported if they have not been inspected or fail to pass the inspection.
Laws and Regulations Relating to Data, Network and Information Security
According to the Cybersecurity Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ၣഖτΌ
جthe “Cybersecurity Law”) promulgated by the SCNPC on November 7, 2016 and effective on June 1,
2017, network operators must abide by applicable laws and administrative regulations and fulfill their
cybersecurity protection obligations when conducting business and service activities. To build or operate
a network or provide services through a network, technical and other necessary measures shall be taken in
accordance with the provisions of laws and administrative regulations and the mandatory requirements of
national standards to ensure the security and stable operation of the network, effectively respond to
network security incidents, prevent illegal and criminal activities on the network and maintain the
integrity, confidentiality and availability of network data.
The Data Security Law of the People’s Republic of China (جthe “Data
Security Law”) was promulgated by the SCNPC on June 10, 2021 and took effect on September 1, 2021.
The Data Security Law provides for measures to support the promotion of data security and development,
establishes and improves the national data security management system and clarifies the responsibilities
of organizations and individuals with regard to data security. The Data Security Law introduces a
classification and classification protection system for data based on the importance of data in economic
and social development, as well as the degree of harm to national security, public interests or the
legitimate rights and interests of individuals and organizations once it is tampered with, destroyed, leaked
or illegally obtained or illegally used.
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The Cyber Administration of China (the “CAC”) and several other regulatory authorities in China
jointly issued the Cybersecurity Review Measures (جon December 28, 2021, which
came into effect on February 15, 2022. Where critical information infrastructure operators purchase
network products and services, and network platform operators carry out data processing activities that
affect or may affect national security, network security reviews shall be conducted in accordance with the
Cybersecurity Review Measures.
The Personal Information Protection Law of the People’s Republic of China (ɛ
جthe “Personal Information Protection Law”) was promulgated by the SCNPC on August 20,
2021 and took effect on November 1, 2021. The Personal Information Protection Law stipulates the scope
of personal information and the methods of processing personal information, establishes rules on
personal information processing and rules on cross-border provision of personal information and clarifies
the rights of individuals in personal information processing activities and the obligations of personal
information processors.
According to the Regulations on the Administration of Network Data Security promulgated by the
State Council on September 24, 2024 and to be implemented on January 1, 2025, network data processors
carrying out network data processing activities that affect or may affect national security shall conduct
national security reviews in accordance with relevant state regulations.
According to the Measures for Data Exit Security Assessment (ج)
promulgated by the CAC on July 7, 2022 and effective on September 1, 2022 (the “Security Assessment
Measures”), if the data processor provides data overseas, under any of the following circumstances, it
shall report the data exit security assessment to the national network information Department through the
local provincial network information department: (1) the data processor provides important data outside
China; (2) critical information infrastructure operators and data processors processing the personal
information of more than one million people provide personal information abroad; (3) since January 1 of
the previous year, data processors who have provided personal information of 100,000 people or sensitive
personal information of 10,000 people abroad have provided personal information abroad; and (4) other
situations required to declare data exit security assessment as stipulated by the national network
information department.
Laws and Regulations in Relation to Foreign Investment
The Company Law of the People’s Republic of China (جthe “Company
Law”) was promulgated by the SCNPC on December 29, 1993, implemented on July 1, 1994, and revised
and implemented on October 26, 2018. It was last revised on December 29, 2023 and became effective on
July 1, 2024. According to the Company Law, companies are generally divided into two categories,
namely limited liability companies and joint stock limited companies. The Company Law shall also apply
to joint stock limited companies with foreign investment.
The Foreign Investment Law of the People’s Republic of China (جthe
“Foreign Investment Law”) was promulgated by the NPC on March 15, 2019 and became effective on
January 1, 2020. The Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures, the
Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises and the Law of the
People’s Republic of China on Sino-Foreign Contractual Joint Ventures were abolished at the same time.
Since then, the Foreign Investment Law has become the basic law regulating foreign-invested enterprises
wholly or partially invested by foreign investors. The organization form, institutional framework and
standard of conduct for foreign-invested enterprises shall be subject to the provisions of the Company
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Law and other laws. China implements the management system of pre-entry national treatment and the
negative list for foreign investment, and abolished the original approval and filing administration system
for the establishment and change of foreign-invested enterprises. Pre-entry national treatment refers to
the treatment accorded to foreign investors and their investments at the stage of investment entry, which
is no less favorable than the treatment accorded to domestic investors and their investments.
The Negative List refers to a special administrative measure for the entry of foreign investment in
specific sectors as imposed by the PRC. The PRC accords national treatment to foreign investment
outside of the Negative List. The current negative list is the Special Management Measures for the Access
of Foreign Investment (2024 Revision) (૶ఊ2024) (the
“Negative List”) issued by the National Development and Reform Commission of China (the “NDRC”)
and MOFCOM on September 6, 2024, effective on November 1, 2024, which lists the special
management measures for foreign investment access for industries regulated by the Negative List, such as
equity requirements and senior management requirements. In the current implementation of the Negative
List, the Company’s industry, industrial robot manufacturing, is not explicitly listed as a negative
regulatory object.
While strengthening investment promotion and protection, the Foreign Investment Law further regulates
foreign investment management and proposes the establishment of a foreign investment information reporting
system that replaces the original foreign investment enterprise approval and filing system of MOFCOM. The
foreign investment information reporting is subject to the Foreign Investment Information Reporting Method
(جjointly developed by MOFCOM and the SAMR, which came into effect on January 1,
2020. According to the Foreign Investment Information Reporting Method, foreign investors who directly
or indirectly carry out investment activities in China shall submit investment information to the
competent commercial department through the enterprise registration system and the National Enterprise
Credit Information Publicity System. The reporting methods include initial reports, change reports,
cancellation reports, and annual reports.
Laws and Regulations in Relation to Overseas Listing
On February 17, 2023, with the approval of the State Council, the CSRC issued relevant rules and
regulations for the administration of overseas listing filings which took effect on March 31, 2023. There
are six institutional rules issued this time, including the Overseas Listing Trial Measures and five
supporting guidelines.
According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and
list securities in overseas markets, either in direct or indirect means, shall file with the CSRC and submit
relevant information within three business days after submitting the application documents for issuance
and listing overseas.
The Overseas Listing Trial Measures provides that an overseas listing or offering is explicitly
prohibited, if any of the following applies: (1) such securities offering or listing is explicitly prohibited
by provisions in PRC laws, administrative regulations or relevant state rules; (2) the proposed securities
offering or listing may endanger national security as reviewed and determined by competent authorities
under the State Council in accordance with laws; (3) the domestic company intending to be listed or offer
securities in overseas markets, or its controlling shareholder(s) and the actual controller, have committed
crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order
of the socialist market economy during the latest three years; (4) the domestic company intending to be
listed or offer securities in overseas markets is currently under investigations for suspicion of criminal
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offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (5)
there are material ownership disputes over equity held by the domestic company’s controlling
shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or
actual controller.
In addition, Chinese domestic enterprises seeking overseas listing shall strictly abide by the laws,
administrative regulations and relevant provisions of the Chinese government on foreign investment,
state-owned assets, industry supervision, overseas investment, etc., and shall not disturb the domestic
market order, nor harm the national interests, public interests or the legitimate rights and interests of
domestic investors.
The Overseas Listing Trial Measures also specify corresponding legal responsibilities, if a domestic
enterprise violates its relevant provisions, the domestic enterprise may be ordered to correct, warned,
fined, and other penalties, its controlling shareholders, actual controllers, directly responsible
executives, and other directly responsible personnel may also be warned, fined, and other penalties.
Laws and Regulations in Relation to the H Share “Full Circulation”
The Company shall comply with regulations on the H share “full circulation” to converse its domestic
shares into H shares and circulate on the Stock Exchange. Pursuant to the Guidelines on Application for “Full
Circulation” of Domestic Unlisted Shares of H-share Companies (Hஷ
ˏ) (the “Full Circulation Guidelines”) promulgated and implemented by the CSRC on November 14,
2019, and last revised and effective on August 10, 2023, shareholders of domestic unlisted shares may
determine by themselves through consultation the amount and proportion of shares, for which an application
will be filed for circulation, provided that the requirements laid down in the relevant laws and regulations and
set out in the policies for state-owned asset administration, foreign investment and industry regulation are
met. After domestic unlisted shares are listed and circulated on the Stock Exchange, they may not be
transferred back to China.
According to the Full Circulation Guidelines, “Full Circulation” represents the shareholders of
domestic unlisted shares of domestic companies (including the unlisted domestic shares held by domestic
shareholders before overseas listing, the unlisted domestic shares issued in the territory after overseas
listing and the unlisted shares held by foreign shareholders) are listed and circulated on the Stock
Exchange. The shareholders of domestic unlisted shares shall authorize the domestic company to file the
“Full Circulation” application with the CSRC by filing materials on key compliance issues, including
whether the “Full Circulation” has fulfilled adequate internal decision-making procedures, necessary
internal approvals and authorizations, and whether the “Full circulation” involves approval or filing
procedures set out in the laws, regulations and policies for state-owned asset administration, industry
supervision and foreign investment, and if so, whether such approval or filing procedures have been
performed.
According to the Measures for Implementation of H-share “Full Circulation” Business (Hݴ
ۆthe “Measures for Implementation”), promulgated by the China Securities
Depository and Clearing Corporation Limited (the “CSDC”) and the SZSE on December 31, 2019, the
businesses of cross-border transfer registration, maintenance of deposit and holding details, transaction
entrustment and instruction transmission, settlement, management of participants, services of nominal
holders, etc. in relation to the H-share “full circulation business,” are subject to the Measures for
Implementation. Where there is no provision in the Measures for Implementation, it shall be handled with
reference to other business rules of the CSDC and China Securities Depository and Clearing (Hong Kong)
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Company Limited (the “CSDC (Hong Kong)”), and the SZSE. In order to fully promote the reform of
H-shares “Full Circulation” and clarify the business arrangement and procedures for the relevant shares’
registration, custody, settlement and delivery, CSDC (Hong Kong) promulgated the Circular on Issuing
the amendment and publication of the “Guidelines for the Full Circulation” of H-Shares of China
Securities Depository and Clearing (Hong Kong) Company Limited on September 20, 2024, effective on
September 23, 2024, which specifies the business preparation, account arrangement, cross-border share
transfer registration and overseas centralized custody, etc. According to the Notes on the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (׵
׼the new regulations aims to strengthening
institutional inclusiveness and deepening opening-up, and lays out “full circulation” arrangements. For
the overseas offering and listing by a domestic company, holders of its domestically-based domestic
unlisted shares are allowed after filing to convert the shares into overseas listed shares to be circulated on
overseas trading venues.
U.S. LA WS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of the U.S., which are
relevant to the business and operations of our Group.
Laws and Regulations in relation to Product Liability and Consumer Protection
As a manufacturer and seller of robotics products, we may be liable for injuries and damages caused
by our products under broad and consumer-friendly products liability laws if the products are proven to
be defective. Each of the 50 states in the United States has different laws and judicial precedents that can
vary significantly from one another. While circumstances and jurisdictions can differ in significant ways,
the following provides a broad overview of the product liability law concepts that are generally followed
in the majority of the states within the United States.
Product liability lawsuits may be brought against manufacturers by individual plaintiffs who have
sustained injury, death, or property damage due to a defective product. In addition, lawsuits may be
brought by groups of plaintiffs who have suffered similarly-situated claims relating to a defective product
and who are certified by a court as a proper class of plaintiffs to act together to bring a class action suit in
the United States. Manufacturers may also be subject to cross-claims or third-party claims for indemnity
or contribution brought by other defendants in a product liability suit who may be upstream or
downstream in the supply chain.
The types of product liability claims brought by plaintiffs generally fall into three broad categories:
(1) design defect claims, which are based upon inherent flaws in the intended design or make-up of the
product, (2) manufacturing defect claims, which are based on product flaws caused during the
construction or production of the particular item that deviate from the intended design, and (3) failure to
warn claims, which are based on inadequate product warnings or instructions, and whether inherent
dangers could have been mitigated or avoided through adequate warnings to the user. Some states have
also added an additional post-sale duty to warn of later discovered latent defects, designed to prevent
future injuries involving the same product.
If a product liability claim is proven, the following types of damages, among others, may be
recoverable by the plaintiff depending on the particular facts and the specific jurisdiction: (1) money
damages for pain and suffering; (2) money damages for lost earnings or medical expenses; (3) long-term
care expenses; (4) loss of financial support; (5) loss of consortium; (6) damage to property; and (7)
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punitive damages in the event the plaintiff can demonstrate reckless or intentional behavior on the part of
the manufacturer. Punitive damages awards can be many times higher than the amount of compensatory
damages and they are not awarded to compensate an injured party but rather to punish past and deter
future misconduct. In some jurisdictions, plaintiffs may also be able to recover statutory damages and
attorneys’ fees if a state or U.S. federal statute permits such recovery. Usually, such statutes target
specific goods or industries. The sources for these regulations are either state statutes or administrative
regulations that place specific requirements on certain industries. Such requirements often take the form
of labeling or licensing requirements and are usually enforced by public health or state safety agencies or
by state attorneys-general. Civil and/or criminal penalties may be imposed for violations of the
safety-driven consumer product regulations.
In addition to the state laws and regulations, some of our products are also governed by the federal
Consumer Product Safety Act and its regulations, which are enforced by the U.S. Consumer Product
Safety Commission (the “CPSC”). These safety oriented laws and regulations govern consumer products.
The laws require affirmative reporting to the CPSC of consumer product defects that constitute
substantive product hazards. Failure to timely report substantial product hazards can result in significant
fines and penalties.
The CPSC also governs recalls of consumer products. Product recalls are normally implemented to
remove or repair defective products in the market to help avoid injuries and limit product liability risk.
The broad public notification issued for consumer product recalls can often provide a defense to product
liability claims where plaintiffs were aware of but failed to participate in a recall.
The U.S. Magnuson-Moss Warranty-Federal Trade Commission Improvements Act
(“Magnuson-Moss”) addresses both written and implied warranties for consumer products.
Magnuson-Moss authorizes the adoption of federal regulations concerning both written and implied
warranties, governs disclosure and designation standards for written warranties, specifies standards for
full warranties, and affords consumers with remedies for breach of warranty obligations and/or
obligations under service contracts for consumer products. Consumer products sold in the United States
are not required to have warranties, but any warranties provided by a manufacturer must comply with
Magnuson-Moss. The statute governs the manner in which warranties must be communicated to
consumers. In general, the terms and conditions of warranties must be conspicuously and fully disclosed,
in simple and readily understood language, and any ambiguities are to be construed against the drafter of
the warranty. The U.S. Federal Trade Commission has authority to enforce the requirements of
Magnuson-Moss and regulations thereunder, and may seek an injunction to stop violations. Consumers
may seek recourse for Magnuson-Moss violations in individual or class actions, and a prevailing
consumer may recover the costs of suit (including attorneys’ fees) in addition to damages.
Laws and Regulations in relation to Labor and Employment
The employment of individuals in the United States is governed by federal, state and sometimes
local laws. Labor and employment laws can generally be categorized under the headings of (1) equal
employment opportunity, (2) wage and hour, (3) medical/disability, (4) union rights, and (5) workplace
safety. Typically, national laws set the minimum legal standard for employee rights, and state and local
laws, if adopted, enhance those rights. Most employees in the United States are hired “at-will,” meaning
that their employment can be terminated at any time, with or without notice, cause, or government
mandated severance pay. However, individual employment agreements between an employee and
employer may vary this status, and even an at-will employee may not be terminated for an illegal reason
(such as discrimination), nor may an employee be terminated or otherwise retaliated against for engaging
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in protected activity under the law. In addition, employers are required to maintain workplaces that are
free of harassment based on protected characteristics such as sex, race, etc.
Employees who believe they have suffered discrimination, harassment, or other alleged wrongs may
pursue claims against us through state and U.S. federal governmental agencies and the courts.
Laws and Regulations in relation to International Trade
Our cross-border operations include the importation of goods into the United States and the
exportation of goods from the United States. As a result, our business requires compliance with tariffs
and other import controls, anti-dumping rules and regulations, export controls, U.S. economic and other
sanctions programs, and anti-bribery laws and regulations.
Importation of goods into the United States
Importation of goods into the customs territory of the United States is governed principally by the
Tariff Act of 1930, as amended, the Customs Modernization Act, and the regulations of U.S. Customs and
Border Protection (“CBP”). Under these laws and regulations, U.S. importers have primary legal
responsibility for initially valuing, classifying, and determining the rate of duty applicable to imported
merchandise. The importer is required to exercise “reasonable care” in entering merchandise into the
United States. This includes when providing to CBP information and documentation necessary for it to
assess duties on imported merchandise, collect accurate import statistics, and determine whether an
import complies with applicable laws.
Civil penalties may be assessed against any person who uses false or misleading statements to enter
goods into the United States. In determining the applicable penalty for such a wrongdoing, CBP first
determines the applicable degree of culpability of the offending party. In general, higher penalties are
assigned to more egregious offenses, which are classified according to degree of culpability as due to
negligence, gross negligence, or fraud. CBP considers that a violation is a result of negligence “if it
results from failure to exercise reasonable care and competence: (a) to ensure that statements made and
information provided in connection with the importation of merchandise are complete and accurate; or
(b) to perform any material act required by statute or regulation.” Gross negligence and fraud are found in
more egregious cases where circumstances indicate more than a lack of due care. Gross negligence is
assigned where CBP finds a violation done “with actual knowledge of or wanton disregard for the
relevant facts and with indifference to or disregard for the offender’s obligations under the statute.” Fraud
is assigned where the act was “committed (or omitted) knowingly, i.e. was done voluntarily and
intentionally, as established by clear and convincing evidence.” Where false statements affect the
assessment of duties on imports, the statutory maximum civil monetary penalties vary depending on
whether the violation is due to fraud, negligence, or gross negligence.
Anti-dumping laws and regulations
U.S. federal anti-dumping laws and regulations prohibit unfair global competition by prohibiting
non-U.S. entities from selling products in the U.S. for unreasonably low prices. The usual test is whether
the goods are being sold in the U.S. for less than they are sold for in the home market. If a company is
found to be violating anti-dumping regulations, U.S. customs can impose additional duties on the
imported goods.
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Tariffs
The United States imposes a variety of tariffs on imported goods. While the U.S. Constitution grants
Congress the authority to impose tariffs, several statutes have shifted that authority to the President under
certain circumstances. Within the United States, agencies involved in international trade regulation
include the CBP, the U.S. International Trade Commission (“ITC”), and the Office of the U.S. Trade
Representative (“USTR”). CBP is responsible for collecting tariffs on goods imported to the United
States during the customs clearance process. The ITC is a quasi-judicial agency that administers U.S.
laws governing trade remedies and provides analysis, information, and other support concerning tariffs
and other international trade matters for the President, U.S. Congress, and the USTR. The ITC also
investigates alleged violations of U.S. trade law, including unfair trade practices under Section 337 of the
Tariff Act of 1930, illegal foreign financial subsidies, and violations, and Section 201 of the Trade Act of
1974 (imports of goods into the U.S. at an increased quantity that is a substantial cause of serious injury
to a U.S. domestic industry). The USTR is a cabinet-level position within the office of the President of the
United States, and serves as the President’s principal adviser, negotiator, and spokesperson regarding
matters of international trade.
The USTR is authorized to take certain action under Section 301 of the Trade Act of 1974 (“Section
301”), including without limitation the imposition of tariffs or other restrictions on imports, if it
determines after investigation that a foreign government has engaged in unfair trade practices. In 2018,
following a USTR investigation and report, the United States imposed tariffs on certain imported goods
of Chinese origin. Section 301 tariffs are assessed and collected in addition to any other duties that may
apply (including, without limitation, anti-dumping duties). Both the United States and China have
brought claims against one another before the World Trade Organization in connection with this trade
dispute.
For details of certain export controls, U.S. economic and other sanctions programs that are relevant
to our international and cross-border operations, please refer to the sections headed “Regulatory
Overview—U.S. Sanctions Regimes—Economic Sanction” and “Regulatory Overview—U.S. Sanctions
Regimes—Export Control Regulations” in this prospectus.
Laws and Regulations in relation to Tax
F ederal government
The U.S. federal government can levy a variety of taxes on U.S. businesses, non-U.S. businesses
engaging in certain activities in the United States, and business owners and their employees. Our business
activities in the U.S. require us to pay U.S. federal income tax, taxes on the sale of certain assets, income
tax on dividends, distributions, and interest, sales and other transfer taxes, employee payroll taxes,
withholding obligations, and other taxes.
State and local governments
In addition to the federal government, the 50 U.S. states and their political subdivisions play an
important role in taxing and regulating business activity within their respective jurisdictions. For
example, our business activities within a U.S. state may be subject to the state’s business and personal
income tax, payroll tax, sales tax, real and personal property tax, franchise tax, withholding obligations,
and other taxes. In addition, some local governments, such as counties and cities, may impose their own
similar taxes.
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Laws and Regulations in relation to Registration and Regulation
Corporations in the United States are registered and organized in one of the 50 states. In addition to
its legal formation in a particular state, a corporation that does business in more than one state may need
to qualify or register to do business in other states if the corporation’s activities establish “minimum
contacts” for tax purposes in those states. Individual state laws apply to business transactions occurring
in each state, unless such laws conflict with, or are superseded by, U.S. federal law, which takes
precedence over state and local law. For this reason, U.S. businesses frequently must comply with
separate federal, state and local regulations.
JAPAN LA WS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of Japan, which are
relevant to the business and operations of our Group.
Laws and Regulations in relation to Product Liability and Consumer Protection
Pursuant to the Product Liability Act of Japan (Act No. 85 of 1994), in the case where a defect in a
product causes damage to the life, body, or property of others, “the manufacturer, etc.” is liable for such
damage. If such product is imported, the importer is included in definition of “manufacturer, etc.”
Laws and Regulations in relation to Labor and Employment
In Japan, there are various labor-related laws, such as the Labor Standards Act of Japan (Act No. 49
of 1947), the Industrial Safety and Health Act of Japan (Act No. 57 of 1972), and the Labor Contract Act
of Japan (Act No. 128 of 2007). The Labor Standards Act of Japan stipulates the minimum standards for
working conditions, such as working hours, vacation periods, and vacation days. The Occupational
Safety and Health Act of Japan mandates the implementation of measures to ensure worker safety and for
the protection of workers’ health in the workplace. The Labor Contract Act of Japan provides for changes
in employment contracts and rules, dismissal, and disciplinary action.
Laws and Regulations in relation to International Trade/Cross-border Trade
Under the Customs Act of Japan (Act No. 61 of 1954), in the case where an importer is accepting
goods arriving in Japan from a foreign country, an import declaration shall be filed with Japan Customs in
principle and customs duties, if any, shall be paid. When an import declaration is made, Japan Customs
shall inspect the goods as necessary, and after confirming that the importer has paid the corresponding
customs duties, permit the importation of the goods.
If goods require a permit upon importation under laws and regulations other than the Customs Act of
Japan, it would be necessary for an importer to obtain a permit prior to filing the import declaration.
However, industrial robots do not require special permission for importation.
Laws and Regulations in relation to Tax
Japanese companies are obliged to pay corporate tax. Corporate tax is broken down into two parts:
one part is levied based on the annual income of the previous year, and the other part is levied uniformly
regardless of the annual income. Corporate tax rates and amounts vary depending on a company’s income
and size (capital and number of employees), ranging from 15% to 23.2%.
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GERMANY LA WS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of Germany, which are
relevant to the business and operations of our Group.
Product Liability and Consumer Protection
Manufacturer and seller of robotics products who bring their products into the German market must
ensure their products designed, manufactured and provided with appropriate user information so that any
hazardous situation in the course of product use can be avoided. The most important legal framework
relating to product safety and compliance are the German Product Safety Act (the “ProdSG”) and German
Product Liability Act (the “ProdHaftG”). Other than that, a product could be subject to further legal
requirements imposing formal requirements on the economic operators.
The ProdSG stipulates that a product may only be introduced onto the market if it does not
jeopardize the safety and the health of persons if used in a regular and foreseeable way. Insofar as a
product is subject to one or more legal regulations under the ProdSG, it may only be made available on
the market if it additionally meets the requirements provided for therein. Under the ProdSG, the
assessment whether a product is secure is based in particular on the characteristics of the product, on the
impact of the product on other products, on the product-related information (presentation, marking,
warnings and instructions for use and operation, etc.) as well as on the group of users of the product
(consumer or particularly endangered user groups). The ProdSG establishes uniform federal safety
standards for products by prescribing regulations on the safety requirements of consumer products. The
manufacturer’s labelling according to the ProdSG provides, among other things, for the indication of the
manufacturer’s data on consumer products. This is to enable traceability as well as identification in case
of e.g. consumer warnings or product recalls. The manufacturer, his authorized representative and the
importer must affix a clear identification mark on the consumer product. The marking, in conjunction
with the manufacturer’s data, must ensure the identification of a product, e.g. in the event of a recall. The
responsible persons must also ensure that the user is informed about risks associated with the consumer
product during its period of use (e.g. instructions for use).
Under the ProdSG, a manufacturer is anyone who manufactures, remanufactures or significantly
modifies a product. He does not have to manufacture the product himself, but can also place it on the
market under his name or trademark (as a so-called quasi-manufacturer). The authorized representative is
established in the European Economic Area and is commissioned in writing by the manufacturer to fulfil
the manufacturer’s obligations on his behalf; he is the contact person for the authorities. The importer and
the distributor are also subject to the ProdSG.
According to the ProdHaftG, either the seller or the producer, or both jointly, can be held liable if
the products turn out to be defective. The harmed person may raise claims arising from product liability,
producer liability, and warranty for defects. In the event a product has caused damage to persons or items
(other than the defective product), the producer is strictly liable pursuant to the ProdHaftG. Liability
under the ProdHaftG can neither be restricted nor excluded in advance. The ProdHaftG applies, if the
harmed person has its habitual residence in Germany and the defective product was placed on the German
market or if the defective product was bought in Germany and was placed on the German market or if the
harm arose in Germany and the defective product was placed on the German market. It is sufficient that
the producer could reasonably foresee that a product might be placed on the German market by another
market participant, e.g. one of its customers, to be liable under the ProdHaftG. Thus, it is not necessary
that the defective product was imported to Germany by the producer. Comparable regulations also apply
in the other member States of the E.U.
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Labor and Employment Laws
In Germany, the employment law is not completely codified. Basically, the employment
relationships are governed by German Civil Code with employment specifications. Rather, the German
employment law is to the extent that is governed by written legal norms and different specific laws with
regard to termination protection, working hours, minimum wages, employee protects and etc. also
governed and formed by judicial cases and development. It should also be noted that the employment
disputes are jurisdiction of a specific court, namely the labor court.
The most important specific laws regarding the German employment relationships are, among
others, the following:
German Protection Against Unfair Dismissal Act (the “KSchG”)
An employer’s ability to (unilaterally) terminate an employment relationship is substantially
restricted by the KSchG. The KSchG is applicable if the operation has more than 10 employees and the
employee to be dismissed has been employed for more than 6 months. Under the KSchG, an ordinary
dismissal (i.e. with notice) will only be effective if based on one of the three reasons for termination
explicitly permitted by the KSchG. These are conduct-related dismissal, dismissal for reasons connected
with the individual employee and dismissal for operational reasons.
F ederal V acation Act (the “BUrlG”)
The BUrlG sets forth the rules regarding the minimum vacation entitlement of employees, the
granting of vacation as well as the expiry of the vacation entitlement.
German Part-Time and Limited Term Employment Act (the “TzBfG”)
The TzBfG sets forth rules to promote part-time work, to define the requirements for the
permissibility of employment agreements for limited terms and to prevent discrimination against
part-time and limited term employees.
German Works Constitution Act (the “BetrVG”)
The BetrVG stipulates employee codetermination within an establishment. The most important
codetermining body under the BetrVG is the works council, an elected employee representative body
which has rights of its own vis-a-vis the employer. It exercises most of the codetermination rights
governed by the BetrVG.
German Collective Bargaining Agreements Act (the “TVG”)
The TVG regulates the right to and content of collective bargaining agreements. Collective
bargaining agreement, inter alia, set forth a minimum standard for working conditions, such as
remuneration, working hours and holiday entitlement.
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Regulations on the Importation and Distribution of the Company’s Products in Germany
In accordance with Foreign Trade and Payment Act, as part of import clearance, checks will be made
to ensure that all legal provisions regulating the import of the goods in question have been observed.
There are a large number of regulations governing imports into the European Union and to Germany.
Besides customs regulations and foreign trade regulations, attention must also be paid to prohibitions and
restrictions, most of which serve non-commercial interests such as protecting human health interests or
environmental protection.
In Germany, in accordance with German Foreign Trade and Payment Act, in principle, goods,
services, capital, payments and other business transactions with foreign countries as well as foreign
assets and gold within member countries (external trade transactions) may be transported freely. Import
restrictions are dictated by European Community Law and the German Foreign Trade Ordinance from
August 2, 2013. In principle, quantitative restrictions on imports are no longer imposed. However, for
particular goods originating from particular countries, import permits are needed, and quantitative
restrictions can on occasion be imposed. Approval must be obtained from the Federal Office of
Economics and Export Control (for commercial products).
Tax Laws
The German tax system comprises two basic categories, namely direct and indirect taxes. For direct
taxes, the taxable entities bear the ultimate tax burden, e.g. income tax, corporation tax and trade tax. For
indirect taxes, the tax debtor transfers the tax burden to another party.
Direct tax
The taxation of German companies depends on the entity’s legal form. Corporations are treated as
nontransparent for tax purposes, i.e. that the taxable profit is subject to taxation at the level of the
corporation itself. Profits of corporations are subject to corporation tax (Körperschaftssteuergesetz,
KStG), solidarity surcharge and trade tax (Gewerbesteuergesetz, GewStG). Partnerships are treated as
transparent for tax purposes, i.e. that the taxable profit will be allocated to the partners and depending on
the legal form of the partner is subject to income tax or corporation tax at the level of the partner. If the
partnership has a commercial business, the partnership must pay trade tax.
Corporation Tax Act (KStG)
Corporation tax is the income tax for corporations such as a liability limited company (Gesellschaft
mit beschränkter Haftung, GmbH) or a stock corporation (Aktiengesellschaft, AG). The basis of taxation
is the income earned during the calendar year. Corporation tax is levied at the rate of 15% on the taxable
profits. An additional solidarity surcharge of 5.5% of the tax amount is levied on corporation tax so that
the total tax rate (corporate tax and solidarity surcharge) currently amounts to 15.825%. Partnerships are
treat as transparent entities for tax purpose and subject to income tax (Einkommensteuergesetz, EStG).
Trade Tax Act (GewStG)
All commercial businesses, including partnerships, that operate in Germany are liable for trade tax.
Businesses are deemed to operate in Germany if they have a permanent establishment, i.e. a place of
business, in the country. The activities of a corporation such as a GmbH are always deemed commercial
business operations. Trade tax is collected by the relevant local authority who also determines its rate of
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tax. Therefore, the rates differ in accordance with the city in which the business is located. Current
effective rates range from around 14% to 18% of business income, whereby smaller towns are on the
lower, larger towns on the higher end.
Indirect tax
The most important indirect tax is the value added tax (the “V AT”).
V alue Added Tax Act (UStG)
Principally, V AT is chargeable on all public and private consumption (i.e. goods and service
purchased by final consumers). The main tax rates under the V AT Act are 19%, the general rate and 7%,
the reduced rate. The tax base is the consideration for the goods or services provided. If certain
requirements are met, goods are exempt from V AT if they are delivered to another E.U. Member State
(intra-Community deliveries of goods), as are goods delivered to a non-E.U. country (export deliveries).
Also exempt are certain activities as medical treatments and the granting and brokering of loans. Land
rentals are also exempt from value-added tax, although in some cases one may opt to be subject to V AT.
Customs Law
In principal, Germany’s Constitution grants exclusive authority to legislate customs duties to
domestic federal competence. The core regulation is the Customs Administration Act and the Customs
Regulation. However, as a member of the E.U., Germany has transferred this authority to the European
Union to a vast extent. The legal foundation for the levying of customs duties arises on the one hand from
Community customs law, in particular the Union Customs Code.
The responsibility for legislative measures and the entitlement to this revenue lies with the federal
government. Customs duties (import or export duties) are therefore administered by the Federal Finance
Administration. As a result of developments in Community customs law, legislative and revenue
competence has been transferred almost entirely to the European Union as the legal successor to the
European Community.
INTERNATIONAL SANCTIONS LA WS AND REGULATIONS
Set out below is a summary of the sanctions regimes imposed by the U.N., the U.S., the E.U., the
U.K. and Australia. This summary has not and is not intended to set out all relevant laws and regulations
relating to the sanctions regimes of the U.N., the U.S., the E.U., the U.K. and Australia in their entirety.
U.N. Sanctions Regimes
The United Nations Security Council (the “UNSC”) can take action to maintain or restore
international peace and security under chapter VII of the United Nations Charter. Sanctions measures
encompass a broad range of enforcement options that do not involve the use of any armed force.
The UNSC sanctions may take a number of different forms, in pursuit of a variety of different goals.
The measures have ranged from comprehensive economic and trade sanctions to targeted measures such
as arms embargoes, travel bans, and financial or commodity restrictions. The UNSC has applied sanctions
to support peaceful settlement of conflicts, counter-terrorism, protect human rights, promote
non-proliferation and deter non-constitutional changes. There are a number of ongoing sanctions regimes
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which focus on supporting political settlement of conflicts, nuclear non-proliferation and
counter-terrorism. Each regime is administered by a sanctions committee chaired by a non-permanent
member of the UNSC. There are 10 monitoring groups, teams and panels that support the work of the
sanctions committees.
U.N. sanctions are imposed by the UNSC, usually acting under chapter VII of the United Nations
Charter. Decisions of the UNSC bind members of the U.N. and override other obligations of U.N. member
states, but are not enforceable against private parties, and, therefore, U.N. member states are required to
implement the relevant U.N. sanctions. Each U.N. member states shall determine how the sanctions
imposed by the UNSC are implemented and enforced against private parties under its own domestic laws.
U.S. Sanctions Regimes
Economic sanction
The United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) is the
primary agency responsible for administering U.S. sanctions programmes against countries, entities and
individuals targeted by the U.S.
“Primary” U.S. sanctions apply to “U.S. persons” or activities involving a U.S. nexus (e.g., funds
transfers in U.S. currency or activities involving U.S.-origin goods, software, technology or services even
if performed by non-U.S. persons), and “secondary” U.S. sanctions apply extraterritorially to the
activities of non-U.S. persons even when the transaction has no U.S. nexus. Generally, U.S. persons are
defined as entities organized under U.S. law (such as companies and their U.S. subsidiaries); any U.S.
entity’s domestic and foreign branches (sanctions against for example Iran, Venezuela and Russia also
apply to U.S. companies’ foreign subsidiaries or other non-U.S. entities owned or controlled by U.S.
persons); U.S. nationals or permanent resident aliens (“green card” holders), regardless of their location
in the world; individuals physically present in the U.S.; and U.S. branches or U.S. subsidiaries of
non-U.S. companies.
Depending on the sanctions program and/or the parties involved, U.S. law also may require a U.S.
company or a U.S. person to “block” (or freeze) any assets or property interests owned, controlled or held
for the benefit of a country, entity, or individual subject to comprehensive sanctions when such assets or
property interests are in the U.S. or within the possession or control of a U.S. person. Upon such
blocking, no transaction may be undertaken or effected with respect to the asset or property interest, no
payments, benefits, provision of services or other dealings or other type of performance (in case of
contracts or agreements), except pursuant to a license or an authorization from OFAC.
OFAC’s sanctions programmes currently apply to Afghanistan, Balkans, Belarus, Burma, Central
African Republic, Cuba, Democratic Republic of the Congo, Ethiopia, Hong Kong, Iran, Lebanon, Libya,
Mali, Nicaragua, North Korea, the PRC, Somalia, South Sudan, Sudan and Darfur, Syria, the Crimea
region and the Luhansk People’s Republic and Donetsk People’s Republic regions of Ukraine, Venezuela,
West Bank and Yemen, amongst other specialist sanctions programmes targeting particular sectors or
regions. In addition, OFAC prohibits virtually all business dealings with persons and entities identified in
the Specially Designated Nationals And Blocked Persons List (the “SDN List”) maintained by OFAC,
which sets forth individuals and entities that are subject to its sanctions and restricted from dealings with
U.S. persons. Entities that a party on the SDN List owns (defined as a direct or indirect ownership interest
of 50% or more, individually or in the aggregate) are also blocked, regardless of whether that entity is
expressly named on the SDN List. Additionally, U.S. persons, wherever located, are prohibited from
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approving, financing, facilitating or guaranteeing any transaction by a non-U.S. person where the
transaction by that non-U.S. person would be prohibited if performed by a U.S. person or within the U.S.
Export control regulations
The Export Administration Regulations (the “EAR”), administered by the U.S. Department of
Commerce, Bureau of Industry and Security (“BIS”), govern the export and re-export of items “subject to
the EAR.”
Currently, “items subject to the EAR” generally include all U.S.-origin commodities, software and
technology. In limited circumstances, services are also covered. More specifically, items “subject to the
EAR” include (1) all items in the U.S. (except publicly available technology and software); (2) all
U.S.-origin items located outside the U.S.; (3) certain foreign-made items that include more than de
minimis amounts of controlled U.S. content; and (4) foreign-made national security items that are the
direct product of U.S.-origin national security technology or software.
BIS through the EAR maintains, amongst others, a list of names of certain foreign persons,
including businesses, research institutions, government and private organizations, individuals and other
types of legal persons (the “Entity List”). The Entity List initially arose as a list setting forth foreign
persons known to be involved in proliferation activities and the development of weapons of mass
destruction or missiles. Since its initial publication, grounds for inclusion on the Entity List have
expanded to activities sanctioned by the U.S. State Department and activities contrary to U.S. national
security or other foreign policy interests. Any transaction undertaken or effected of an item subject to the
EAR to an entity on the Entity List requires a license. This restriction also includes engaging in
transactions where the seller knows or has reason to know that the products to be transferred (or
re-transferred or re-exported) are destined for a prohibited end-use.
Further, BIS has a license review policy establishing a presumption that any license application for
a transfer, export or re-export to an entity on the Entity List be denied, as such, the BIS will only approve
a license in exceptional circumstances where it can be established that the granting of the license will not
harm or impair U.S. national security.
Pursuant to the EAR, an item may be exempted from being subject to the EAR if it fulfils certain
criteria, such as where it is a foreign made item, which contains not more than 25% U.S. origin content by
value (the “De Minimis Rule”). Such 25% U.S. origin content by value generally refers to foreign made
products which (1) incorporate U.S. origin parts or components into the finished product and those parts
or components would themselves require a specific license if they were exported separately and (2) the
fair market value of those parts or components as a percentage of the total value of the finished product
exceeds 25%. In order for an entity to avail itself under the De Minimis Rule, pursuant to part 734.4(d)(3)
and Supplement No. 2 to part 734 of the EAR, it must file a one-time report in respect of each product to
enable the U.S. Government to evaluate whether U.S. content calculations were performed correctly. The
report must contain a description of the scope and nature of the foreign technology, a description of its
fair market value, along with the rationale and basis for the valuation. Where the BIS has not contacted
the entity within 30 days after the filing of the report, the entity is entitled to rely upon the calculations
unless and until BIS contacts them otherwise.
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E.U. Sanctions Regimes
The E.U. implements all sanctions adopted by the UNSC and strengthens U.N. sanctions through
additional measures and/or sanctions on its own initiative. The E.U. does not generally ban dealing with
a counterparty in or with a jurisdiction targeted by sanctions measures, provided that the counterparty is
not a person or an entity listed on OFAC’s SDN List or other restricted parties lists maintained by the
U.N., U.S., E.U., U.K. or Australia or not engaged in prohibited activities, such as, directly or indirectly,
exporting, selling, transferring or making certain controlled or restricted products available to, or for use
in a jurisdiction subject to sanctions measures.
All E.U. sanctions apply: (1) within the E.U. (including its airspace); (2) on board any aircraft or
vessel under the jurisdiction of any E.U. Member State; (3) to any E.U. nationals, regardless of their
residency or location; (4) to any legal person, entity or body incorporated or constituted under the laws of
any E.U. Member State; and (5) to any legal person, entity or body in respect of any business done in the
E.U. E.U. sanctions are directly applicable in any E.U. Member State without national legislation.
However, penalties for breaches of E.U. sanctions depend on national legislation in each E.U. Member
State.
U.K. and U.K. overseas territories
While the U.K. is no longer an E.U. Member State, E.U. legislation as applied to the U.K. prior to
December 31, 2020 has been retained as laws of the U.K. in a form of domestic legislation known as
“retained E.U. legislation.” The U.K. applies its autonomous sanctions regime to: (1) its territory and
territory waters; (2) all U.K. nationals regardless of their location; (3) all individuals and legal entities
within the U.K.’s territory or undertake activities within the same; and (4) all U.K. legal entities
established under U.K. law including their non-U.K. branches (but excluding separately incorporated
non-U.K. subsidiaries), regardless of the location of their activities.
The Office of Financial Sanctions Implementation maintains two lists of persons subject to financial
sanctions and imposes financial penalties on a breaching party. The “consolidated list” includes all
designated persons subject to E.U. financial sanctions (including U.N. sanctions implemented through
E.U. regulations) and U.K. financial sanctions. A separate list includes entities subject to certain capital
market restrictions.
Australia
The Australian restrictions and prohibitions arising from the sanctions laws apply broadly to any
person in Australia, any Australian anywhere in the world, companies incorporated overseas that are
owned or controlled by Australians or persons in Australia, and/or any person using an Australian flag
vessel or aircraft to transport goods or transact services.
REGULATORY OVERVIEW
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OUR HISTORY AND DEVELOPMENT
Overview
We are one of leading companies that specializes in the development, manufacturing and
commercialization of collaborative robots, or commonly known as “cobots.”
Our Company was founded in the PRC in July 2015 by our founders, Mr. Liu, Mr. Lang Xulin (ც
؍and Mr. Wu Zhiwen ( юқ˖), and three other shareholders. Mr. Liu is a distinguished entrepreneur,
innovator and business leader. Under leadership and management of Mr. Liu, we are a top 2 player in the
global cobot industry and the No. 1 player among all Chinese cobot companies, with a global market
share of 13.0% as measured by shipment volume in 2023, according to the CIC Report. The global cobot
industry is at a nascent stage of development, whose market size accounted for less than 2% of the global
robot industry in terms of revenue in 2023. According to the same source, we rank seventh in the global
cobot industry with a global market share of 3.6% in terms of global revenue generated from cobots in
2023. See “Directors, Supervisors and Senior Management—Board of Directors—Executive Directors”
for the biographical details of Mr. Liu.
As of the Latest Practicable Date, Mr. Liu controlled 31.08% of the voting power at the general
meetings of our Company, comprising (1) 26.62% beneficially owned by him directly, (2) 3.50%
beneficially owned by Yuejiang LP, which is controlled by Mr. Liu as its general partner, and (3) 0.96%
beneficially owned by Qinmo LP, which is controlled by Mr. Liu as its general partner. Upon the Listing,
Mr. Liu will control 27.97% of the voting power at the general meetings of our Company, comprising (i)
23.96% beneficially owned by him directly, (ii) 3.15% beneficially owned by Yuejiang LP, and (iii) 0.86%
beneficially owned by Qinmo LP, assuming the Over-allotment Option is not exercised. Therefore, Mr.
Liu, Yuejiang LP and Qinmo LP were a group of our Controlling Shareholders as of the Latest Practicable
Date and will be our single largest group of Shareholders upon the Listing. See “Relationship with Our
Controlling Shareholders” for details.
Business Milestones
The following table illustrates our major business milestones:
Y ear Milestone
2015 Our Company was incorporated in Shenzhen
We launched a successful fundraising campaign on Kickstarter, a popular
crowdfunding website, for our first-generation desktop-level cobot, DOBOT
2016 We launched the world’s first desktop high-precision and multi-functional smart
cobot, Magician
We launched light-weighted four-axis SCARA cobot, M1
2018 Our core product, Magician, was featured in the “Great Tides Surge along the
Pearl River ( ɽᆓৎमϪ )” Exhibition for the 40th Anniversary of Reform and
Opening-up (׳in Guangdong
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Y ear Milestone
2020 We were selected to set up the Guangdong Robot Intelligent Interaction and
Control Engineering Technology Research Center (ዚኜɛ౽ঐʹʝၾછ
Ӻʕː )
We launched industrial-grade desktop-level cobot, MG400
2021 We started the manufacturing of our high-performance six-axis CR Series
We were recognized as Specialty and New Little Giant Enterprise ( ਖ਼ၚतอʃ̶
ɛΆุ)
We led the Autonomous Learning of Complex Skill by Intelligent Agent with
Multi-degree of Freedom, Key Components and Demonstration Application in 3C
Manufacturing Industry (౽ঐ᜗ልᕏҦঐІ˴ኪ୦eᗫᒟ௅΁ၾ 3CႡ
ிุͪᇍᏐ͜ ), a new generation AI key program under the key area research and
development plan of Guangdong province
2022 We launched the Nova Series targeting the commercial settings
Our production base in Rizhao accomplished the roll-off of the first 10,000 cobots
from its production line
We were selected as the Intellectual Property Advantage Enterprise (ᗆପ
ᛆᎴැΆุ )
2023 We led the national key R&D program of Multi-Robot Flexible Integrated
Manufacturing System with Power Battery Group and Application Demonstration
(ණϓႡிӻ୕ʿᏐͪ͜ᇍ )
We launched Magician E6, a desktop-level six-axis cobot equipped with
industrial-grade hardware specifically designed for education and research, and a
new generation of CR Series models
Our high-performance smart cobot project was appraised as achieving
international advanced standards, of which the human-robot interaction
technology based on e-skin admittance control was appraised as achieving the
world’s leading level
We participated in formulating the national standards for Integrated Robot Joint
Performance and Test Methods (ج)
2024 We were recognized as Guangdong Province Single Champion Enterprise of
Manufacturing Industry (Άุ )
We launched an AI-empowered cobot platform, X-Trainer
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OUR COMPANY
Our Company’s Early Development
On July 30, 2015, our Company was established as a limited liability company under the laws of the
PRC by Mr. Liu, Mr. Lang Xulin, Mr. Wu Zhiwen, Mr. Zhao Xiaodong (؇Mr. Xu Baoteng (ᘒ
ᙜ) and Mr. Chen Qingliang ( ௓ᅅԄ), with a registered capital of RMB5.0 million. Upon incorporation,
our Company was owned by Mr. Liu, Mr. Lang Xulin, Mr. Wu Zhiwen, Mr. Zhao Xiaodong, Mr. Xu
Baoteng and Mr. Chen Qingliang as to 75.00%, 5.00%, 5.00%, 5.00%, 5.00% and 5.00%, respectively.
Mr. Zhao Xiaodong and Mr. Xu Baoteng were the business partners of Mr. Liu, Mr. Lang Xulin and Mr.
Wu Zhiwen, and Mr. Chen Qingliang was a financial investor. In November 2015, in order to devote more
time in their other businesses, Mr. Zhao Xiaodong and Mr. Xu Baoteng transferred their respective entire
equity interest in our Company to Mr. Liu and therefore ceased to be our Shareholders.
To fund our strategic growth and broaden our shareholder base, we have conducted several rounds of
pre-IPO investments since the incorporation of our Company. See “—Pre-IPO Investments” for details.
Joint Stock Reform of Our Company
On December 20, 2022, our then Shareholders, being our promoters, passed resolutions approving,
among others, the conversion of our Company into a joint stock company with limited liability under the
laws of the PRC. In accordance with an audit report of our Company issued by an independent
accountant, as of October 31, 2022, the audited net asset value of our Company was RMB530,409,805.10,
among which, RMB360,000,000 was converted into 360,000,000 Shares with a nominal value of
RMB1.00 each and the remaining RMB170,409,805.10 was converted into capital reserve. Our Shares
upon conversion were subscribed for by our then Shareholders in proportion to their respective equity
interest in our Company immediately before the conversion. The joint stock reform was completed on
December 28, 2022.
OUR PRINCIPAL SUBSIDIARIES
The following entities were our subsidiaries which made material contribution to our results of
operation during the Track Record Period.
Name
Place of
incorporation
Date of
incorporation Principal business activities
Qingdao Yuejiang Intelligence
Technology Co., Ltd.
(ʮ̡ )....
PRC February 27,
2020
Manufacture of
collaborative robots
Qingdao Yuejiang Robotics Co., Ltd.
(ʮ̡ ) ......
PRC April 26, 2020 Holding the land for
production base
Rizhao Yuejiang Intelligence
Technology Co., Ltd.
(ʮ̡ )..
PRC October 21, 2020 Manufacture of
collaborative robots
HISTORY AND CORPORATE STRUCTURE
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MATERIAL ACQUISITIONS AND DISPOSALS
During the Track Record Period and up to the Latest Practicable Date, we did not conduct any
material acquisition or disposal.
PRE-IPO INVESTMENTS
Principal Terms of the Pre-IPO Investments
The table below summarizes the principal terms of the pre-IPO investments:
Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Early Investment (Pre-money valuation: RMB10.0 million; Post-money valuation: RMB10.0 million)
Equity Transfer
Shenzhen Higgs Zhongchuang
Technology Co., Ltd.
(ʮ̡ )
(“Higgs”) ....................
August 8,
2015
August 14,
2015
250,000
(5) 0.5 million 0.06 99.67
Angel Investments (Pre-money valuation: RMB133.5 million; Post-money valuation: RMB150.0 million (1) )
Equity Subscription
Hangzhou Daosheng Investment
Partnership (Limited Partnership)
(ҳ༟ΥྫΆุ
Υྫ)
(“Hangzhou Daosheng”) .........
December
31, 2015
December
29, 2015
77,248 2.1 million 0.75 95.91
Zhuhai Tongdao Qichuang Angel
Investment Partnership
(Limited Partnership)
(मऎΝ༸ᄁ௴˂Դҳ༟
Υྫ)
(“Zhuhai Tongdao”) ............
December
31, 2015
March 28,
2016
77,248 2.1 million 0.75 95.91
Hangzhou Junyi Venture
Capital Partnership
(ψё๐௴ุҳ༟
Υྫ)
(“Hangzhou Junyi”) ............
December
31, 2015
January 22,
2016
140,449 3.8 million 0.75 95.91
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Shanghai Leili Technology Venture
Capital Center (Limited Partnership)
(Ҧ௴ุҳ༟ʕː
Υྫ) (“Shanghai Leili”) . . .
December
31, 2015
September
26, 2016
154,494 4.1 million 0.75 95.91
Shenzhen Capital Group Co., Ltd.
(ʮ̡ )
(“SCGC”) ...................
December
31, 2015
January 21,
2016
168,539 4.5 million 0.75 95.91
Series A Investments (Pre-money valuation: RMB348.0 million; Post-money valuation: RMB400.0 million
(1) )
Equity Subscription
Ningbo Meishan Bonded Port Area
Tongban Investment Management
Partnership (Limited Partnership)
(೼ಥਜΝМҳ༟၍ଣΥ
Υྫ)
(“Ningbo Tongban”) ............
April 11,
2017
April 24,
2017
387,447 24.0 million 1.73 90.56
Qianhai Equity Investment Fund
(Limited Partnership)
(Υྫ)
(“Qianhai Equity”)
(15) ..........
April 11,
2017
April 24,
2017
258,298 16.0 million 1.73 90.56
Shenzhen Hongtu Chuangke
Venture Capital Partnership
(Limited Partnership)
(௴ุҳ༟
Υྫ)
(“Hongtu Chuangke”) ...........
April 11,
2017
April 26,
2017
113,005 7.0 million 1.73 90.56
SCGC ........................ April 11,
2017
April 26,
2017
80,718 5.0 million 1.73 90.56
Hangzhou Daosheng ............. December
12, 2017
April 18,
2017
55,615
(5) 3.4 million 1.73 90.56
Zhuhai Tongdao ................ December
12, 2017
May 2, 2017 11,543 (5) 0.7 million 1.73 90.56
Qinmo LP (14) ................... January 2,
2018
April 26,
2023
171,400 (5) 5.5 million 0.90 95.09
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Series A+ Investments (Pre-money valuation: RMB800.0 million; Post-money valuation: RMB852.0 million (1) )
Equity Subscription
Shenzhen Greenpine Growth Equity
Investment Partnership
(Limited Partnership)
(ᛆҳ༟
Υྫ)
(“Greenpine Growth”) ..........
May 23,
2018
June 4,
2018
419,735 52.0 million 3.46 81.01
Equity Transfer
Greenpine Growth ............... June 28,
2018
August 2,
2018
206,315
(6) 18.0 million 2.44 86.68
Series B Investments (Pre-money valuation: RMB852.0 million; Post-money valuation: RMB924.0 million (1) )
Equity Subscription
Shenzhen Nanshan Hongtu Equity
Investment Fund Partnership
(Limited Partnership)
(ږ
Υྫ)
(“Nanshan Hongtu”) ............
March 6,
2020
April 3,
2020
183,527 21.6 million 3.29 82.04
SCGC ........................ March 6,
2020
April 2,
2020
45,882 5.4 million 3.29 82.04
Zhongyuan Qianhai Equity Investment
Fund (Limited Partnership)
(ږ
Υྫ) (“Zhongyuan
Qianhai”)
(15) .................
March 6,
2020
April 1,
2020
76,470 9.0 million 3.29 82.04
Qianhai Equity (15) ............... March 6,
2020
April 1,
2020
229,409 27.0 million 3.29 82.04
Xizang Xinxingrong Venture
Capital Co., Ltd.
(ʮ̡ )
(“Xizang Xinxingrong”) .........
March 6,
2020
March 26,
2020
76,470 9.0 million 3.29 82.04
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Equity Transfer
Nanshan Hongtu ................ March 16,
2020
April 30,
2020
47,106
(5) 2.4 million 1.42 92.25
SCGC ........................ March 16,
2020
July 29,
2020
11,776 (5) 0.6 million 1.42 92.25
Zhongyuan Qianhai .............. March 16,
2020
June 18,
2020
19,627 (5) 1.0 million 1.42 92.25
Qianhai Equity (15) ............... March 16,
2020
June 18,
2020
58,882 (7) 3.0 million 1.42 92.25
Xizang Xinxingrong ............. March 16,
2020
April 16,
2020
19,627 (8) 1.0 million 1.42 92.25
Series C Investments (Pre-money valuation: RMB1,391.0 million; Post-money valuation: RMB1,650.0 million (1) )
Equity Subscription
CICC Qizhi (Shanghai) Private
Equity Investment Center L.P.
(ᛆҳ༟ʕː
Υྫ) (“CICC Qizhi”) .....
January 12,
2021
January 22,
2021
451,525 80.0 million 4.95 72.98
Shanghai Shizhineng Investment
Management Co., Ltd.
(ʮ̡ )
(“Shanghai Shizhineng”) ........
January 12,
2021
January 17,
2021
28,220 5.0 million 4.95 72.98
Wuxi Chanfa Trade in Service
Investment Fund Partnership
(Limited Partnership)
(ږ
Υྫ)
(“Wuxi Chanfa”) ..............
January 12,
2021
January 15,
2021
169,322 30.0 million 4.95 72.98
CRRC (Qingdao) Technology
Innovation Venture Capital
Partnership (Limited Partnership)
(ᛆ
Υྫ)
(“CRRC VC”) ................
January 12,
2021
January 22,
2021
272,044 48.2 million 4.95 72.98
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Rongyuan (Tianjin) Venture Capital
Partnership (Limited Partnership)
(௴ุҳ༟Υྫ
Υྫ) (“Rongyuan
Tianjin”) ....................
January 12,
2021
January 22,
2021
10,159 1.8 million 4.95 72.98
Shenzhen Weijia Investment
Enterprise (Limited Partnership) ( ଉ
Υྫ)
(“Shenzhen Weijia”) ............
January 12,
2021
January 19,
2021
50,797 9.0 million 4.95 72.98
Gongqingcheng Shanban Xingyuan
Investment Partnership (Limited
Partnership) (ʩҳ༟
Υྫ)
(“Gongqingcheng Shanban”) ......
January 12,
2021
January 25,
2021
28,220 5.0 million 4.95 72.98
Wuxi Yunhui Internet of Things
Investment Management Partnership
(Limited Partnership)
(ᑌၣҳ༟၍ଣΥྫΆุ
Υྫ)
(“Wuxi Yunhui”) ..............
January 12,
2021
January 19,
2021
169,322 30.0 million 4.95 72.98
Wenrun Zhenxin No.1 (Zhuhai) Equity
Investment Fund Partnership
(Limited Partnership)
(ఠ໮मऎ
ΥྫΆุ
Υྫ)
(“Wenrun Zhenxin”) ............
January 12,
2021
January 19,
2021
276,785 49.0 million 4.95 72.98
Zhuhai Hengqin Qichuang Gongxiang
Venture Capital Fund Partnership
(Limited Partnership) ( मऎዑೞᄁ
ΥྫΆุϞ
Υྫ) (“Hengqin Qichuang”) . . .
January 12,
2021
January 19,
2021
5,418 0.96 million 4.95 72.98
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Series C+ Investments (Pre-money valuation: RMB2,062.5 million; Post-money valuation: RMB2,112.5 million (1) )
Equity Subscription
Ningbo Zhuoyuan Yujiang Equity
Investment Partnership (Limited
Partnership) (ՙ঺
ᛆҳ༟ΥྫΆุ
Υྫ) (“Ningbo Zhuoyuan”)
March 31,
2021
May 8,
2021
90,305 20.0 million 6.18 66.27
Qingdao Hailian Zhongzheng
Investment Enterprise (Limited
Partnership)
(ऎᑌʕ͍ҳ༟Άุ
Υྫ) (“Hailian
Zhongzheng”) ................
March 31,
2021
April 22,
2021
45,153 10.0 million 6.18 66.27
Shandong Huarong Tianze Investment
Management Center (Limited
Partnership)
(ࠢ
Υྫ) (“Shandong Huarong”) ....
March 31,
2021
April 15,
2021
45,153 10.0 million 6.18 66.27
Shenzhen Yanxi Management
Consulting Partnership (Limited
Partnership)
(ଉέԊᒌ၍ଣፔ༔Υྫ
Υྫ)
(“Shenzhen Yanxi”) ............
March 31,
2021
May 14,
2021
45,153 10.0 million 6.18 66.27
Series D Investments (Pre-money valuation: RMB3,350.0 million; Post-money valuation: RMB3,480.0 million
(1) )
Equity Subscription
China Internet Investment Fund
(Limited Partnership)
(ږ
Υྫ) (“Internet
Investment”) .................
June 13,
2022
June 20,
2022
370,150 130.0 million 9.81 46.45
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s)
Date of
contract
Date of
settlement
Registered
capital of our
Company
subscribed
for/acquired Consideration
Cost per
Share
paid (2)(3)
Discount
to the
Offer
Price (4)
(RMB) (RMB) (RMB) (%)
Series D+ Investments (Pre-money valuation: RMB3,480 million; Post-money valuation: RMB3,530.9 million (1) )
Equity Subscription
Shenzhen Qianfan Qihang No.1
Private Equity Investment Fund
Partnership (Limited Partnership)
(ᛆҳ༟
Υྫ)
(“Shenzhen Qianfan”) ..........
August 25,
2022
September
16, 2022
142,365 50.0 million 9.81 46.45
Haikou Guoying Junhe Enterprise
Management Partnership
(Limited Partnership)
(ёձΆุ၍ଣ
Υྫ)
(“Haikou Guoying”) ............
August 25,
2022
September
16, 2022
2,449 0.9 million 9.81 46.45
Equity Transfer
Zhuhai Jiufeite Jiusheng Equity
Investment Fund Partnership
(Limited Partnership)
(ᛆҳ༟
Υྫ)
(“Zhuhai Jiufeite”) .............
October 12,
2022
October 26,
2022
71,182
(5) 25.0 million 9.81 46.45
Mituo Zhiyue (Zibo) Equity
Investment Partnership
(Limited Partnership)
(ᛆҳ༟
Υྫ)
(“Mituo Zhiyue”) ..............
October 12,
2022
October 28,
2022
42,710
(9) 15.0 million 9.81 46.45
December
14, 2022
December
19, 2022
20,107 (10) 5.0 million 6.94 62.12
Mr. Liu Dan ( ᄎʗ) .............. December
14, 2022
December
20, 2022
99,765 (11) 24.8 million 6.94 62.12
Ms. Yin Guofeng ( ʙ਷ჾ) ......... December
14, 2022
December
19, 2022
12,064 (12) 3.0 million 6.94 62.12
Mr. Liu Simeng (഼) .......... December
14, 2022
December
19, 2022
20,107 (13) 5.0 million 6.94 62.12
HISTORY AND CORPORATE STRUCTURE
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(1) The post-money valuation is calculated by dividing the total consideration of equity subscriptions under the relevant
round of the pre-IPO investment by the percentage of the new subscribed equity interest in the total registered capital
of our Company at the relevant time. The pre-money valuation is calculated by excluding the total consideration of
equity subscriptions from the post-money valuation under the relevant round of the pre-IPO investment. The valuation
of our Company has been increasing along with our rapid business development.
(2) The cost per Share presented in the table has been adjusted to take into account the enlarged registered capital of our
Company as a result of the joint stock reform carried out in December 2022. The amount is arrived at by dividing the
total consideration by the total number of Shares to be converted from the registered capital held by the respective
investors as a result of the joint stock reform and their respective subscriptions or purchases.
(3) Under certain transfers of equity interest between our investors, the relevant investors considered various factors, such
as timing of the transaction, past or present relationships between the parties and their respective bargaining power in
the negotiations when determining the consideration, in addition to the then valuation of our Company, and thus agreed
on a discount to the then valuation.
(4) The discount to the Offer Price is calculated based on the assumption that the Offer Price is HK$19.80 per H Share,
being the mid-point of the indicative Offer Price range of HK$18.80 to HK$20.80 per H Share, and that the
Over-allotment Option is not exercised.
(5) The equity interest was transferred from Mr. Liu and, with respect to the equity interest held by Higgs only,
subsequently repurchased by Mr. Liu.
(6) The equity interest was transferred from Mr. Liu, Mr. Chen Qingliang and Qinmo LP.
(7) The equity interest was transferred from Mr. Liu, Mr. Lang Xulin and Mr. Wu Zhiwen.
(8) The equity interest was transferred from Mr. Wu Zhiwen.
(9) The equity interest was transferred from SCGC and Hongtu Chuangke.
(10) The equity interest was transferred from Greenpine Growth.
(11) The equity interest was transferred from Shanghai Leili and Gongqingcheng Shanban. Upon the completion of the
equity transfer, Shanghai Leili and Gongqingcheng Shanban ceased to be our Shareholder.
(12) The equity interest was transferred from Gongqingcheng Shanban and Zhuhai Tongdao. Upon the completion of the
equity transfer, Gongqingcheng Shanban ceased to be our Shareholder.
(13) The equity interest was transferred from Zhuhai Tongdao.
(14) Qinmo LP is a shareholding platform of our certain financial investors and is owned by its limited partners, namely Mr.
Lin Yongyi (ᆇ), Mr. Cao Jiajun (ڲMr. Zhang Tao ( ੵᏹ), Ms. Chen Qiyun ( ௓઼ථ), Ms. Fan Lin ( ᅾ೙)
and Zhejiang Mituo Investment Co., Ltd. (ʮ̡ ), as to 15.99%, 5.84%, 33.59%, 16.80%, 16.80%
and 10.31%, respectively. In order to consolidate control and voting rights in our Company, Mr. Liu and such financial
investors, all of which are independent third parties, have agreed that, Mr. Liu serves as the sole general partner of
Qinmo LP who holds 0.67% of the partnership interest and exercises the voting rights held by Qinmo LP in our
Company.
(15) Qianhai Equity is controlled and managed by its general partner, Qianhai Ark Assets Management Co., Ltd. (ऎ˙Ћ
ʮ̡ ). Zhongyuan Qianhai is controlled and managed by its general partner, Qianhai Ark (Zhengzhou)
Venture Capital Management Enterprise (Limited Partnership) (Υྫ),
which is in turn controlled and managed by its general partner, Qianhai Ark Assets Management Co., Ltd.
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Reasons for Fluctuations in Valuation in the Pre-IPO Investments
The principal reasons for the material increases in our Company’s valuation in several rounds of our
pre-IPO investments are as follows:
(1) the increase in valuation from the Early Investment to the Angel Investments was mainly due to
the successful fundraising campaign we launched on Kickstarter for our first-generation
desktop-level cobot, DOBOT, which significantly raised our market visibility;
(2) the increase in valuation from the Angel Investments to the Series A Investments was mainly
due to the launch of the world’s first desktop high-precision and multi-functional smart cobot,
Magician, and light-weighted four-axis SCARA cobot, M1, which successfully expanded our
product portfolio and customer reach;
(3) the increase in valuation from the Series A Investments to the Series A+ Investments was
mainly due to the significant revenue growth after the launch of new products, which increased
from approximately RMB11.0 million for the year ended December 31, 2016 to approximately
RMB43.2 million for the year ended December 31, 2017 according to our Company’s financial
statements, indicating tremendous commercialization potential;
(4) the increase in valuation from the Series B Investments to the Series C Investments was mainly
due to the launch of industrial-grade desktop-level four-axis cobot, MG400, indicating
tremendous commercialization potential;
(5) the increase in valuation from the Series C Investments to the Series C+ Investments was
mainly due to the production of our high-performance six-axis CR Series, which was well
received among our customers; and
(6) the increase in valuation from the Series C+ Investments to the Series D Investments was
mainly due to (a) our cooperation established with certain top-notch manufacturing
companies, and (b) the significant sales growth from industrial cobots.
There were no material fluctuations in our Company’s valuation (a) between the Series A+
Investments and the Series B Investments and (b) between the Series D Investments and the Series D+
Investments, respectively.
Use of Proceeds from the Pre-IPO Investments
The proceeds received by us from the pre-IPO investments which involved subscriptions of
increased registered capital of our Company amounted to approximately RMB682.5 million. As of June
30, 2024, the net proceeds from the pre-IPO investments had been fully untilized. The proceeds from the
pre-IPO investments have been utilized for our general operation and working capital purposes.
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Special Rights of Our Pre-IPO Investors
In connection with the pre-IPO investments, our Pre-IPO Investors were granted certain special
rights, including, among others, pre-emptive right, right of first refusal, right of co-sale, redemption
right, information right, anti-dilution right, and special rights in liquidation. In anticipation of the Global
Offering, all such special rights granted to our Pre-IPO Investors have been terminated in compliance
with Chapter 4.2 of the Guide.
Information regarding Our Principal Pre-IPO Investors
Set out below is a description of our Sophisticated Independent Investors (including Pathfinder SIIs)
and other principal Pre-IPO Investors (being sophisticated investors such as private equity funds and
corporations, and that have made meaningful investments in our Company (each holding more than
1.00% of our total issued and outstanding Shares immediately prior to the Global Offering)). Among our
Pre-IPO Investors, we have six Sophisticated Independent Investors, four of which respectively held
more than 3.0% of the total issued Shares of the Company as of the Latest Practicable Date. To the best
knowledge of our Directors, each of our Sophisticated Independent Investors and other principal Pre-IPO
Investors is independent from and not connected with any Director, chief executive or substantial
shareholder of our Company, or its subsidiaries, or any of their respective close associates, and each of
such Pre-IPO Investors is independent from each other unless as disclosed otherwise.
Our Pathfinder SIIs
SCGC, Nanshan Hongtu and Hongtu Chuangke (collectively the “SCGC Investors”)
SCGC is a limited liability company incorporated in the PRC, originally co-founded by State-owned
Assets Supervision and Management Commission of Shenzhen Municipal People’s Government ( ଉέ̹
ึ ), which still directly holds 28.20% equity interest in SCGC as its largest
shareholder, with a group of private partners in 1999. SCGC is now a state-owned and
independently-managed venture capital investment institution with a primary focus to invest in
innovative high-tech companies in the emerging industries in their start-up, growth or pre-IPO stage,
including but not limited to investments in IT, new media, healthcare, new energy, environment
protection, chemical engineering, new material, advanced manufacturing consumer goods. Other major
shareholders of SCGC include (1) Shenzhen Galaxy Real Estate Development Co., Ltd. (ή
ʮ̡ ), a company ultimately controlled by Mr. Huang Chulong ( රูᎲ), an independent
third party businessman, holding 20.00% equity interest in SCGC, (2) Shenzhen Capital Holdings Co.,
Ltd. (ʮ̡ ), which is wholly owned by the State-owned Assets Supervision and
Management Commission of Shenzhen Municipal People’s Government and holds 12.79% equity interest
in SCGC, and (3) Shanghai Dazhong Public Utilities (Group) Co., Ltd. (΅
ʮ̡ ), a company listed on the Stock Exchange (stock code: 1635) and the Shanghai Stock Exchange
(stock code: 600635), holding 10.80% equity interest in SCGC. Save as disclosed above, SCGC has no
other shareholder which individually holds more than 10% equity interest in SCGC. Nanshan Hongtu and
Hongtu Chuangke are funds in the form of limited partnership established under the laws of the PRC
whose general partners are Shenzhen Nanshan Hongtu Equity Investment Fund Management Co., Ltd. ( ଉ
ʮ̡ ) and Shenzhen Hongtu Chuangke Venture Capital
Management Co., Ltd. (ʮ̡ ), respectively. Shenzhen Nanshan
Hongtu Equity Investment Fund Management Co., Ltd. is ultimately controlled and wholly owned by
SCGC, and Shenzhen Hongtu Chuangke Venture Capital Management Co., Ltd. is ultimately controlled
and owned by SCGC as to 80%. Major limited partners of Nanshan Hongtu include (1) Shenzhen Hongtu
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Venture Capital Co., Ltd. (ʮ̡ ), a wholly-owned subsidiary of SCGC, holding
40% of the limited partnership interest in Nanshan Hongtu, and (2) Shenzhen FOF Investment Co., Ltd.
(ʮ̡ ) and Shenzhen Huitong Financial Holdings Fund Investment Co., Ltd.
(ʮ̡ ), each a local government investment platform in Shenzhen and
holding 35% and 14% of the limited partnership interest in Nanshan Hongtu. Save as disclosed above,
Nanshan Hongtu has no other limited partner which individually holds more than 10% limited
partnership interest in Nanshan Hongtu. Major limited partners of Hongtu Chuangke include (1)
Shenzhen FOF Investment Co., Ltd., holding 25% of the limited partnership interest in Hongtu
Chuangke, (2) Shenzhen Huitong Financial Holdings Fund Investment Co., Ltd., holding 22% of the
limited partnership interest in Hongtu Chuangke, and (3) Beijing Yongyang Taihe Investment Co. Ltd.
(ʮ̡ ), a subsidiary indirectly owned by Jing Brand Co. Ltd. (ʮ̡ )
as to 51%, which is in turn owned and controlled by Mr. Wu Shaoxun ( юˇ௸ ), an independent third
party, as to 90.0%, holding 12% of the limited partnership interest in Hongtu Chuangke. Save as
disclosed above, Hongtu Chuangke has no other limited partner which individually holds more than
10% limited partnership interest in Hongtu Chuangke.
As of the Latest Practicable Date, the SCGC Investors held approximately 6.05% of the total issued
share capital of our Company. The assets under management (“AUM”) of the SCGC Investors was more
than HK$15.0 billion as of June 30, 2015 (being a date not more than six months prior to the date on
which the definitive agreement for its earliest investment in our Company was signed), and
approximately RMB471.7 billion as of February 29, 2024, respectively. As SCGC is ultimately
responsible for the investment decisions of Nanshan Hongtu and Hongtu Chuangke, the different
platforms are purely different funds or entities ultimately managed by the same entity and should be
aggregated as one Pathfinder SII pursuant to Chapter 2.5 of the Guide. And as the AUM of SCGC meets
the threshold set out in Chapter 2.5 of the Guide, the SCGC Investors collectively qualify as a
Sophisticated Independent Investor. In compliance with Rule 18C.05 of the Listing Rules, the SCGC
Investors held approximately 6.05% and 6.05% of the total issued share capital of our Company, as of
June 26, 2024 (being the date of submission of the Company’s listing application) and June 26, 2023
(being the commencement date of the pre-application 12-month period), respectively.
Greenpine Growth
Greenpine Growth is a limited partnership established in the PRC, whose general partner is
Shenzhen Greenpine Growth Private Equity Fund Management Co., Ltd. (ږ
ʮ̡ ) (previously known as Shenzhen Greenpine Growth Fund Management Co., Ltd. ( ଉέ̹
ʮ̡ )). Shenzhen Greenpine Growth Private Equity Fund Management Co., Ltd.
is majority-owned by Mr. Li Wei ( ᄒਃ) and Ms. Cui Jingtao ( ੦ԯᏹ), who are also the beneficial owners
of Green Pine Capital Partners Co., Ltd. (ʮ̡ ). Major limited partners of
Greenpine Growth include (1) Shenzhen FOF Investment Co., Ltd. (ʮ̡ ), a
wholly-owned subsidiary of the Finance Bureau of Shenzhen Municipality (҅ ), holding
16.69% limited partnership interest in Greenpine Growth, and (2) China Merchants Securities Asset
Management Co., Ltd. (ʮ̡ ), a wholly-owned subsidiary of China Merchants
Securities Co., Ltd. (ʮ̡ ) whose shares are listed on the Stock Exchange (stock code:
6099) and the Shanghai Stock Exchange (stock code: 600999), holding 11.69% limited partnership
interest in Greenpine Growth. Greenpine Growth has 26 other limited partners each holding less than
10% limited partnership interest in Greenpine Growth. Greenpine Growth is principally engaged in
equity investment. Green Pine Capital Partners group consists of several operating entities and fund
entities including, among others, Green Pine Capital Partners Co., Ltd., Shenzhen Greenpine Growth
Private Equity Fund Management Co., Ltd. and Greenpine Growth, all of which are under the
management of the same management team of Green Pine Capital Partners Co., Ltd. led by Mr. Li Wei,
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and operated under the same brand name of “Green Pine Capital (ͫ༟͉ )” by investment managers and
operational staff assigned by Green Pine Capital Partners Co., Ltd. In addition, Greenpine Growth has an
investment decision committee which is the body responsible for making the investment decisions and
whose entire members are management team members of Green Pine Capital Partners Co., Ltd. Green
Pine Capital Partners group is an investment firm group with a primary focus on investing in early-stage
and growth-stage companies in digital technology, precision medicine and innovative materials
industries.
As of the Latest Practicable Date, Greenpine Growth held approximately 6.03% of the total issued
share capital of our Company. In light of the facts that the investment decision of Greenpine Growth is
controlled and managed by Green Pine Capital Partners Co., Ltd. and the AUM of Green Pine Capital
Partners Co., Ltd. was approximately RMB15.0 billion as of December 31, 2017 (being a date not more
than six months prior to the date on which Greenpine Growth signed the relevant definitive agreement for
their investment in our Company), and approximately RMB22.0 billion as of December 31, 2023,
respectively, which meets the threshold set out in Chapter 2.5 of the Guide, Greenpine Growth qualifies
as a Sophisticated Independent Investor. In compliance with Rule 18C.05 of the Listing Rules, Greenpine
Growth held approximately 6.03% and 6.03% of the total issued share capital of our Company, as of June
26, 2024 (being the date of submission of the Company’s listing application) and June 26, 2023 (being the
commencement date of the pre-application 12-month period), respectively.
Qianhai Equity
Qianhai Equity is a limited partnership established in the PRC and is controlled and managed by its
general partner, Qianhai Ark Assets Management Co., Ltd. (ʮ̡ ). Qianhai
Equity has 49 limited partners, the majority of which are government guiding funds, assets management
firms, large state-owned insurance companies and financial institutions, each holding less than 10%
limited partnership interest in Qianhai Equity. Qianhai Equity is principally engaged in equity
investment. Qianhai Ark Assets Management Co., Ltd. is a limited liability company established in the
PRC and is ultimately controlled by Mr. Jin Haitao ( ◽ऎᏹ), who is an independent third party and an
individual investor. Mr. Jin Haitao is currently the chairman of Qianhai Ark Assets Management Co., Ltd.
Qianhai Ark Assets Management Co., Ltd. is principally engaged in venture capital investment.
As of the Latest Practicable Date, Qianhai Equity held approximately 5.44% of the total issued share
capital of our Company. The AUM of Qianhai Equity was approximately RMB21.5 billion as of
December 31, 2016 (being a date not more than six months prior to the date on which Qianhai Equity
signed the relevant definitive agreement for its investment in our Company), and approximately
RMB28.5 billion as of December 31, 2023, respectively. As Qianhai Equity is a fund with AUM which
meets the threshold set out in Chapter 2.5 of the Guide, it qualifies as a Sophisticated Independent
Investor. In compliance with Rule 18C.05 of the Listing Rules, Qianhai Equity held approximately 5.44%
and 5.44% of the total issued share capital of our Company, as of June 26, 2024 (being the date of
submission of the Company’s listing application) and June 26, 2023 (being the commencement date of the
pre-application 12-month period), respectively.
CICC Qizhi
CICC Qizhi is a limited partnership established in the PRC, whose general partner is CICC Private
Equity Management Co., Ltd. (ʮ̡ ), which is a wholly-owned subsidiary of
China International Capital Corporation Limited (ʮ̡ ), an investment bank
whose shares are listed on the Shanghai Stock Exchange (stock code: 601995) and the Main Board of the
Stock Exchange (stock code: 3908). Major limited partners of CICC Qizhi include (1) Shanghai
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Greenland Equity Investment Management Co., Ltd. (ʮ̡ ), a company
ultimately controlled by Greenland Holdings Corporation Limited (ʮ̡ ) whose
shares are listed on the Shanghai Stock Exchange (stock code: 600606), holding 18.64% limited
partnership interest in CICC Qizhi, and (2) CICC Qirong (Xiamen) Equity Investment Fund Partnership
(Limited Partnership) (Υྫ), a limited partnership
managed by its general partner, CICC Capital Management Co., Ltd. (ʮ̡ ), which is
a wholly-owned subsidiary of China International Capital Corporation Limited, holding 14.26% limited
partnership interest in CICC Qizhi. CICC Qizhi has 38 other limited partners, each holding less than 10%
limited partnership interest in CICC Qizhi.
As of the Latest Practicable Date, CICC Qizhi held approximately 4.49% of the total issued share
capital of our Company. The AUM of China International Capital Corporation was approximately
RMB1,174.7 billion as of December 31, 2020 (being a date not more than six months prior to the date on
which CICC Qizhi signed the relevant definitive agreement for its investment in our Company), and
approximately RMB1,393.2 billion as of December 31, 2023, respectively. As the general partner that
manages CICC Qizhi is a wholly-owned subsidiary of China International Capital Corporation, whose
AUM meets the threshold set out in Chapter 2.5 of the Guide, and the investment decisions of CICC Qizhi
were ultimately managed and controlled by China International Capital Corporation, CICC Qizhi
qualifies as a Sophisticated Independent Investor. In compliance with Rule 18C.05 of the Listing Rules,
CICC Qizhi held approximately 4.49% and 4.49% of the total issued share capital of our Company, as of
June 26, 2024 (being the date of submission of the Company’s listing application) and June 26, 2023
(being the commencement date of the pre-application 12-month period), respectively.
Our Pathfinder SIIs, in aggregate, held approximately 22.01% and 22.01% of the total issued share
capital of the Company, as of June 26, 2024 (being the date of submission of the Company’s listing
application) and June 26, 2023 (being the commencement date of the pre-application 12-month period),
respectively.
Our Other Sophisticated Independent Investors
Internet Investment
Internet Investment is an equity investment fund established in the form of limited partnership under
the laws of the PRC with a primary focus to invest in the Internet sector including basic and key Internet
technologies and facilities, network security, network information services, cloud computing, big data,
artificial intelligence, industrial digitalization, and controlled and managed by its general partner, China
Internet Investment Fund Management Co., Ltd. (ʮ̡ ), which is
controlled and owned by Zhongwang Xintong (Beijing) Holding Co., Ltd. (ʮ
̡) as to 40%. Zhongwang Xintong (Beijing) Holding Co., Ltd. is a wholly-owned subsidiary of the
National Computer Network and Information Security Management Center (τΌ
၍ଣʕː ). Major limited partners of Internet Investment include (1) ICBC Credit Suisse Investment
Management Co., Ltd. (ʮ̡ ), a wholly-owned subsidiary of ICBC Credit Suisse
Asset Management Company Limited (ʮ ̡ ), which is an asset management firm
controlled and owned as to 80% by the Industrial and Commercial Bank of China Co., Ltd. ( ʕ਷ʈਠვ
ʮ̡ ), whose A shares listed on the Shanghai Stock Exchange (stock code: 601398) and H
shares listed on the Main Board of the Stock Exchange (stock code: 1398), with the remaining equity
interest owned by Credit Suisse Group AG. ICBC Credit Suisse Investment Management Co., Ltd. holds
33.22% of partnership interest in Internet Investment, (2) China Post Life Insurance Corporation Limited
(ʮ̡ ), a state-owned national life insurance company owned by China Post
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Group Co., Ltd. (ʮ̡ ), directly and indirectly, as to 75.01%. China Post Life
Insurance Corporation Limited holds 19.93% of the partnership interest in Internet Investment, and (3)
ABC-CA Asset Management Co., Ltd. (ʮ̡ ), a fund management firm indirectly
controlled and owned as to 51.7% by Agricultural Bank of China Co., Ltd. (ʮ̡ ),
whose A shares listed on the Shanghai Stock Exchange (stock code: 601288) and H shares listed on the
Main Board of the Stock Exchange (stock code: 1288). ABC-CA Asset Management Co., Ltd. holds
16.61% of the partnership interest in Internet Investment. Internet Investment has six other limited
partners, each holding less than 10% partnership interest in Internet Investment.
As of the Latest Practicable Date, Internet Investment held approximately 3.68% of the total issued
share capital of our Company. The AUM of Internet Investment was approximately HK$21.4 billion as of
December 31, 2021 (being a date not more than six months prior to the date on which Internet Investment
signed the relevant definitive agreement for its investment in our Company), and approximately HK$24.0
billion as of December 31, 2023, respectively. As Internet Investment is a fund with AUM which meets
the threshold set out in Chapter 2.5 of the Guide, it qualifies as a Sophisticated Independent Investor.
Wuxi Chanfa
Wuxi Chanfa is an equity investment fund in the form of limited partnership established under the
laws of the PRC and controlled and managed by its general partner, Shenzhen China Merchants Jinkui
Capital Management Co., Ltd. (ப΂ʮ̡ ), which is wholly owned by
China Merchants Capital Management Co., Ltd. (ப΂ʮ̡ ). China Merchants
Capital Management Co., Ltd. is wholly owned by China Merchants Capital Investment Co., Ltd. (ਠ҅
ப΂ʮ̡ ), a joint venture held by China Merchants Financial Holdings Co., Ltd. (ਠ҅
ʮ̡ ) and GLP Capital Investment 5 (HK) Limited as to 50% and 50%, respectively. China
Merchants Financial Holdings Co., Ltd. is wholly owned by China Merchants Steam Navigation
Company Limited (ʮ̡ ), a wholly-owned subsidiary of China Merchants Group
Limited (ʮ̡ ), which in turn is wholly owned by the State Council of the People’s
Republic of China ( ʕശɛ͏΍ձ਷਷ਕ৫ ). GLP Capital Investment 5 (HK) Limited is ultimately
controlled by GLP Pte. Ltd. (౶ණྠ ), an independent third party, which is a leading global industrial
services and investment company with a focus on supply chain, big data, renewable energy and related
infrastructure. China Merchants Capital Investment Co., Ltd. focuses on investing in areas including new
energy, deep tech and technology, life sciences and modernised services. Major limited partners of Wuxi
Chanfa include (1) Wuxi Industrial Development Group Co., Ltd. (ʮ̡ ), which
is controlled and owned, directly and indirectly, as to 95.59% by State-owned Assets Supervision and
Administration Commission of People’s Government of Wuxi City (਷Ϟ༟ପ္ຖ၍ଣ
ึ). Wuxi Industrial Development Group Co., Ltd. holds 49.34% of partnership interest in Wuxi
Chanfa, (2) China Trade in Service Innovation Investment Fund (Limited Partnership) (௴อ೯
Υྫ), which is controlled by China Merchants Capital Management (Beijing) Co.,
Ltd. (ʮ̡) as the general partner, another subsidiary of China Merchants
Financial Holdings Co., Ltd. China Trade in Service Innovation Investment Fund (Limited Partnership) holds
19.74% of the partnership interest in Wuxi Chanfa, and (3) Wuxi Fengrun Investment Co., Ltd. ( ೌ፼ᔮᆗҳ
ʮ̡), which is ultimately majority-owned and controlled by State-owned Assets Supervision and
Administration Commission of Wuxi City. Wuxi Fengrun Investment Co., Ltd. holds 19.74% of the
partnership interest in Wuxi Chanfa. Wuxi Chanfa has three other limited partners, each holding less than
10% partnership interest in Wuxi Chanfa.
As of the Latest Practicable Date, Wuxi Chanfa held approximately 1.68% of the total issued share
capital of our Company. The AUM of China Merchants Capital Investment Co., Ltd. was approximately
RMB280.0 billion as of December 31, 2020 (being a date not more than six months prior to the date on
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which Wuxi Chanfa signed the relevant definitive agreement for their investment in our Company), and
approximately RMB300.0 billion as of December 31, 2023, respectively. As Wuxi Chanfa is a fund
ultimately controlled and managed by China Merchants Capital Investment Co., Ltd., whose AUM meets
the threshold set out in Chapter 2.5 of the Guide, and the investment decisions of Wuxi Chanfa were
ultimately managed and controlled by China Merchants Capital Investment Co., Ltd., Wuxi Chanfa
qualifies as a Sophisticated Independent Investor.
Our Other Principal Pre-IPO Investors
Wenrun Zhenxin and Hengqin Qichuang (collectively the “Wens Investors”)
Wenrun Zhenxin and Hengqin Qichuang are limited partnership established under the laws of the
PRC. Wenrun Zhenxin is an equity investment fund controlled and managed by its general partner,
Guangdong Wens Investment Co., Ltd. (ʮ̡ ), and Henqing Qichuang is an equity
investment fund controlled by Guangdong Wens Investment Co., Ltd., which is a wholly-owned
subsidiary of Wens Foodstuff Group Co., Ltd. (ʮ̡ ), an animal husbandry
company whose shares are listed on the Shenzhen Stock Exchange (stock code: 300498). Guangdong
Wens Investment Co., Ltd. focuses on investing in the large consumer sector including agricultural food,
advanced manufacturing, robotics, electronic information, consumer electronics, pharmaceuticals, and
other fields.
CRRC VC
CRRC VC is a venture capital fund in a form of limited partnership established under the laws of the
PRC. CRRC VC is controlled and managed by its general partner, CRRC Guochuang (Beijing) Private
Fund Management Co., Ltd. (ʮ̡ ), which primarily focus on
investing in areas including new energy vehicles, environmental governance, hydrogen energy power,
intelligent manufacturing and super capacitors and is owned by CRRC Capital Management Co., Ltd. ( ʕ
ʮ̡ ), Guochuang Fund Management Co., Ltd. (ʮ̡ ) and Qingdao
Rongzheng Enterprise Consulting Management Partnership (Limited Partnership) (ፄ͍Άุፔ༔၍
Υྫ) as to 45%, 45% and 10%, respectively. CRRC Capital Management Co., Ltd. is
a wholly-owned subsidiary of CRRC Corporation Limited, a rolling stock manufacturers whose shares
are listed on the Shanghai Stock Exchange (stock code: 601766) and the Main Board of the Stock
Exchange (stock code: 1766). Guochuang Fund Management Co., Ltd. is controlled and owned by
Aerospace Investment Holdings Co., Ltd. (ʮ̡ ) as to 60.53%, which is in turn
controlled and owned by its single largest shareholder, China Aerospace Science and Technology Group
Corporation (ʮ̡ ) as to 20.68%, a state-owned enterprise principally engaged in
the manufacturing of railroads, ships, aerospace and other transportation equipment and wholly owned by
the State-owned Assets Supervision and Administration Commission of the State Council of the PRC.
Most of the other 23 shareholders of Aerospace Investment Holdings Co., Ltd. are state-owned
enterprises with each holding less than 20% of share capital in Aerospace Investment Holdings Co., Ltd.
Ningbo Tongban
Ningbo Tongban is a limited partnership established under the laws of the PRC, which is principally
engaged in equity investment. Ningbo Tongban is owned by Mr. Xiang Guanglong ( ධΈඤ), Mr. Li
Zhirong ( ҽқ࿲) and Mr. Wang Chengshu ( ˮϓᅹ) as to approximately 33.33%, 33.33% and 33.33%,
respectively.
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Hangzhou Daosheng and Zhuhai Tongdao
Hangzhou Daosheng and Zhuhai Tongdao are equity investment entities in a form of limited
partnership established under the laws of the PRC. Zhuhai Tongdao is controlled and managed by its
general partner, Mr. Wu Bin ( ю੸), and Hangzhou Daosheng is controlled and managed by its general
partner, Hangzhou Daosheng Investment Management Co., Ltd. (ʮ̡ ), which is
controlled and owned by Mr. Wu Bin as to 87%.
Shenzhen Qunda
Shenzhen Qunda Technology Partnership (Limited Partnership) (ࠢ
Υྫ) (“Shenzhen Qunda”) is an equity investment fund in a form of limited partnership established
under the laws of the PRC and controlled and managed by its general partner, Ms. Cai Wenjuan (ࢇ,)
who is an independent third party and an individual investor.
Wuxi Yunhui
Wuxi Yunhui is an equity investment fund in a form of limited partnership established under the laws
of the PRC and controlled and managed by its general partner, Dongtai Yunchang Investment
Management Partnership (Limited Partnership) (Υྫ), which is
controlled and managed by its general partner, Beijing Yunhui Private Equity Fund Management Co., Ltd.
(ʮ̡ ). Beijing Yunhui Private Equity Fund Management Co., Ltd. is owned
by Mr. Zhu Feng ( ϡቜ), Mr. Li Xing (݋Ms. Xiong Ashley ( ဤ⇴Ꮔ) and Mr. Duan Aimin (ฌ͏),
each an independent third party and an individual investor, as to 25%, 25%, 25% and 25%, respectively.
Hangzhou Junyi
Hangzhou Junyi is an equity investment fund in a form of limited partnership established under the
laws of the PRC and controlled and managed by its general partner, Mr. Zhang Wei (۾who is an
independent third party and an individual investor.
Ningbo Zhuoyuan and Hangzhou Shiwei
Ningbo Zhuoyuan and Hangzhou Shiwei Venture Investment Partnership (Limited Partnership) (؄
Υྫ) (“Hangzhou Shiwei”) are equity investment funds in a form of
limited partnership established under the laws of the PRC and controlled and managed by their respective
general partners, Hangzhou Mingxian Investment Management Co., Ltd. (ʮ̡ )
and Hangzhou Beifan Investment Management Co., Ltd. (ʮ̡ ). Hangzhou
Mingxian Investment Management Co., Ltd. is controlled by Mr. Zhang Jun (ࠏand Hangzhou Beifan
Investment Management Co., Ltd. is owned by Mr. Zhang Jun, Mr. Wang Lijie (؏Mr. Hu Wei (ߡ
⑸), Mr. Gu Hao ( ᚥख) and Ms. Sun Zhenzhen (ॆጲ) as to 40%, 25%, 25%, 5% and 5%, respectively.
Shenzhen Qianfan and Haikou Guoying (collectively the “Shenzhen Investment Holdings Investors”)
Shenzhen Qianfan and Haikou Guoying are equity investment funds in the form of limited
partnership established under the laws of the PRC. Shenzhen Qianfan is managed by its general partner
and sole fund manager, Shenzhen Investment Holdings Capital Co., Ltd. (ʮ̡ )
(“Shenzhen Investment Holdings”). According to the partnership agreement of Shenzhen Qianfan,
Shenzhen Investment Holdings is responsible for performing the partnership business of Shenzhen
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Qianfan, and ABC Energy Investment Fund Management Co., Ltd. (ࠢ
ʮ̡), the other general partner of Shenzhen Qianfan, acts in concert with Shenzhen Investment
Holdings, when, together with Shenzhen Investment Holdings, representing Shenzhen Qianfan to
exercise the Shareholder’s rights (including voting rights in the general meeting of our Company).
Haikou Guoying is controlled and managed by its general partner, Shenzhen Investment Holdings.
Shenzhen Investment Holdings is a wholly-owned subsidiary of Shenzhen Investment Holdings Company
Limited, which in turn is wholly owned by the State-owned Assets Supervision and Administration
Commission of People’s Government of Shenzhen City (ึ ).
Shenzhen Investment Holdings Company Limited focuses on investing in technology finance, technology
parks, emerging industries and high-end service industries. ABC Energy Investment Fund Management
Co., Ltd. is indirectly wholly-owned by Agricultural Bank of China, a commercial bank whose shares are
listed on the Shanghai Stock Exchange (stock code: 601288) and the Main Board of the Stock Exchange
(stock code: 1288).
Meaningful Investment from Sophisticated Independent Investors
We have received investments from four Pathfinder SIIs, namely the SCGC Investors, Greenpine
Growth, Qianhai Equity and CICC Qizhi, each having invested in the Group for at least 12 months prior
to the first submission of our listing application to the Stock Exchange for the purpose of the Global
Offering. In accordance with Chapter 2.5 of the Guide, each of the SCGC Investors, Greenpine Growth,
Qianhai Equity and CICC Qizhi held more than 3%, and in aggregate more than 10%, of the issued share
capital of our Company as of the date of our listing application and throughout the pre-application
12-months period. For details of the shareholding percentage in our Company’s share capital of each of
the Sophisticated Independent Investors, see “—Capitalization of Our Company.”
As of the Latest Practicable Date, our Sophisticated Independent Investors held, in aggregate,
approximately 27.37% in the total issued share capital of our Company. Upon the Listing, such
Sophisticated Independent Investors will hold, in aggregate, no less than 20% in the total issued share
capital of our Company, assuming that our expected market capitalization at the time of Listing will be
more than HK$6 billion but less than HK$15 billion.
Compliance with the Guide
Based on the documents provided by the Company relating to the pre-IPO investments, the Joint
Sponsors have confirmed that the pre-IPO investments are in compliance with the Chapter 4.2 of the
Guide.
PRC Legal Advisor’s Confirmation
As advised by our PRC Legal Advisor, the equity transfers and increases in the registered capital in
respect of our Company and our Company’s principal subsidiaries, as described above have been
completed and settled, and all regulatory approvals, registrations or filings have been granted in
accordance with PRC laws and regulations.
HISTORY AND CORPORATE STRUCTURE
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--- page 155 ---
LOCK-UP PERIOD
Pursuant to the applicable PRC law, within the 12 months following the Listing Date, all existing
Shareholders (including our Pre-IPO Investors) are prohibited from disposing of any of the Shares held
by them.
The following Shares will be subject to disposal restrictions pursuant to Rule 18C.14 of the Listing
Rules at the time of the Listing:
Name Capacity
Aggregate number of
Shares held immediately
following the
completion of the
Global Offering (1)
Aggregate ownership
percentage of
shareholding in the total
issued share capital of
our Company following
the completion of the
Global Offering (1) Lock-up period
Key persons and their close associates
M r .L i u ............ F ounder, chairman of our
Board, executive Director,
general manager and core
R&D team member
95,847,016 23.96
Commencing on the date
of this prospectus and
ending on expiry of
12 months from the
Listing Date
Yuejiang LP ......... Share incentive platform
controlled by Mr. Liu
12,599,991 3.15
Qinmo LP .......... Shareholding platform
controlled and managed
by Mr. Liu
3,441,999 0.86
Mr. Lang Xulin ...... Co-founder, executive
Director, chief scientist
and core R&D team
member
7,968,213 1.99
Mr. Wu Zhiwen ...... Co-founder 7,968,213 1.99
HISTORY AND CORPORATE STRUCTURE
– 146 –


--- page 156 ---
Name Capacity
Aggregate number of
Shares held immediately
following the
completion of the
Global Offering (1)
Aggregate ownership
percentage of
shareholding in the total
issued share capital of
our Company following
the completion of the
Global Offering (1) Lock-up period
Share Incentive Platforms
Lumo LP ........... Share incentive platform
where the Company’s
founder, executive
Directors, senior
management and core
R&D team members hold
partnership interest
14,897,259 3.72
Commencing on the date
of this prospectus and
ending on expiry of 12
months from the Listing
Date
Qimo LP ........... Share incentive platform
where the Company’s
founder, executive
Directors, senior
management and core
R&D team members hold
partnership interest
12,961,193 3.24
Chumo LP .......... Share incentive platform
where the Company’s
founder, executive
Directors, senior
management and core
R&D team members hold
partnership interest
11,633,873 2.91
HISTORY AND CORPORATE STRUCTURE
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--- page 157 ---
Name Capacity
Aggregate number of
Shares held immediately
following the
completion of the
Global Offering (1)
Aggregate ownership
percentage of
shareholding in the total
issued share capital of
our Company following
the completion of the
Global Offering (1) Lock-up period
Pathfinder SIIs
SCGC ............. P athfinder SII 10,352,962 2.59
Commencing on the date
of this prospectus and
ending on expiry of six
months from the Listing
Date
Nanshan Hongtu ...... P athfinder SII 8,258,657 2.06
Hongtu Chuangke ..... P athfinder SII 3,154,420 0.79
Greenpine Growth ..... P athfinder SII 21,698,003 5.42
Qianhai Equity ....... P athfinder SII 19,572,616 4.89
CICC Qizhi ......... P athfinder SII 16,168,502 4.04
Note:
(1) Assuming the Over-allotment Option is not exercised.
PUBLIC FLOAT
The 46,156,853 Domestic Shares that will not be converted into H Shares (representing
approximately 11.54% of our total issued Shares upon the Listing (assuming the Over-allotment Option is
not exercised)) will not be considered as part of the public float as such Domestic Shares will not be
converted into H Shares and will not be listed on the Stock Exchange following the completion of the
Global Offering and the Conversion of Domestic Shares into H Shares.
Of the 313,843,147 H Shares to be converted from Domestic Shares and listed on the Stock
Exchange following the Completion of the Global Offering and the Conversion of Domestic Shares into
H Shares:
(a) 130,688,032 H Shares representing approximately 32.67% of our total issued Shares upon the
Listing (assuming that the Over-allotment Option is not exercised)) will not be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules upon the Listing as
such H Shares are held by Mr. Liu, Yuejiang LP, Qinmo LP, Mr. Lang Xulin, Lumo LP (as
defined below), Qimo LP (as defined below) and Chumo LP (as defined below), the core
connected persons of our Company; and
(b) the remaining 183,155,115 H Shares (representing approximately 45.79% of our total issued
Shares upon the Listing (assuming the Over-allotment Option is not exercised)) will be
counted towards the public float for the purpose of Rule 8.08 of the Listing Rules after the
Listing as such Shareholders are not core connected persons of our Company upon the Listing
nor accustomed to take instructions from our Company’s core connected persons in relation to
the acquisition, disposal, voting or other disposition of their Shares and their acquisition of
Shares were not financed directly or indirectly by our Company’s core connected persons.
HISTORY AND CORPORATE STRUCTURE
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--- page 158 ---
See “Share Capital—Conversion of Domestic Shares into H Shares” for more details of the H Shares
to be converted from Domestic Shares and listed on the Stock Exchange following the completion of the
Global Offering and the Conversion of Domestic Shares into H Shares.
As a result, immediately upon completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, taking into account 40,000,000 H Shares to be offered pursuant to the Global
Offering (assuming the Over-allotment Option is not exercised), an aggregate of 223,155,115 H Shares
will count towards the public float of our Company, representing 55.79% of the total issued Shares of our
Company.
FREE FLOAT
Under Rule 18C.10 of the Listing Rules, a Specialist Technology Company must ensure that a
portion of the total number of its issued shares listed on the Stock Exchange with a market capitalization
of at least HK$600,000,000 are not subject to any disposal restrictions (whether under contract, the
Listing Rules, applicable laws or otherwise) at the time of listing.
It is expected that immediately following completion of the Listing, a market capitalization of
approximately HK$792.0 million of the H Shares listed on the Stock Exchange are not subject to such
disposal restrictions at the time of the Listing (assuming an Offer Price of HK$19.80 per Offer Share,
being the mid-point of the indicative Offer Price range, and the Over-allotment Option is not exercised).
Accordingly, our Company will be able to satisfy the requirements under Rule 18C.10 of the Listing
Rules.
SHARE INCENTIVE PLATFORMS
In recognition of the contributions of our key employees and to incentivize them to further promote
our development, we adopted several share incentive schemes from 2018 to 2024 (collectively, the “Share
Incentive Schemes”), to award the partnership interest in our share incentive platforms to the scheme
participants. None of such Share Incentive Schemes is subject to the provisions of Chapter 17 of the
Listing Rules. As of the Latest Practicable Date, Yuejiang LP, Shenzhen Lumo Consulting Partnership
(Limited Partnership) (Υྫ) (“Lumo LP”), Shenzhen Qimo Investment
Partnership (Limited Partnership) (Υྫ) (“Qimo LP”) and Shenzhen
Chumo Consulting Partnership (Limited Partnership) (Υྫ) (“Chumo
LP”) were established as our share incentive platforms. Lumo LP, Qimo LP and Chumo LP are controlled
by the same general partner, Mr. Liu Yang, and thus, together with Mr. Liu Yang, constitute a group of our
Shareholders.
According to the Share Incentive Schemes and the respective grant agreements, our certain
employees were granted awards and registered as the limited partners of relevant share incentive
platforms upon grants or exercise of their awards. All management and voting powers of the share
incentive platforms are exercised by their respective sole general partner, Mr. Liu or Mr. Liu Yang (a core
employee and the key customer manager of our Company) (as the case may be), according to the
respective partnership agreements, whereas the relevant employees as the limited partners of such share
incentive platforms are entitled to the economic interest.
HISTORY AND CORPORATE STRUCTURE
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--- page 159 ---
Yuejiang LP
Yuejiang LP was established as a limited partnership under the laws of the PRC on December 11,
2015. As of the Latest Practicable Date, Yuejiang LP held 3.50% of our Shares, and its partnership
structure was as follows:
Name Position
Capacity of
partnership interests
in Yuejiang LP
Approximate
percentage of
partnership interests
(%)
M r .L i u ........... Chairman, executive
Director and general
manager
General partner 53.07
Mr. Liu Zhufu
(ᄎ˴⨲) ........
Deputy general manager Limited partner 0.28
4 other persons ..... Existing and former employees Limited partner 46.65
Lumo LP
Lumo LP was established as a limited partnership under the laws of the PRC on December 8, 2022.
As of the Latest Practicable Date, Lumo LP held 4.14% of our Shares, and its partnership structure was as
follows:
Name Position
Capacity of
partnership interests
in Lumo LP
Approximate
percentage of
partnership interests
(%)
M r .L i uY a n g ....... K e y customer manager General partner 9.00
M r .L i u ........... Chairman, executive
Director and general
manager
Limited partner 3.70
Mr. Wang Yong
(ۇ...........)
Executive Director,
chief financial officer,
Board secretary and joint
company secretary
Limited partner 24.17
Ms. Wan Ying
(ຬ጑)...........
Supervisor Limited partner 0.06
Mr. Li Liuwei
(ҽᄎਃ).........
Supervisor Limited partner 0.23
Mr. Jiang Yu
(ρ)...........
Deputy general manger Limited partner 10.62
32 other persons .... Existing and former employees Limited partner 52.22
HISTORY AND CORPORATE STRUCTURE
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--- page 160 ---
Qimo LP
Qimo LP was established as a limited partnership under the laws of the PRC on December 11, 2018.
As of the Latest Practicable Date, Qimo LP held 3.60% of our Shares, and its partnership structure was as
follows:
Name Position
Capacity of
partnership interests
in Qimo LP
Approximate
percentage of
partnership interests
(%)
M r .L i uY a n g ........ K e y customer manager General partner 1.20
M r .L i u ............. Chairman, executive
Director and general
manager
Limited partner 65.07
Ms. Wan Ying
(ຬ጑) ............
Supervisor Limited partner 1.37
Mr. Li Liuwei
(ҽᄎਃ)..........
Supervisor Limited partner 1.96
42 other persons ..... Existing and former
employees and inheritors
of a former employee
Limited partner 30.40
Chumo LP
Chumo LP was established as a limited partnership under the laws of the PRC on December 8, 2022.
As of the Latest Practicable Date, Chumo LP held 3.23% of our Shares, and its partnership structure was
as follows:
Name Position
Capacity of
partnership interests
in Chumo LP
Approximate
percentage of
partnership interests
(%)
M r .L i uY a n g ........ K e y customer manager General partner 0.90
M r .L i u ............. Chairman, executive
Director and general
manager
Limited partner 7.72
Mr. Liu Zhufu
(ᄎ˴⨲) ..........
Deputy general manager Limited partner 29.51
38 other persons ..... Existing and former
employees
Limited partner 61.87
HISTORY AND CORPORATE STRUCTURE
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--- page 161 ---
CAPITALIZATION OF OUR COMPANY
The following table sets forth our shareholding structure as of the Latest Practicable Date and
immediately upon the Listing (assuming the Over-allotment Option is not exercised):
Name of Shareholder
Number of
Shares as of
the Latest
Practicable
Date
Ownership
percentage as
of the Latest
Practicable
Date
Number of
Shares upon
the Listing
Ownership
percentage
upon the
Listing
(%) (%)
Controlling Shareholders
M r .L i u ......................... 95,847,016 26.62 95,847,016 23.96
Yuejiang LP ..................... 12,599,991 3.50 12,599,991 3.15
Qinmo LP ...................... 3,441,999 0.96 3,441,999 0.86
Share Incentive Platforms
Lumo LP ........................ 14,897,259 4.14 14,897,259 3.72
Qimo LP ........................ 12,961,193 3.60 12,961,193 3.24
Chumo LP ....................... 11,633,873 3.23 11,633,873 2.91
SCGC Investors
SCGC .......................... 10,352,962 2.88 10,352,962 2.59
Nanshan Hongtu ................. 8,258,657 2.29 8,258,657 2.06
Hongtu Chuangke ................ 3,154,420 0.88 3,154,420 0.79
Greenpine Growth ................. 21,698,003 6.03 21,698,003 5.42
Qianhai Equity .................... 19,572,616 5.44 19,572,616 4.89
CICC Qizhi ....................... 16,168,502 4.49 16,168,502 4.04
Ningbo Tongban ................... 13,873,955 3.85 13,873,955 3.47
Internet Investment ................ 13,254,573 3.68 13,254,573 3.31
Wens Investors
Wenrun Zhenxin ................. 9,911,298 2.75 9,911,298 2.48
Hengqin Qichuang ............... 194,011 0.05 194,011 0.05
CRRC VC ........................ 9,741,529 2.71 9,741,529 2.44
Mr. Lang Xulin .................... 7,968,213 2.21 7,968,213 1.99
Mr. Wu Zhiwen .................... 7,968,213 2.21 7,968,213 1.99
Hangzhou Daosheng and Zhuhai Tongdao
Hangzhou Daosheng ............. 4,757,645 1.32 4,757,645 1.19
Zhuhai Tongdao ................. 2,315,459 0.64 2,315,459 0.58
Shenzhen Qunda ................... 6,722,502 1.87 6,722,502 1.68
Wuxi Chanfa ...................... 6,063,193 1.68 6,063,193 1.52
Wuxi Yunhui ...................... 6,063,193 1.68 6,063,193 1.52
Shenzhen Investment Holdings Investors
Shenzhen Qianfan ................ 5,097,899 1.42 5,097,899 1.27
Haikou Guoying ................. 87,695 0.02 87,695 0.02
Hangzhou Junyi ................... 5,029,289 1.40 5,029,289 1.26
HISTORY AND CORPORATE STRUCTURE
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--- page 162 ---
Name of Shareholder
Number of
Shares as of
the Latest
Practicable
Date
Ownership
percentage as
of the Latest
Practicable
Date
Number of
Shares upon
the Listing
Ownership
percentage
upon the
Listing
(%) (%)
Ningbo Zhuoyuan and Hangzhou Shiwei
Ningbo Zhuoyuan ................ 3,233,700 0.90 3,233,700 0.81
Hangzhou Shiwei ................ 603,519 0.17 603,519 0.15
M r .L i uD a n ....................... 3,572,450 0.99 3,572,450 0.89
Zhongyuan Qianhai ................ 3,441,104 0.96 3,441,104 0.86
Xizang Xinxingrong ................ 3,441,104 0.96 3,441,104 0.86
Zhuhai Jiufeite .................... 2,548,932 0.71 2,548,932 0.64
Mituo Zhiyue ..................... 2,249,392 0.62 2,249,392 0.56
Leili
Ningbo Leili Technology
Entrepreneurship Investment
Center (Limited Partnership)
(Ҧ௴ุҳ༟ʕː
Υྫ)................... 1,408,211 0.39 1,408,211 0.35
Shenzhen Woying Venture Capital
Investment Center (Limited
Partnership) ( ଉέఅᙊ௴ุ
Υྫ) .......... 670,553 0.19 670,553 0.17
Shenzhen Weijia ................... 1,818,972 0.51 1,818,972 0.45
Hailian Zhongzheng ................ 1,616,868 0.45 1,616,868 0.40
Shandong Huarong ................. 1,616,868 0.45 1,616,868 0.40
Shenzhen Yanxi .................... 1,616,868 0.45 1,616,868 0.40
Shanghai Shizhineng ............... 1,010,520 0.28 1,010,520 0.25
Mr. Liu Simeng .................... 720,005 0.20 720,005 0.18
Ms. Yin Guofeng ................... 431,996 0.12 431,996 0.11
Rongyuan Tianjin .................. 363,780 0.10 363,780 0.09
Global Offering Shareholders ........ — — 40,000,000 10.00
Total ............................. 360,000,000 100.00 400,000,000 100.00
HISTORY AND CORPORATE STRUCTURE
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--- page 163 ---
PROPOSED A-SHARE LISTING
In view of the growing potential of stock market in the PRC, the Company entered into a tutoring
agreement ( Ⴞኬ՘ᙄ ) with China International Capital Corporation Limited (ʮ
̡) in preparation for the A-share listing application on the Shanghai Stock Exchange Science and
Technology Innovation Board (ؐand made a preliminary filing (ࣩ)
with the Shenzhen office of the CSRC, both in January 2023, which did not constitute a listing application
with the CSRC. To further expand our global business and considering that the Stock Exchange would
provide us with an international platform to access foreign capital and attract diverse overseas investors,
our Company voluntarily decided to pursue the Listing in Hong Kong in the first half of 2024. As of the
Latest Practicable Date, we had not filed any formal A-share listing application with any representative
office of the CSRC or received any material comments or inquiries from the CSRC or the Shanghai Stock
Exchange. The tutoring agreement between our Company and China International Capital Corporation
Limited was terminated in July 2024.
Our Directors confirmed that there are no other matters relating to the A-share listing plan that may
affect the Company’s suitability for listing on the Stock Exchange or that are required to be brought to the
attention of the Stock Exchange and investors.
HISTORY AND CORPORATE STRUCTURE
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--- page 164 ---
CORPORATE STRUCTURE
The following chart sets forth our corporate structure immediately prior to the Global Offering and the Conversion of Domestic Shares into H Shares:
Our Company
Qingdao Yuejiang
Intelligence Technology
Co., Ltd. (൳ᖛ౽ঐ
ʮ̡)
(PRC)
Rizhao Yuejiang
Intelligence Technology
Co., Ltd. (˚๫̹൳ᖛ
ʮ̡)
(PRC)
Shenzhen Qimo
Technology Co., Ltd.
(ʮ̡)
(PRC)
Yuejiang Intelligence
Robotics (Suzhou) Co.,
Ltd. (൳ᖛ౽ঐዚኜɛ
ʮ̡)
(PRC)
Qingdao Yuejiang
Robotics Co., Ltd.
(ʮ̡)
(PRC)
DOBOT HK LIMITED
(Hong Kong)
DOBOT JAPAN LLC
(Japan)
DOBOT NORTH
AMERICA LLC
(U.S.)
DOBOT Europe GmbH
(Germany)
DOBOT USA LLC
(U.S.)
Mr. Liu(1)
Yuejiang
LP(1)
SCGC
Investors(3)
Greenpine
Growth(4)
Qianhai
Equity(5)
CICC
Qizhi(6)
Ningbo
Tongban(7)
Internet
Investment(8)
Other
Shareholders(9)
Mr. Lang
XulinQinmo LP(1)
Qimo LP(2) Chumo LP(2)Lumo LP(2)
100% 100% 100% 100% 100%
100%
100%
100%
100% 100%
Controlling Shareholders
3.50% 26.62% 0.96% 4.14% 3.60% 3.23% 2.21% 6.05%
Mr. Wu
Zhiwen
2.21% 6.03% 5.44% 3.85% 4.49% 3.68% 23.99%
(1) Yuejiang LP and Qinmo LP are controlled by their general partner, Mr. Liu. See “—Share Incentive Platforms—Yuejiang LP” for the partnership struc ture of Yuejiang LP. See
“—Pre-IPO Investments—Principal Terms of the Pre-IPO Investments” for the partnership structure of Qinmo LP.
As of the Latest Practicable Date, 22.455% of the partnership interest in Yuejiang LP was held by a limited partner and former employee of our Company (t he “Disputing Former
Employee”). After his departure from our Company in March 2021, the Disputing Former Employee refused to transfer all of his partnership interest in Y uejiang LP to Mr. Liu or
HISTORY AND CORPORATE STRUCTURE
– 155 –


--- page 165 ---
any other person designated by Mr. Liu at a pre-agreed price in accordance with the terms of the relevant share incentive scheme. Our Company filed a law suit with the Primary
People’s Court of Shenzhen City Nanshan District (৫ ) in November 2023 and appealed to the Intermediate People’s Court of Shenzhen City ( ଉέ̹ʕॴɛ
৫) in June 2024, requesting the Disputing Former Employee to return his partnership interest in Yuejiang LP awarded for share incentive purpose to Mr. L iu and seeking for
an enforcement of such transfer of partnership interest. The Primary People’s Court of Shenzhen City Nanshan District and the Intermediate People’s Court of Shenzhen City
dismissed our Company’s motion on the basis of the lack of jurisdiction. In September 2024, our Company applied to the High People’s Court of Guangdong Province (৷
৫ ) for retrial and our application was accepted. The ruling by the High People’s Court of Guangdong Province was pending as of the Latest Practicable Dat e and is
expected to be granted in the first half of 2025. Our PRC Legal Advisor advises that (i) the Disputing Former Employee shall return his partnership inte rest in Yuejiang LP awarded
for share incentive purpose to Mr. Liu at a pre-agreed price at the request of our Company and in accordance with the terms of the relevant share incentiv e scheme, (ii) with respect
to the historical transfers of equity interest in our Company by Yuejiang LP to other share incentive platforms, the notification to and the consent by limited partners of Yuejiang LP
were not required for the purpose of effecting such transfers in accordance with the limited partnership agreement of Yuejiang LP, and (iii) even if th e court does not rule in favor
of us, the dispute between our Company and the Disputing Former Employee would not have an impact on the voting rights held by Yuejiang LP or Mr. Liu in the general meetings
of our Company, since the voting rights held by Yuejiang LP are wholly controlled by Mr. Liu as the general partner in accordance with the partnership ag reement of Yuejiang LP.
Based on the foregoing, our Directors are of the view that the dispute between our Company and the Disputing Former Employee would not adversely affect our Group’s operation,
management or financial position. Based on the due diligence performed by the Joint Sponsors, including but not limited to reviewing the PRC legal opi nion issued by the PRC
Legal Advisor and consulting with the PRC legal advisor to the Joint Sponsors in which they concur with the view of the PRC Legal Advisor, and reviewing t he partnership
agreement of Yuejiang LP, nothing has come to the Joint Sponsors’ attention that would reasonably cause it to cast doubt on the foregoing Directors’ vi ew in any material respect.
(2) Lumo LP, Qimo LP and Chumo LP are our share incentive platforms controlled by their general partner, Mr. Liu Yang, in accordance with the Share Incen tive Schemes. See
“—Share Incentive Platforms” for their respective partnership structure.
(3) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—SCGC Investors” for the shareholding s tructure of each of the SCGC
Investors.
(4) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—Greenpine Growth” for the shareholdin g structure of Greenpine
Growth.
(5) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—Qianhai Equity” for the shareholding s tructure of Qianhai Equity.
(6) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—CICC Qizhi” for the shareholding struc ture of CICC Qizhi.
(7) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Other Principal Pre-IPO Investors—Ningbo Tongban” for the shareholding structure of
Ningbo Tongban.
(8) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Other Sophisticated Independent Investors—Internet I nvestment” for the shareholding
structure of Internet Investment.
(9) As of the Latest Practicable Date, we had 28 other Shareholders who were also our Pre-IPO Investors each holding less than 3% shareholding of our Com pany.
See “—Capitalization of Our Company” for details.
HISTORY AND CORPORATE STRUCTURE
– 156 –


--- page 166 ---
The following chart sets forth our corporate structure immediately after the completion of the Global Offering and the Conversion of Domestic Shares
into H Shares, without taking into account any H Shares which may be issued upon the exercise of the Over-allotment Option:
Our Company
Qingdao Yuejiang
Intelligence Technology
Co., Ltd. (൳ᖛ౽ঐ
ʮ̡)
(PRC)
Rizhao Yuejiang
Intelligence Technology
Co., Ltd. (˚๫̹൳ᖛ
ʮ̡)
(PRC)
Shenzhen Qimo
Technology Co., Ltd.
(ʮ̡)
(PRC)
Yuejiang Intelligence
Robotics (Suzhou) Co.,
Ltd. (൳ᖛ౽ঐዚኜɛ
ʮ̡)
(PRC)
Qingdao Yuejiang
Robotics Co., Ltd.
(ʮ̡)
(PRC)
DOBOT HK LIMITED
(Hong Kong)
DOBOT JAPAN LLC
(Japan)
DOBOT NORTH
AMERICA LLC
(U.S.)
DOBOT Europe GmbH
(Germany)
DOBOT USA LLC
(U.S.)
Mr. Liu(1)
Yuejiang
LP(1)
SCGC
Investors(3)
Greenpine
Growth(4)
Qianhai
Equity(5)
CICC
Qizhi(6)
Ningbo
Tongban(7)
Internet
Investment(8)
Other
existing
Shareholders(9)
Global
Offering
Shareholders
Mr. Lang
XulinQinmo LP(1)
Qimo LP(2) Chumo LP(2)Lumo LP(2)
100% 100% 100% 100% 100%
100%
100%
100%
100% 100%
Controlling Shareholders
3.15% 23.96% 0.86% 3.72% 3.24% 2.91% 1.99% 5.44%
Mr. Wu
Zhiwen
1.99% 5.42% 4.89% 3.47% 4.04% 3.31% 21.59% 10.00%
(1)-(9) See notes to the corporate structure chart on pages 148 to 149.
HISTORY AND CORPORATE STRUCTURE
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OVERVIEW
We are one of leading companies that specializes in the development, manufacturing and
commercialization of collaborative robots, or commonly known as “cobots.” We are a top 2 player in the
global cobot industry and the No.1 player among all Chinese cobot companies, with a global market share
of 13.0% as measured by shipment volume in 2023, according to the CIC Report. The development of the
global cobot industry is at a nascent stage of development, whose market size accounted for less than 2%
of the global robot industry in terms of revenue in 2023. According to the same source, we rank seventh
in the global cobot industry with a global market share of 3.6% in terms of global revenue generated from
cobots in 2023. Leveraging our proprietary full-stack cobot development technologies and in-house
design and development of key components, we offer selections of cobots in payload capacity, axis model
and use case, addressing our customers’ diverse needs across a wide array of use cases. We focus on
industry innovation, particularly in cobot safety measures and AI capabilities, by introducing the flexible
e-skin technology, SafeSkin, and launching AI-empowered cobots underpinned by our AI cobot
empowering platform, X-Trainer. As of the Latest Practicable Date, we offered a total of 27 cobot models
in four series, catering to numerous use cases in manufacturing, retail, healthcare, STEAM education,
scientific research settings and many more.
Cobots are robots with operational robotic arms intended for direct human-robot interaction or
collaboration within a shared space or where humans and robots are operating in proximity. Originally
emerging as a supplement to the traditional industrial robots in industrial settings, cobots have quickly
expanded its application to other industry verticals including commercial sector for a wide array of use
cases, such as meal preparation, coffee making, unmanned retail, etc. Cobots offer a value proposition by
enabling humans and machines to work together seamlessly and safely, increasing productivity,
flexibility and quality across various industries. The cobot industry is currently in a stage of rapid
growth, propelled by technological breakthroughs integrating AI capabilities, economies of scale leading
to cost reductions, favorable government policies, as well as surging demand from industries grappling
with labor shortages and rising labor costs amid an aging population. The global cobot market size has
grown significantly from US$466.6 million in 2019 to US$1,039.5 million in 2023, at a CAGR of 22.2%,
and is expected to reach US$4,950.0 million by 2028, at a CAGR of 36.6% from 2023 to 2028. The
growth rate of the global cobot industry has significantly outpaced that of the traditional industrial robot
industry. The proliferation of AI technologies is expected to further accelerate the adoption of cobots in
more use cases. We believe we are well positioned to capture the substantial market opportunity.
Underpinned by our research and development capabilities, we stay at the forefront of the global
cobot industry. Guided by a forward-looking strategy and long-termist mindset, we are committed to
research and development efforts that drive sustainable growth and enduring impact. According to the
CIC Report, we are one of few global players with proprietary full-stack technologies spanning the entire
cobot development cycle, including cobot design and manufacturing, key components development,
controller system development, key algorithm formulation and iteration, versatile cobot deployment for
different tasks, and AI capabilities development. Our proprietary flexible e-skin technology, SafeSkin,
enables our cobots to detect approaching objects 15 cm away while operating a t a 1 m/s safety speed
during the human-robot interaction, four times the 0.25 m/s PRC national standard (based on the
comparison between our six-axis cobot models with a payload of 5 kg and GB 11291.1, a PRC national
standard for robots for industrial environments, which sets forth the safety requirements of 0.25 m/s),
according to the CIC Report. Our AI-empowered cobot platform, X-Trainer, boasts high-quality data
collection, low latency delivering an improvement in end-to-end response speed, and more efficient
generalized learning system. Capitalizing on our technology capabilities, we have built cobots with our
proprietary design that are safe, smart, nimble and robust.
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As of the Latest Practicable Date, we had assembled a research and development team of 140
industry experts and senior engineers in the robotics industry, accounting for over 25% of our workforce.
Our research and development expenses increased from RMB46.9 million in 2021 to RMB70.5 million in
2023, at a CAGR of 22.6%. As of the Latest Practicable Date, we had obtained 217 invention patents, 303
utility model patents, and 133 design patents, some of which have garnered industry awards and acclaim.
For example, we received the 24th China Patent Excellence Award for our patented collision detection
method, the 2023 Guangdong Patent Silver Award for our patented dynamics motion control method, and
the 2021 Shenzhen Science and Technology Patent Award for our patented high-precision desktop robot
structural design technology. Our human-robot interaction technology based on e-skin admittance control
has been acclaimed by an expert group from the China Machinery Industry Federation ( ʕ਷ዚ૛ʈุᑌ
Υึ) as internationally leading.
Translating this research and development prowess into products, we offer one of the most extensive
product portfolios in the global cobot industry, according to the CIC Report, catering to numerous use
cases in manufacturing, retail, healthcare, STEAM education, scientific research settings and many more.
The comprehensive product matrix allows us to meet specific customer needs by offering model
combinations with varying axis configurations, payload capacities, and performance requirements,
geared towards the specific production lines, processes, or use cases to ensure that cobots are optimally
utilized for their intended tasks, which in turn translates into cost savings and operational efficiency. Our
four-axis cobots, first launched in 2016, are built on proprietary patents that have enabled compact size,
integrated controller, and simple structure while maintaining high-performance standards. Our cobots
have been acclaimed domestically and internationally, receiving awards such as the China Red Star
Design Award (ᆤ ), the German iF Design Award ( ᅃ਷iFᆤ), the Red Dot Design
Award (ᆤ ), and the U.S. CES Innovation Award (਷CES ௴อᆤ), to name a few.
Our proactive endeavors in product commercialization and market expansion have contributed to
our revenue growth during the Track Record Period. Our revenue increased at a CAGR of 28.3% from
RMB174.3 million in 2021 to RMB286.7 million in 2023 and by 9.6% from RMB109.9 million in the six
months ended June 30, 2023 to RMB120.5 million in the six months ended June 30, 2024. Our export
volume of cobots has consistently ranked first in China for six consecutive years, according to the CIC
Report. During the Track Record Period, we sold a total of over 53,000 cobots globally. Our sales
network consists of direct sales and distributors with a global footprint in over 80 countries and regions,
including major overseas markets such as the United States, the European Union, Japan and Southeast
Asia. Our commercialization success is also validated by our clientele. With robust growth and
proprietary full-stack technology, we are well-positioned to capitalize on the market opportunity in the
global cobot industry.
COMPETITIVE STRENGTHS
We believe that the following competitive strengths contribute to our success and differentiate us
from our competitors.
Player at the Frontline of the Booming Cobot Industry
We are a company in the global cobot industry. Tracing back to a humble fundraising campaign on
Kickstarter in 2015, we have rapidly evolved into a top 2 player in the global cobot industry and the No.1
player among all Chinese cobot companies, with a global market share of 13.0% as measured by shipment
volume in 2023, according to the CIC Report. The development of the global cobot industry is at a
nascent stage of development, whose market size accounted for less than 2% of the global robot industry
in terms of revenue in 2023. According to the same source, we rank seventh in the global cobot industry
with a global market share of 3.6% in terms of global revenue generated from cobots in 2023. Today, we
are also among few in the global cobot industry, according to the same source, that possess proprietary
full-stack technologies covering all the key aspects in the cobot development cycle, including cobot
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design and manufacturing, key components development, controller system development, key algorithm
formulation and iteration, versatile cobot deployment for different tasks, and AI capabilities
development. Leveraging our full-stack technology capabilities, we have strategically launched a breadth
of product portfolio that covers the most extensive selections of cobots in the global cobot industry,
according to the CIC Report, in payload capacity ranging from 0.25kg to 20kg, axis models with four or
six axes, and use cases in manufacturing, retail, healthcare, STEAM education, scientific research
settings and many more, catering to our customers’ diverse needs. Our leadership is further reinforced by
the numerous pioneering technology innovations we have brought about, particularly in cobot safety
measures and AI capabilities. We were the first in the global cobot industry to apply non-contact collision
prevention technologies (ટᙃຠᅜཫԣҦஔ ) to cobots with our proprietary wearable flexible e-skin (
ͤᇮ ), SafeSkin, according to the CIC Report. Additionally, we were the first in the
global cobot industry to commercialize AI-empowered cobots by launching X-Trainer in April 2024,
according to the same source.
Benefiting from our technology capabilities and product strength, our cobots have gained
recognition from esteemed customers around the globe, some of which are Fortune 500 companies and
world-renowned universities. We have also secured all certifications for our products to enter major
overseas markets, and have consistently ranked No.1 among all Chinese cobot companies for six
consecutive years as measured by export volume since 2018, according to the CIC Report. Furthermore,
our leadership in the industry is showcased by numerous awards and recognitions we received, including,
to name a few, National Specialty and New Little Giant Enterprise (
ॴਖ਼ၚतอʃ̶ɛΆุ )
designated by Ministry of Industry and Information Technology of China in 2021, Intellectual Property
Advantage Enterprise (ᗆପᛆᎴැΆุ ) designated by China National Intellectual Property
Administration in 2022, and High-tech Enterprise ( ৷อҦஔΆุ ) designated by Shenzhen Science and
Technology Innovation Committee (ึ ), Shenzhen Municipal Finance Bureau ( ଉέ
̹ৌਕ҅ ) and State Administration of Taxation Shenzhen Municipal Taxation Bureau (೼ਕᐼ҅ଉ
έ̹೼ਕ҅ ).
We believe the cobot industry is on the cusp of explosive growth. Technology advancements have
made cobots more affordable and implementable, which has made them an increasingly attractive option
for enterprises of all sizes, regardless of their financial resources and technical expertise, according to the
CIC report. With the proliferation of AI technologies, cobots are expected to possess generalized learning
and become capable of handling more complex, adaptive functions, which will further drive customer
demand across various industries, according to the CIC Report. According to the same source, the global
cobot industry increased in terms of revenue from US$466.6 million in 2019 to US$1,039.5 million in
2023, at a CAGR of 22.2%, and is expected to reach US$4,950.0 million in 2028, at a CAGR of 36.6%
from 2023 to 2028. Leveraging our leadership in this booming industry, we believe we are well positioned
to capture the significant market growth opportunity.
Robust Research and Development Capabilities Guided by a Long-termist Mindset
Guided by a forward-looking strategy and long-termist mindset, our research and development
initiatives are geared towards sustainable growth and enduring impact. Capitalizing on our management’s
astute grasp of industry trends, we have cultivated long-term competitive advantages aligned with this
visionary approach. For example, despite the substantial upfront investment, we insist on in-house design
and development of key components including motors, encoders, servos, controllers and sensors. We
believe this strategy has allowed us to retain control over the design and quality of our key components,
eliminate reliance on external suppliers, and effectively reduce the production costs. Moreover, we have
established a modularized key component and software platform, achieving easy maintenance, rapid
iteration and flexible customization in our products so that we can rapidly respond to evolving customer
needs. This platform allows us to swiftly navigate market changes while ensuring high-quality and
stability of our products. Benefiting from such platform, we can reduce the new product development
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cycle to as few as seven months, offering us a distinct competitive advantage in the fast-paced cobot
industry. Our long-termist attitude is also manifested in our unwavering pursuit of safety that led to our
development of the flexible e-skin technology, which has achieved a safety speed four times the industry
standard, according to the CIC Report, significantly improving the efficiency without compromising
safety in human-robot interaction. Since our first model, we have built the cobot control boxes with the
ARM architecture. This strategic choice has enabled us to build cobots featuring smaller sizes, better
compatibility, lower power consumption, flexible customization and high scalability, according to the
CIC Report, which we believe aligns with the cobot industry evolution. We believe our research and
development philosophy will be instrumental in bringing long-term value to our shareholders.
We have interdisciplinary research and development capabilities that draw upon a diverse range of
fields such as mechanics engineering, computer sciences, control systems, ergonomics and AI, which
form the foundation of our technology leadership to support our long-term growth. As of the Latest
Practicable Date, we had assembled a research and development team of 140 industry experts and senior
engineers in the robotics industry, accounting for over 25% of our workforce. We have heavily invested in
research and development to maintain our competitive advantage. During the Track Record Period, our
research and development expenses were RMB46.9 million, RMB52.1 million, RMB70.5 million,
RMB31.2 million and RMB31.4 million in 2021, 2022 and 2023 and the six months ended June 30, 2023
and 2024, respectively, representing 26.9%, 21.6%, 24.6%, 28.4% and 26.1% of our revenue in the
respective years/periods. As of the Latest Practicable Date, we had obtained 217 invention patents, 303
utility model patents, and 133 design patents, some of which have garnered industry awards and acclaim.
For example, we received the 24th China Patent Excellence Award for our patented collision detection
method, the 2023 Guangdong Patent Silver Award for our patented dynamics motion control method, and
the 2021 Shenzhen Science and Technology Patent Award for our patented high-precision desktop robot
structural design technology. Our human-robot interaction technology based on e-skin admittance control
has been acclaimed by an expert group from the China Machinery Industry Federation as internationally
leading. In addition, we had filed applications for over 180 patents which were pending approval as of the
same date.
Our advantages in research and development are also evidenced in our team’s frequent involvement
and leadership in key research and development projects and formulation of industry standards. For
example, we led the Power Battery Group Multi-Robot Flexible Integrated Manufacturing System and
Application Demonstration (
ණϓႡிӻ୕ʿᏐͪ͜ᇍ ) project, which is part
of the National Key R&D Program—Intelligent Robotics (ྌ “౽ঐዚኜɛ ”ᓃਖ਼ධ );
we have also participated in drafting national standards for Integrated Robot Joint Performance and Test
Methods (ج) and Mechanical Safety Prevention of Accidental Start ( ዚ
૛τΌԣ˟จ઼̮ਗ ), contributing to the national standardization efforts.
Proprietary Full-stack Technologies
Leveraging our interdisciplinary research and development capabilities, we have become one of few
in the global cobot industry, according to the CIC Report, that have developed proprietary full-stack
technologies that cover all the key aspects in the cobot development cycle, encompassing cobot design
and manufacturing, key components development, controller system development, key algorithm
formulation and iteration, versatile cobot deployment for different tasks, and AI capabilities
development. Our core technology capabilities can be broadly categorized into five technology clusters,
including (1) key component design and development, (2) universal control platform, (3) safety
technologies, (4) robotic technologies, and (5) AI technologies, as illustrated by the chart below.
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Teleoperation
Motion capture
High-performance
real-time
control system
Motor and
encoder Integrated drive
and control
Integrated joint
Intelligent
human-robot
interaction platform
Imitation learning
Deep learning
Collision detection
Non-contact
Collision prevention
Kinematic calibration
and compensation
Complex continuous
trajectory control
Compliance and force
control
Robotic
Technologies
AI Technologies
Universal Control Platform
Self-developed Modularized Key
Component Platform
Safety
Technologies
Capitalizing on our technology capabilities, we have built cobots that are safe, smart, nimble and
robust with proprietary design.
Safe . Different from conventional cobot safety measures that cease operation only after a collision is
detected, we have pioneered a redundant dual-layer safety control architecture (࿴ ),
endorsed by the Certificate of Compliance from SGS, a multinational testing, inspection and certification
company. We are also an industry pioneer in integrating both non-contact collision prevention technology
and collision detection technology, offering additional layers of protection and enabling our cobots to
operate more efficiently. Notably, equipped with our proprietary wearable flexible e-skin, SafeSkin, our
cobots can detect the approach of objects within a 15 cm range, the highest among all similar
commercialized cobots, while operating at a safety speed of 1 m/s during the human-robot interaction,
well above the PRC national standard of 0.25 m/s, according to the CIC Report, setting a new industry
benchmark for safety and efficiency.
Smart . Our AI technologies encompass our intelligent perception and interaction technologies ( ౽ঐ
ʹʝҦஔ ) and AI learning capabilities ( ɛʈ౽ঐኪ୦ ). Our intelligent perception and interaction
technologies feature intelligent human-robot interaction in unstructured environments, enabled by our
teleoperation technology ( Ⴧ዁ЪҦஔ ) and motion capture and imitation technology (ၾᅼͷҦ
ஔ). Embodied in our AI cobot empowering platform, X-Trainer, our AI learning capabilities stand out
with high-quality data collection and significantly low latency with a 24 Hz frequency for image
reception and inference, coupled with a 250 Hz dual-arm motion generation, which translate into a 140%
improvement in end-to-end response speed over comparable systems, according to the CIC Report. See
“—Our Core Technologies—AI Technologies” for details of X-Trainer.
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Nimble . Our robotic technologies comprise sophisticated motion control and planning technologies
that allow our cobots to execute stable, precise, smooth and adaptive movements to match, and even
surpass, the nuanced manual dexterity of user movements. Featuring kinematic calibration and
compensation technology (໾ᎵҦஔ ), complex continuous trajectory control
technology (༦છՓҦஔ ) and compliance and force control technology (නɢછҦஔ ), our
robotic technologies have enabled our cobots to achieve, among the best in our product range, an absolute
positioning accuracy of 0.229 mm, a repeat positioning accuracy of Ô0.02 mm, and a maximum tool
speed of 4 m/s, with each parameter representing a leading standard in the global cobot industry,
according to the CIC Report, significantly improving the performance reliability and operating efficiency
of our cobots. Moreover, our cobots have achieved motion with vibration less than Ô0.22 mm under full
load and high speed, capable of handling delicate components which has intricate surface shapes and
mere 2 mm outline dimensions with assembly tolerances tighter than 0.07 mm and force control precision
under 0.5 N, allowing us to meet the stringent application requirements that our customers may raise.
Robust . Our cobots have undergone rigorous testing before launch. Our testing regime simulates
various extreme working environments, such as high temperature, high humidity and high dust levels, to
ensure our cobots’ consistent and effective operation in these harsh conditions. With the tested robustness
of our cobots, we have adapted our cobots to tackle with complicated working conditions such as high
heat environment, combustion in welding, underwater operations or corrosive environments, with the
confidence in their ability to adapt to difficult environments with consistently stable, reliable and
efficient performance. Our products have passed tests and received certifications, such as ISO/TS 15066,
ISO13849 and IP67, for their reliability and durability. We have secured all certifications for our products
to enter major overseas markets, including but not limited to the United States, the European Union,
Japan, Korea and Australia. Certain key certificates include CE, China Robot Certification, certification
from the U.S. Federal Communications Commission, Regulatory Compliance Mark from Australian
Communications Media Authority, certification from Nationally Recognized Testing Laboratory for the
U.S. market, and KC Mark Korea Certification.
We have developed a universal control platform that has achieved multi-platform, multi-device and
plug-and-play interoperability. Our high-performance real-time control system (છՓӻ୕ )
enables the controller to accomplish real-time multi-cobot operation and support rapid access and
real-time processing of multiple sensing elements such as vision, proximity, and force sensing. In
addition, the cross-platform plug-in technology ( ༨̨̻ౢ΁Ҧஔ ) allows for plug-and-play for
third-party accessories, rapid cobot deployment, cross-platform customization and ecosystem expansion.
We have achieved in-house design and development of key components including motors, encoders,
servos, controllers and sensors. Notably, we have developed core motor system with a proprietary
high-output torque frameless motor (ཥዚ ) integrated with a dual encoder featuring an
integrated vibration damping design (ᕐᇜᇁኜ ). Moreover, we were among the first in
China’s cobot industry to introduce integrated drive-control technology ( ᚨછɓ᜗Ҧஔ ) and
accomplished integrated multi-motor servo control technology (Ҧஔ ), according to the
CIC Report. Leveraging our experience in key component development, we have been instrumental in the
formulation of multiple national standards, such as national standards for Integrated Robot Joint
Performance and Test Methods (
ج) and Mechanical Safety Prevention
of Accidental Start ( ዚ૛τΌԣ˟จ઼̮ਗ ).
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Acclaimed both domestically and internationally, our products have received awards such as the
China Red Star Design Award (ᆤ ), the German iF Design Award ( ᅃ਷iFᆤ), the Red
Dot Design Award (ᆤ ), and the U.S. CES Innovation Award (਷CES ௴อᆤ), to name a few.
Comprehensive Product Matrix Catering to a Wide Array of Use Cases
As of the Latest Practicable Date, we offered a total of 27 cobot models in four series with payload
capacity ranging from 0.25kg to 20kg, among which 22 were six-axis models and five were four-axis
models, representing one of the most extensive product portfolios in the global cobot industry, according
to the CIC Report. The comprehensive product matrix allows us to meet specific customer needs by
offering model combinations with varying axis configurations, payload capacities, and performance
requirements, geared towards the specific production lines, processes or use cases to ensure that cobots
are optimally utilized for their intended tasks, which in turn translates into cost savings and operational
efficiency. For example, for complex and intricate operations, we deploy our six-axis cobots pursuant to
the customer’s specific payload requirements. In specific use cases where simplicity and efficiency are
the priority, however, our four-axis cobots are a better fit, because they are generally more cost-effective
and thus offer a more accessible entry point for automation solutions without compromising cobot
performance in tasks that do not require full six-axis capability. Cognizant of the budgetary concerns
faced by many potential cobot adopters, we believe that an extensive cobot portfolio represents a value
proposition to cobot adopters and positions us well to capture a greater market share.
Since our launch of the first desktop-level four-axis cobots in 2016, we have developed in-house key
technologies in four-axis cobot development, such as integrated drive and control technology and
integrated linkage technology and accomplished high-precision desktop cobot structural design.
Moreover, we have successfully developed well-rounded patent coverage in the field of four-axis cobot
development that have enabled compact size, integrated controller, and simple structure while
maintaining high-performance standards. We believe our leading position in the development of four-axis
cobots offers us a distinct competitive edge. As an illustration, the deployment of our MG400 cobots to
the electronics production line of a leading Chinese conglomerate has enabled the customer to reduce its
labor needs for that production process, and simultaneously, increase the production efficiency. This use
case has been selected as a Shenzhen Classic Smart Robot Application Demonstration Case in 2023.
Drawing upon our comprehensive product matrix, we have adapted our cobots to tackle with tasks in
numerous use cases in manufacturing, retail, healthcare, STEAM education, scientific research settings
and many more. To ensure quick deployment of relevant processes in manufacturing and to improve
production efficiency, we have developed a process design platform, on which our customers can
customize the processes tailored for their production lines or leverage our core process library, which
offers our customers ready-made process toolkits for complicated production steps that are commonly
used, such as palletizing, welding and screwdriving. As a result, we have significantly reduced the
programming workload and difficulty, substantially lowering the entry barrier for our customers and thus
boosting their willingness to adopt our cobots.
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The following scenes serve as an illustration of the breadth of tasks our cobots are capable of.
Beverage making and vending Moxibustion physiotherapy
Lab automation Wheel hub motor testing
Successful Commercialization Underscored by Global Footprint and Clientele
We have experienced significant improvement in our results of operations, primarily attributable to
our proactive endeavors in product commercialization and market expansion. Our revenue increased at a
CAGR of 28.3% from RMB174.3 million in 2021 to RMB286.7 million in 2023 and by 9.6% from
RMB109.9 million in the six months ended June 30, 2023 to RMB120.5 million in the six months ended
June 30, 2024. Our export volume of cobots ranked first in China for six consecutive years from 2018 to
2023, according to the CIC Report. We have strategically established a sales network that integrates
direct sales and distributorship spanning both domestic and international markets. While distributorship
allows us to quickly expand our customer reach to over 80 countries and regions, direct sales enables us
to closely interact with our customers to provide instant responses and in-depth technical support to end
users and foster strong customer relationships. During the Track Record Period and up to the Latest
Practicable Date, we had served over 1,000 direct sale customers and had 358 distributors globally as of
December 31, 2023. During the Track Record Period, we primarily conducted sales to overseas markets
by entering into sales contracts with distributors or direct sales customers overseas through a domestic
entity and exporting our products to them directly. We have strategically established a subsidiary in the
United States in 2022 and two subsidiaries in Europe and Japan in 2023, in pursuit of strengthening our
local presence and delivering tailored services. During the Track Record Period, in these key
international markets, we conducted our sales through our Company, our distributors and our local
subsidiaries. Such subsidiaries in international markets serve as our regional hubs, enabling us to provide
comprehensive localized services that are fine-tuned to the specific needs of each market. In particular,
our subsidiaries in the United States, Germany and Japan conduct targeted branding and marketing
activities for each of their local markets and manage the local warehouses for faster delivery to
accommodate local customers’ needs. In 2022, 2023 and the six months ended June 30, 2024, the amount
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of our sales conducted via our United States subsidiary was nil, RMB15.3 million and RMB9.0 million,
respectively; the amount of our sales conducted via our Germany subsidiary was nil, RMB0.6 million and
RMB5.6 million, respectively; the amount of our sales conducted via our Japan subsidiary was nil,
RMB17.8 million and RMB8.7 million, respectively.
Our cobots have been adopted by many companies around the globe, some of which are among the
ranks of Fortune 500 companies. For example, our cobots have been adopted by (1) one of the world’s
largest electric vehicle battery manufacturers; (2) one of the world’s largest automotive manufacturers in
terms of shipment volume; (3) a leading Chinese electronics manufacturer that manufactures components
and provides assembly services for the largest smart phone manufacturer in the world; and (4) one of the
top Chinese coffee brands. Our inclusion on the supplier lists of these sizable companies is not only a
testament to the superior quality of our products but also a significant driver of our long-term growth as
these companies tend to remain loyal to their recognized suppliers. Serving these companies typically
entails the adoption of our cobots in complex and demanding use cases, which challenges us to
consistently hold our cobots to the utmost standards. In addition, through proactive engagement with
these customers and addressing their pain points, we have gained significant experience and know-how,
which further solidifies our competitive advantages to create a distinct barrier between us and our
competitors. Moreover, with our steadfast commercialization endeavors, we have successfully broadened
the use cases for our cobots beyond industrial environments into more consumer-facing settings such as
retail and healthcare. For instance, our cobots have been applied to perform tasks such as coffee making
and latte decoration in coffee shops. With the development of, X-Trainer, our AI cobot empowering
platform, we expect to see more of our AI-empowered cobots working in diverse use cases in commercial
settings.
Our gross profit margin in 2021, 2022 and 2023 was 50.5%, 40.8% and 43.5%, significantly above
the industry average, according to the CIC Report. The outstanding margin profile is largely attributable
to our global distribution network and an international clientele. In 2021, 2022, 2023 and the six months
ended June 30, 2024, overseas markets contributed 48.1%, 58.1%, 59.1% and 61.4% of our total revenue,
respectively. Our cost advantages also stem from our proprietary development of key components and
in-house design and development of key components as well as economies of scale as demands for our
products continue to grow, coupled with the ongoing ramp-up of our production base in Rizhao,
Shandong. Being a major port city, Rizhao’s proximity to the port significantly reduces transportation
costs, facilitating efficient global export of our products. Our favorable margin profile not only improves
our financial performance but also affords us more flexibility in marketing strategy tailored to an
increasingly competitive landscape.
Visionary and Experienced Management Team
We are led by a visionary management team with strong execution ability, entrepreneurial vision
and, in particular, profound experience in the robotics industry. Our chairman, executive Director and
general manager, Mr. Liu Peichao, has nine years of experience in the robotics industry and was
instrumental in defining and developing the world’s first desktop-level cobot model and laying the
technological and product development foundation for our Company. Mr. Liu has led the serialization
development of our cobot products and overcome core technological challenges in cobot design and key
component technology. His leadership has been pivotal in our Company’s engagement with national key
research and development programs and the formulation of national standards, contributing significantly
to the field of robotics. Our executive Director and chief scientist, Mr. Lang Xulin, has been at the
forefront of robotic and AI algorithm formulation and iteration for over nine years, receiving over 80
invention patents. Mr. Lang was indispensable in the development of our key technologies including
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motion control, flexible e-skin, imitation learning, end-to-end control and teleoperation technologies, to
name a few, and was instrumental in the development of our AI-powering cobot platform, X-Trainer. Mr.
Lang’s leadership was pivotal to our successful development of multiple key invention patents, including
winners of China Patent Excellence Award and Guangdong Provincial Patent Silver Award.
Other key management members closely involved in our research and development include Mr.
Jiang Yu, our research and development director and deputy general manager with over 11 years of
experience in key cobot component development and leadership in research and development, who has
been pivotal in advancing our technological capabilities and innovation in key components such as
controllers, servo drives and servo systems; Mr. Liu Zhufu, our deputy general manager with over eight
years of experience in robotic product development, who has been leading the development and
commercialization of MG series and CR series products as well as the development of our cobot
operating systems, intelligent perception and safe interaction technologies; and Mr. Xie Junjie, our
product director, who has been in the robotics industry for over eight years and was a core member of the
project of Development and Industrialization of Cobot (೯ʿପุʷ ), a key provincial
research and development program of Guangdong. Each of them is frequently involved in research and
development projects and formulation of industry standards on municipal, provincial and national levels,
bringing a wealth of experience and a strong commitment to innovation, significantly contributing to our
research and development initiatives and industry leadership.
We are also backed by a group of external industry experts, whose expertise, resources and vision
have been tremendously beneficial to our growth. Notably, Mr. Li Yibin, a renowned expert and scholar in
robotics engineering, is currently serving as our independent non-executive Director and member of our
strategy committee. Mr. Li is a distinguished professor at Shandong University, recognized as a top talent
in the BaiQianWan Talents Program (φɛʑ ), a Taishan Leading Talent ( इʆჯ
ɛʑ), and a recipient of the State Council’s special allowance. Mr. Li brings his invaluable expertise
and over 40 years of experience in robotics technology to our Company, providing strategic guidance and
insights that drive our innovation and progress in the field.
Alongside our key leaders in research and development initiatives, our management also includes
dedicated professionals with extensive cross-disciplinary experience across finance, marketing, human
resources and legal fields, all of whom is invaluable to the continued success of our Company. We believe
our visionary and experienced management team has been instrumental in our accomplishment and will
continue to lead us in our unwavering pursuit of excellence in the future.
GROWTH STRATEGIES
We intend to pursue the following strategies to further grow our business, as we believe that our
competitive edges consist of four major aspects, i.e., our technologies, our product offerings, our
production capabilities and our sales network, and the creation and execution of the following strategies
could harness our competitive advantage, thereby enabling us to leverage the value of our business
platform and outperform our competitors.
Continue to Advance Technology Development
We intend to continue to invest heavily in the development of technologies that will allow us to
maintain our leading edge in the cobot industry. Our commitment to innovation is evident in the following
key initiatives.
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Development of key components
We plan to further invest in the research and development of proprietary key components of cobots,
such as encoders, motors and drive with a goal to enhance cobot performance, achieving improvements in
speed, positioning accuracy and dynamic performance.
More specifically, we plan to (1) leverage established commercial chips to develop encoder-based
hardware circuits and key encoder algorithms, allowing us to produce high-precision encoders at a
reduced cost; (2) develop the next-generation permanent magnet synchronous motors to achieve a system
efficiency improvement; (3) develop next-generation power devices that will increase switching
frequencies, thereby reducing system size and losses, and significantly lower heat sink volume due to
their high dynamic response capabilities, thus increasing power density to better meet the requirements
of next-generation intelligent cobots; and (4) develop controller systems that integrate multi-sensor
fusion, AI algorithms, and capabilities such as vision, speech, and semantic understanding.
Development of AI technologies
We plan to continue to invest in the research and development of AI technologies to enhance the
capabilities and versatilities of our cobots. More specifically, we plan to adopt end-to-end control to form
learning models and generalization capabilities for our cobots to address the challenges of cobot
application in unstructured environments and enable intelligent performance of tasks such as wire
insertion and removal and application of cobots to more complex use cases for consumer services. We
also plan to further develop advanced AI technologies to enable cobots to eventually achieve embodied AI
functions, which allow the cobots to adapt their movements, perceive surroundings, respond to
commands in natural languages, further expanding the application of cobots to more complicated tasks
and unstructured environments.
Development of key cobot algorithms
We plan to further improve our motion control algorithms to elevate our cobots’ overall motion
performance. We expect the improved algorithms to achieve real-time optimal motion control, further
improve cobots’ action execution efficiency and task cycle. We also plan to further update our
ready-made process toolkits to improve the algorithms and enrich the process toolkits library to include
more functionalities and support more third-party accessories and equipment.
Development of perception and interaction technologies
We plan to build a full-perception technology architecture to expand the perception and interaction
capabilities of our cobots and continue to enhance the safety measures in human-robot collaboration to
meet the requirements in various use cases. We plan to develop the next-generation SafeSkin technology
to increase detection distance and enhance response speed, thereby further improving the collaboration
safety of our cobots. In addition, we intend to develop multi-modal human-robot interaction technology,
which is expected to combine touch, proximity and vision to provide richer and more natural interaction
and collaboration experience and enable our cobots to provide more intelligent and humanized services
safely and reliably across more industry settings, such as consumer services, medical services and
household services.
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The following table sets forth details of our plan to continue to advance our technology development, based on our current estimation, which is
subject to changes based on our actual needs and market conditions at the relevant time.
Development timeline
Details and target results
Estimated
development costs (1)
(HK$ in million)
For the year ending December 31,
2025 2026 2027 2028 2029
Research and development of proprietary key components 48.7
Encoder-based hardware
circuits and key
encoder algorithms .........
• Complete hardware
development and core
algorithm development and
verification
• Purchase relevant testing
equipment and software
• Complete cobot performance
comparison testing
• Complete product
performance improvements
• Complete overall long-term
stability testing
• Complete external testing and
certification by third parties
• Start small batch production
• Start mass production • Long-term stability tracking Based on advanced circuits available in
the market as carriers, we plan to
develop encoder-based hardware
circuits equipped with our own
encoder algorithms, satisfying the
needs for high-precision encoders at
lower costs
9.7
Permanent magnet
synchronous motors ........
• Complete the recruitment of
relevant personnel
• Complete the purchase of
testing equipment and the
construction of the testing
facility
• Complete the development of
the first prototype
• Complete comparison testing
and overall performance
testing for further
optimization and
improvements
• Complete external testing and
certification by third parties
• Start small batch production
• Start mass production • Long-term stability tracking With new structural design using new
composite superconducting materials
and nano-amorphous materials, we
plan to develop permanent magnet
synchronous motors, which are
expected to improve the system
efficiency by 20% to 50% as
compared to traditional motors
17.1
Next-generation power devices and
controller systems .........
• Complete hardware and
software development for
power devices and controller
systems
• Complete tests for long-term
stability, core temperature
and power consumption
• Complete external testing and
certification by third parties
• Start small batch production
• Start mass production • Long-term stability tracking Equipped with standard software
development kit interface and visual
safety interface, we plan to increase
the switching frequency, reduce
system volume and increase power
density of the controller systems
based on the new generation of power
devices
21.9
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Development timeline
Details and target results
Estimated
development costs (1)
(HK$ in million)
For the year ending December 31,
2025 2026 2027 2028 2029
Research and development
for embodied AI ..........
• Establish an interdisciplinary
research and development
team, covering experts in
robotics, AI, automation
control, industry
applications, among others
• Conduct research on key
technologies such as
end-to-end control, deep
learning, reinforcement
learning, humanoid robots
and perception fusion
• Complete the structural
development and
optimization of the embodied
AI prototype
• Complete the research and
development for embodied AI
perception and cognitive
system and end-to-end
control framework
• Further optimize the
structural design, improving
flexibility, precision,
operating efficiency and
stability
• Complete the upgrade of the
prototype, debug the
performance of the upgraded
embodied AI prototype, and
conduct preliminary
functional verification and
performance testing
• Conduct iterative
optimization based on test
results to improve the
stability and reliability of the
prototype
• Select business partners for
trial operation verification,
evaluate product
competitiveness, and collect
market feedback
• Start mass production
• Based on market feedback
and user needs, continue to
iterate our products
Adopt end-to-end control to form a
learning model and generalization
capabilities to realize intelligent
operation of embodied AI, enabling
industry applications in industries
such as new retail settings (e.g., milk
tea and coffee making)
226.3
Improvement of algorithms, process toolkits and accessories compatibility 43.7
Motion control algorithms ....... • Complete the computing
power evaluation of
high-performance motion
control algorithms and the
construction of hardware
platforms
• Conduct feasibility study on
realizing real-time optimal
motion control algorithms
• Complete the reconstruction
of motion planning
instructions
• Complete small-batch
verification of the optimal
algorithm and multi-scenario
deployment testing
• Adjustment and optimization
of time-optimal motion
planning algorithm functions
• Apply the motion control
algorithms to all cobot
models
• Long term stability tracking Further improve the performance of our
cobots’ overall motion control
algorithms, achieving real-time
optimal motion control and
improving our cobots’ task execution
efficiency
21.8
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Development timeline
Details and target results
Estimated
development costs (1)
(HK$ in million)
For the year ending December 31,
2025 2026 2027 2028 2029
Ready-made process toolkits ...... • Further improve the functions
of palletizing, welding and
assembly process toolkits,
satisfying industrial-grade
requirements for relevant
tasks
• Improve the function,
user-friendliness and stability
of relevant process toolkits to
achieve differentiated
development
• Develop high-end functions
such as multi-product
palletizing, vision-guided
palletizing, 3D intelligent
welding, and intelligent
assembly line management,
allowing our process toolkits
to attract high-end customers
• Mass deployment and
application of intelligent
process toolkits for our
customers
• Long term stability tracking Improve the algorithms and functions of
relevant process toolkits
17.7
Third-party accessories and equipment
compatibility ...........
• Complete the design and
development of the basic
framework, determine the
types of accessories,
interface standards, and
performance requirements
that need to be supported by
our cobots, and design the
plug-in framework and
application programming
interface standards to ensure
the compatibility
• Develop core plug-ins for
mainstream business
partners, including sensors
and vision systems, among
others
• Continue to expand the
accessory mix and equipment
supported by our cobots
• Launch integrated solutions
based on plug-in ecology to
satisfy the needs of complex
application scenarios and
introduce such integrated
solutions to the market
• Conduct research on
cutting-edge technology and
integrate new technologies
such as Internet of Things
and 5G communications into
our accessory ecosystem
• Long term stability tracking Achieve plug-and-play for more
third-party accessories and
equipment, allowing for rapid cobot
deployment
4.4
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Development timeline
Details and target results
Estimated
development costs (1)
(HK$ in million)
For the year ending December 31,
2025 2026 2027 2028 2029
Development of perception and interaction technologies 40.5
New generation of
SafeSkin technology ........
• Complete the recruitment of
relevant research and
development personnel
• Complete the development of
underlying technologies for
the new generation of
SafeSkin, optimize the sensor
array layout and signal
processing algorithm, and
improve the detection
distance and an ti-interference
ability of SafeSkin
• Complete the hardware
solution and structural
solution design for the new
generation of SafeSkin
• Complete long-term
verification of the stability
and reliability for SafeSkin
• Pass the safety certification
• Start small batch production
• Optimize the functions of
SafeSkin and move to mass
production stage
• Long term stability tracking
and continuous optimization
of the functions for SafeSkin
Conduct research on the new generation
of SafeSkin for improving our
cobots’ perception distance and
safety speed during the human-robot
interaction
32.4
Multi-modal human-robot interaction
technology ............
• Complete the recruitment of
relevant research and
development personnel
• Develop high-sensitivity,
wearable tactile feedback
devices to achieve delicate
and realistic touch simulation
• Optimize the sensor array
layout and signal processing
algorithms to improve the
accurate perception of object
distance and movement
trajectory
• Develop multi-modal data
fusion algorithms to achieve
seamless connection and
collaborative work of
information from different
sensing modalities
• Design and manufacture
multi-modal human-robot
interaction prototypes
• Conduct deployment tests in
specific scenarios and
complete data collection
• Start small batch production
for market feedback
• Based on test feedback,
conduct comprehensive
design optimization in terms
of product appearance, user
experience, durability, among
others
• Based on market demand
feedback, develop
customized products for
different application
scenarios, such as service
cobots for high-end
restaurants, home service
cobots to assist the elderly,
among others
• Continue to conduct research
and development on the
application of new
technologies and materials,
such as the in-depth
application of AI deep
learning in multi-modal
perception, further enhancing
the intelligence of our cobots
Conduct research on multi-modal
human-robot interaction technology
that combines touch, proximity and
vision, enabling our cobots to
provide more intelligent services in
industries such as medical care and
home services
8.1
(1) As of the Latest Practicable Date, we had not incurred any costs for the indicated research and development projects. The funding sources for these projects will be the net proceeds
from the Global Offering, external financing as well as our internal resources. See “Future Plans and Use of Proceeds” for details of our intended use o f proceeds.
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Continue to Expand Our Product Offering and Ecosystem
We intend to maintain our competitive edge in comprehensive product offerings by further
upgrading existing products and launching new products. More specifically, we plan to develop the
next-generation CR series which will be equipped with cutting-edge robotic drivetrain solutions,
structural design and control systems, bringing about enhanced overall product performance, including
improved cycle times, weight reduction and enhanced safety. We also plan to develop more lightweight
models for existing product series to cater to customer demand in more use cases. In addition, we plan to
develop a new product series targeting the medical and healthcare sector.
We also plan to expand our cobot ecosystem. More specifically, we plan to continue to diversify the
accessory offerings for our cobots as we believe the abundance of accessories will greatly benefit the
ecosystem around our cobots enhancing their versatility and functionality, enabling seamless integration
with various applications, and improving user experience through customized solutions. To this end, we
will continue to develop innovative accessories in-house and encourage third party developers to join the
ecosystem by providing necessary development tools. We also plan to continue to upgrade our process
design platform to not only render our customers more freedom in developing their own process but also
expand our ready-made process libraries to be applied to more use cases.
Moreover, we plan to continue to upgrade our X-Trainer to further develop its generalized learning
efficiency and expand its capabilities. We believe with the proliferation of AI technologies will accelerate
the adoption of cobots in more consumer-facing settings and eventually evolve into household uses. To
this end, we plan to continue to launch new product series featuring safer, lighter and more affordable
household cobots. We also plan to develop new product forms.
The following table sets forth details of our plan to expand our product offering and ecosystem,
based on our current estimation, which is subject to changes based on our actual needs and market
conditions at the relevant time.
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Development timeline
Details and target results
Estimated
development
costs (1)
(HK$ in
million)
Market competitiveness and expected financial/
operational improvement to our Company
For the year ending December 31,
2025 2026 2027 2028 2029
Next-generation CR series . • Improve software
functions and ease of
use
• Conduct technology
research on new
transmission solutions
• Complete the
development of
various models with
different specifications
based on new
generation
technologies
• Complete product
testing and
certification
• Start small batch
production
• Start mass production • Long term stability
tracking
Conduct research on new
generation transmission
solutions and complete the
development of the
next-generation CR series
to improve product
performance and ease of
use, among others
49.9 As industrial automation and intelligent manufacturing upgrades and the
transformation needs of flexible manufacturing increase, customers have
higher requirements for the performance, safety and cost-effectiveness of
industrial cobots. Therefore, we plan to develop the next-generation CR series
which will have enhanced overall performance, e.g., less time required to
complete one cycle of a process, reduced weight of a cobot and enhanced
safety feature. In particular, the enhanced safety feature will be achieved by
new e-skin technology which may further extend safety detection range.
Similar to our current CR Series, the next-generation CR Series also primarily
targets industrial customers, including industrial manufacturers seeking to
implement flexible production systems, providing such customers with the
ability to adapt to ever-changing production plans and requirements. The higher
product performance and price advantages will allow us expand into certain
high-end manufacturing markets such as precision manufacturing and
micro-nano manufacturing, and attract more customers in automobile
manufacturing, semiconductor and medical industries. We believe that certain
features of our next-generation CR Series will allow it tap into such high-end
markets, including absolute positioning accuracy from current 0.229 mm to
0.05 mm and repeat positioning accuracy from current 0.02 mm to less than
0.01 mm. The global cobot market for the industrial sectors has grown from
US$396.9 million in 2019 to US$788.7 million in 2023, at a CAGR of 18.7%.
The market size is expected to reach US$2,781.8 million in 2028, at a CAGR of
28.7% between 2023 and 2028.
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Development timeline
Details and target results
Estimated
development
costs (1)
(HK$ in
million)
Market competitiveness and expected financial/
operational improvement to our Company
For the year ending December 31,
2025 2026 2027 2028 2029
Lightweight models for
existing product series .
• Complete the research
on lightweight models
for CR Series and
Nova Series
• Start mass production • Long term stability
tracking
• Long term stability
tracking
• Long term stability
tracking
Introduce lightweight models
for CR Series and Nova
Series to enhance our
market competitiveness for
attracting price-sensitive
customers
27.2 We expect our cobots to meet demand of companies of all sizes for automation
upgrades, and observed that small and medium-sized customers can be
price-sensitive for the investments in such upgrades, particularly those in metal
processing and injection molding industries. Therefore, we plan to develop
lightweight models for CR Series and Nova Series for these customers in China.
In particular, lightweight models for CR Series, as compared to the standard CR
Series, will not be equipped with USB interface, controller area network bus (a
vehicle bus designed to enable efficient communication primarily between
electronic control units) or built-in Wi-Fi function. In addition, lightweight
models for CR Series will not support PROFINET, an industrial Ethernet
protocol for communication between devices in industrial automation systems.
As a results, customers who purchase such models will not be able to connect
them with multiple external devices or debug and adjust the cobot over Wi-Fi.
Similarly, for the purposes of reducing the prices of lightweight models for Nova
Series, such models will not be able to be equipped with vision sensors,
connected with external devices or adjusted through any equipment other than
computers. Due to the functionalities simplification, lightweight models for CR
Series can only be applied to the specific tasks such as material handling (e.g.,
sorting, packaging and labeling) as compared to the standard CR Series.
Furthermore, lightweight models for Nova Series can only be used in the milk
tea and coffee making and moxibustion cases compared to the standard Nova
Series.
We expect the listed price of our lightweight models could be approximately 30%
lower than that of standard models, allowing us to attract more price-sensitive
customers such as those in metal processing and injection molding industries and
increase our market shares. We estimate that the sales volume of lightweight
models for CR Series will account for at least 50% of the sales volume of our
CR Series in China in 2026, 2027 and 2028, respectively, and that the sales
volume of lightweight models for Nova Series will account for at least 70%,79%
and 79% of the sales volume of our Nova Series in China in the same years,
respectively. According to the CIC Report, China’s lightweight models of
six-axis industrial cobot market had a shipment volume of approximately 5.9
thousand units in 2023, which is expected to reach 14.4, 19.3 and 25.6 thousand
units in 2026, 2027 and 2028, respectively. China’s lightweight models of
six-axis commercial cobot market had a shipment volume of approximately 2.2
thousand units in 2023, which is expected to reach 8.2, 12.4 and 16.6 thousand
units in 2026, 2027 and 2028, respectively.
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Development timeline
Details and target results
Estimated
development
costs (1)
(HK$ in
million)
Market competitiveness and expected financial/
operational improvement to our Company
For the year ending December 31,
2025 2026 2027 2028 2029
New product series targeting
the medical and
healthcare sector . . .
• Complete research on
new transmission
solutions and the
development of a
prototype cobot
targeting the medical
and healthcare sector
• Expand the specific
applications of this
new product series in
the medical and
healthcare sector by
collecting feedbacks
and exploring new
demands
• Complete product
testing and
certification
• Start small batch
production
• Start mass production • Long term stability
tracking
Complete the development of a
new product series
targeting the medical and
healthcare sector,
enhancing our
competitiveness in such
sector
13.6 The aging population and rising caregiver costs are driving the adoption of cobots
in physiotherapy, rehabilitation, and medical assistance applications, making the
medical and healthcare sector a significant growth area for the global cobot
market. The global cobot market for the medical and healthcare sector has grown
from US$27.2 million in 2019 to US$75.7 million in 2023, at a CAGR of 29.1%.
The market size is expected to reach US$373.2 million in 2028, at a CAGR of
37.6% between 2023 and 2028. Our new product series will have advanced
transmission solutions and control systems specifically designed for the medical
and healthcare sector, allowing the deployment for physiotherapy, rehabilitation
and medical assistance applications, among others. We expect that our new
product series will attract more customers such as community wellness centers,
beauty salons and high-net-worth families
(1) As of the Latest Practicable Date, we had not incurred any costs for the indicated product development projects. The funding sources for these proj ects will be the net proceeds from
the Global Offering, external financing as well as our internal resources. See “Future Plans and Use of Proceeds” for details of our intended use of pro ceeds.
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Enhance Production Capabilities and Capacity to Streamline Supply Chain Management
To further streamline supply chain management and maintain control over production costs and key
component quality, we intend to enhance our production capabilities by introducing advanced
manufacturing technologies and equipment to our production lines. More specifically, we plan to adopt
surface-mounted technology and introduce advanced machining techniques for our production lines by
integrating cutting-edge machinery and refined processes to enhance production efficiency, product
quality and cost-effectiveness, which will further solidify our competitive edge in the market.
Moreover, we plan to increase our production capacity in light of the current production capacity
and in anticipation of increasing demand in the coming years. We plan to build flexible production lines
designed for our next-generation products as well as key components, for which we plan to introduce
automated production equipment and processes to boost production efficiency and capacity.
The following table sets forth details of our plan to enhance production capabilities and streamline
supply chain management, based on our current estimation, which is subject to changes based on our
actual needs and market conditions at the relevant time.
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Development timeline
Details and target results
Estimated
development
costs (1)
(HK$ in
million)
Market competitiveness and expected financial/
operational improvement to our Company
For the year ending December 31,
2025 2026 2027 2028 2029
Development of surface
mount production
lines
(2) .......
• Conduct planning
arrangements based
on relevant
equipment,
production capacity
goals, required
personnel, among
others, and formulate
a project plan
• Conduct price
comparison and
bidding process for
required equipment
• Recruit production
personnel for the
surface mount
production lines with
relevant training
• Surface mount
production lines start
operations
– – Complete the development
of surface mount
production lines and
start production by the
end of 2026
17.9 The development of surface mount production lines can improve our
product performance and reliability, reducing failure rates and
maintenance costs. It is expected that the deployment of such
production lines will save approximately RMB3.0 million in
production costs based on our 2025 production plan
Development of
machining
capabilities
(3) ....
• Formulate a plan for
the equipment and
personnel required to
enhance our existing
machining
capabilities
• Conduct price
comparison and
bidding process for
required equipment
and recruit relevant
personnel
––––A chieve advanced
machining capabilities,
improving our standard
production capacity,
efficiency and quality
and reducing production
costs
25.9 More advanced machining capabilities can reduce relevant production
costs, allowing our products to maintain price advantage
Development of flexible
production lines
(4) ..
• Upon the completion
of our research on the
next generation CR
series, formulate a
plan for the
equipment and
personnel required
for flexible
production lines
• Conduct price
comparison and
bidding process for
required equipment
• Recruit production
personnel for flexible
production lines with
relevant training
––––D e v elop flexible production
lines to improve our
production capability
44.3 The development of flexible productions lines can improve our
production capabilities with more advanced production techniques,
allowing us to flexibly adjust our production plan in response to
market demands
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Development timeline
Details and target results
Estimated
development
costs (1)
(HK$ in
million)
Market competitiveness and expected financial/
operational improvement to our Company
For the year ending December 31,
2025 2026 2027 2028 2029
Mass production of
cobots with embodied
AI functions
(5) ...
• Locate properties for
land use rights
• Formulate a
production base
construction plan
• Conduct price
comparison and
bidding process for
construction suppliers
and required
equipment
• Start the construction
of the production
base for the mass
production of cobots
with embodied AI
functions
• Complete the
construction of the
production base by
the end of 2027
– – Establish a new production
base for the mass
production of cobots
with embodied AI
functions
241.4 Embodied AI functions provides our cobots with the ability to perceive,
make decisions and act, allowing our cobots to perform more complex
tasks. We expect our cobots with embodied AI functions will be able
to plan and execute multiple tasks, further broadening the application
scenarios of our cobot products. The global market of the smart
cobots is expected to grow from US$0.4 billion in 2023 to US$3.6
billion in 2028, at a CAGR of 58.1%
(1) As of the Latest Practicable Date, we had not incurred any costs for the indicated development projects. The funding sources for these projects wil l be the net proceeds from the
Global Offering, external financing as well as our internal resources. See “Future Plans and Use of Proceeds” for details of our intended use of procee ds.
(2) The development of surface mount production lines will not increase our production capacity as it is one of the production steps that we currently o utsource to third parties.
(3) The development of machining capabilities will not increase our production capacity as the machining process is one of the production steps that w e currently outsource to third
parties.
(4) We intend to deploy the flexible production lines as a supplement to our production lines for six-axis cobots, particularly CR Series, the annuali zed production capacity of which
is approximately 4,800 units in 2024. The development of the flexible production lines is expected to increase our production capacity for six-axis c obots by approximately 90% as
compared to such annualized production capacity. We believe our total expected annual production capacity of 35,000 units is not excessive in view of , among other things, the
expected global annual cobot production capacity of over 300,000 units in 2025 according to the CIC Report. Since the launch in 2021, cobots from the CR Series have been adopted
by manufacturers around the globe across a wide range of industries, including automotive, consumer electronics, semiconductor, healthcare, chem ical, retail and many others. We
believe that the increase in our production capacity is warranted by the future market demand for cobots, as all the major sectors in the cobot industry show strong growth
momentum, according to the CIC Report. In particular, the industrial sector dominates the global cobot market, with a projected CAGR of 28.7% between 2023 and 2028; the
commercial sector is expected to experience the fastest growth, with a CAGR of 75.3% between 2023 and 2028; the medical and healthcare sector is anothe r significant growth area,
with a CAGR of 37.6% between 2023 and 2028.
(5) The establishment of the production base for cobots with embodied AI functions will enable us to produce such cobots of approximately 20,000 units per year, which will have an
average listed price of RMB0.1 million. This estimated production volume does not fall in any of our current categories for production capacity calcu lation as cobots with embodied
AI functions constitute a separate category. According to the CIC Report, driven by labor shortages and an aging population, it is expected that start ing in 2026, cobots with
embodied AI functions which equipped with wheels and single-arm or dual-arm configurations will be primarily deployed in the fields of research and e ducation (including
laboratory automation, teaching assistance and research support), industrial setting (such as material handling, palletizing and loading/unloa ding), and commercial setting (such as
24-hour retail stores). According to the same source, in view of the advancement of AI technologies and the decrease in the manufacturing costs for cob ots, the global market of
cobots with embodied AI functions is expected to increase significantly and reach over RMB20 billion in 2028. We believe that, as our cobots have been d eployed in similar use
cases, and leveraging our research and development capabilities and years of experience in such applications, our cobots with embodied AI functions combining with mobile robot
chassis will gain a competitive edge in these fields in the future. As such, upon the completion of our production base by the end of 2027, our production capacity for cobots with
embodied AI functions should be warranted by sufficient market demand.
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Further Fortify Our Sales Network to Expand Global Reach
We intend to continue to expand and deepen our sales network to increase market penetration and
expand our global presence. We plan to identify and engage with key distributors globally to establish
partnerships that will open us to new market opportunities more effectively. In particular, we will search
for and identify potential distributors with large scale operations, dedicated sales staff and technical
support capabilities through social media, sponsorship, local partner referral and industry events, and
seek to establish business cooperation with such distributors by demonstrating the advancement of our
cobots products. We also plan to expand local marketing teams in key international markets and invest in
localized marketing initiatives that will resonate with the specific needs and preferences of our target
markets. At the same time, we will further invest in the recruiting, training and support to our local
service personnel to improve the overall customer experience and increase customer stickiness. We also
plan to embark on more proactive marketing and branding activities, including waging marketing and
advertising campaigns, participating in large scale industry conferences and events, and continuing to
sponsor robotics competitions. We will also conduct industry-focused business development initiatives
whenever we identify any growth opportunity within certain industry verticals.
In addition, we plan to establish three overseas subsidiaries in Thailand, Mexico and United Arab
Emirates, the commercial rationale of which is: (1) Thailand was our largest market in Southeast Asia
during the Track Record Period; (2) our business in Mexico has been developing rapidly as we have
established cooperation with local customers and established business contacts with companies in
Mexico. In particular, our revenue from the Mexican market was RMB0.7 million, RMB3.7 million,
RMB4.8 million, RMB3.7 million and RMB3.0 million in 2021, 2022, 2023 and the six months ended
June 30, 2023 and 2024, respectively. We do not foresee any material adverse impact that the U.S. tariff
policy may cause on our sales and expansion plan in the Mexican market, as (1) we directly sell our
products from China to customers in Mexico and (2) our sales and expansion plan in the Mexican market
will not result in the sales of our products from Mexico to the U.S., both of which were not subject to any
U.S. tariff policy as of the Latest Practicable Date; and (3) according to the CIC Report, United Arab
Emirates is experiencing rapid growth in education technology market, mainly driven by government
support and digital transformation, leading to a huge market potential of robot education. Establishing
overseas subsidiaries in these countries can improve our localization, provide localized product display,
training and after-sales services to local customers, which could further improve our brand awareness in
such countries. According to the CIC Report, the cobot markets in Thailand, Mexico and United Arab
Emirates are all in nascent stage of development with a limited number of market players, providing new
entrants in such markets with great opportunities. According to the same source, (1) Thailand’s cobot
market size has grown from US$2.4 million in 2019 to US$5.1 million in 2023, at a CAGR of 20.6%, and
is expected to reach US$27.6 million by 2028, at a CAGR of 40.4% from 2023 to 2028. The Thai
government has implemented the Thailand 4.0 new economic development model, which intends to,
among others, upgrade the country’s industrial structure, improving manufacturing capabilities and
achieving international standards. Thailand has become a key region for the development of industrial
manufacturing enterprises, with industry leaders setting up factories in the country, which is expected to
drive demand for cobots; (2) Mexico’s cobot market size has grown from US$8.4 million in 2019 to
US$14.3 million in 2023, at a CAGR of 14.4%, and is expected to reach US$53.1 million by 2028, at a
CAGR of 30.0% from 2023 to 2028. Mexico has attracted many renowned multinational corporations to
established their own factories, including corporations in automobile, electronics, pharmaceutical and
other manufacturing industries; and (3) the cobot market size in United Arab Emirates has grown from
US$0.4 million in 2019 to US$1.4 million in 2023, at a CAGR of 33.4%, and is expected to reach US$6.2
million by 2028, at a CAGR of 34.3% from 2023 to 2028.
The following table sets forth details of our plan to further fortify our sales network, based on our
current estimation, which is subject to changes based on our actual needs and market conditions at the
relevant time.
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Development timeline
Target results
Estimated
development costs (1)
(HK$ in million)
For the year ending December 31,
2025 2026 2027 2028 2029
Engagement with key distributors .... • Continue to engage key distributors in Europe, Asia Pacific and the Americas Strengthen the influence and market
position of our brand through these
measures, stimulating our overseas
sales
1.5
(2)
Expansion of local marketing teams and
organization of marketing initiatives .
• Engage market research
agency to research on
overseas market conditions
• Conduct feasibility studies on
organizing marketing
activities in markets with
more relevant exhibitions,
such as the United States and
Germany
• Regularly organize marketing activities such as product introduction meetings 3.5
(2)
Recruitment and training of
local service personnel .......
• Recruit service personnel for
our overseas subsidiaries to
be established in Thailand,
Mexico and United Arab
Emirates
• Provide new service
personnel with relevant
training
• Expand our service team for new overseas subsidiaries – 67.8
(2)
Marketing and branding
activities .............
• Continue to conduct digital marketing on Google, LinkedIn and other media
• Actively participate in exhibitions such as Automate, Munich Industrial Show and Nagoya Industrial Show
10.0 (2)
(1) As of the Latest Practicable Date, we had not incurred any costs for the indicated sales expansion projects.
(2) The funding sources for these projects will be the net proceeds from the Global Offering, external financing as well as our internal resources. See “Future Plans and Use of
Proceeds” for details of our intended use of proceeds.
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Selectively Pursue Strategic Collaboration, Investment and Acquisition Opportunities to Integrate
Industry Resources
We intend to selectively pursue strategic alliances, investment and acquisition opportunities both
domestically and overseas in the downstream of the cobot industry, i.e., cobot integrators, that may help
us acquire new technologies, expand sales channels and tap into new industries where most of potential
customers have their designated cobot integrators or suppliers. When assessing the investment or
acquisition opportunities, we will primarily consider targets that are complementary to our product
offerings and are in line with our corporate philosophy and growth strategies. As of the Latest Practicable
Date, we had not identified any investment or acquisition target or entered into any definitive investment
or acquisition agreement.
OUR COLLABORATIVE ROBOT PRODUCTS
We are primarily engaged in the design, development, manufacturing and commercialization of
cobots. Since our inception in 2015, we have grown to become a leading cobot company both in China
and globally. Our cobot products are adopted by global customers for various use cases in manufacturing,
retail, healthcare, STEAM education, scientific research settings and many more.
Our cobots are primarily categorized into two types based on the number of axes, i.e., four-axis
cobots and six-axis cobots. We primarily market our six-axis cobots under the CR Series and the Nova
Series. Our six-axis cobots feature great flexibility and dexterity, making them versatile for performing a
wide range of tasks, spanning from material handling, picking, stacking and inspection, to more
complicated manufacturing tasks such as screwdriving, gluing and laser welding. Additionally, they can
be utilized in consumer-facing settings for tasks such as latte decoration, milk tea making, physical
therapy and photography. Our four-axis cobot series primarily consist of Magician Series and M Series.
Our four-axis cobots feature integrated lightweight design and compact size, allowing for easy
deployment at desktop-level, well-suited for use cases in STEAM education settings and certain light
manufacturing use cases, such as labeling and electronic component testing processes. In April 2023, we
also launched our first six-axis cobot under the Magician Series, Magician E6, catering to our customers’
demand for six-axis cobots for STEAM education purpose.
As of the Latest Practicable Date, we offered a total of 27 cobot models in four series with payload
capacity ranging from 0.25kg to 20kg, among which 22 were six-axis models and five were four-axis
models, representing one of the most extensive product portfolios in the global cobot industry, according
to the CIC Report. In addition, cobot-related accessories within our ecosystem have enhanced our cobots’
versatility and functionality. Moreover, catering to customers’ demand for different automation
solutions, we have designed and introduced integrated cobots to readily cope with specific use cases in
various industries, such as palletizing, welding, mobile operation and vocational training. During the
Track Record Period, we sold over 53,000 cobots worldwide.
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The following table sets forth a breakdown of our revenue by product type for the years/periods
indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Six-axis cobots ....... 25,957 14.9 104,735 43.5 134,299 46.8 52,609 47.9 63,840 53.0
Four-axis cobots ...... 119,885 68.8 100,869 41.9 99,523 34.7 40,501 36.8 36,763 30.5
Integrated cobots ...... 16,095 9.2 31,596 13.1 34,306 12.0 11,989 10.9 14,713 12.2
Others (1) ............ 12,377 7.1 3,813 1.5 18,621 6.5 4,813 4.4 5,146 4.3
Total .............. 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
(1) Others primarily represent project-based solutions, such as STEAM education labs, as well as ancillary service fees
including technical service fees, training fees and maintenance fees in connection with our cobots.
The following images illustrate how our cobot products perform the tasks in collaboration with
human.
In a cosmetics factory, workers on the
mascara production line place the
mascara tube and brush on the carrier
for liquid fulfillment, after which our
cobot assembles the brush and tube
together.
In a fast-food restaurant, our cobot is
deployed for making fried potato chips
and chicken, where a restaurant
employee is preparing food alongside
the cobot.
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CR Series
Our CR Series includes six-axis cobot models primarily targeting industrial manufacturers seeking
to implement flexible production systems. With seven payload capacities spanning from 3 to 20
kilograms, the CR Series is engineered to optimally align with diverse customer requirements. Since the
launch in 2021, cobots from the CR Series have been adopted by manufacturers around the globe across
a wide range of industries, including automotive, consumer electronics, semiconductor, healthcare,
chemical, retail and many others. The following image serves as an illustration of our CR Series cobots.
CR3A CR5A CR7A CR10A CR12A CR16A CR20A
Our CR Series cobots boast the following product features:
• Safe yet efficient. Certified to conform with ISO 13849 and ISO/TS 15066, the CR Series
cobots have 21 built-in safety features, which provide our cobots with exceptional adaptability
and refinement in safety monitoring tailored to diverse application needs. Moreover, we have
applied our proprietary wearable flexible e-skin technology, SafeSkin, as an optional
configuration to enable the CR Series to achieve a safety speed of 1 m/s and a safety detection
range of 15 cm during the human-robot interaction, offering high efficiency without
compromising on safeguards.
• Precise and stable. Underpinned by our motion control technologies, the CR Series cobots
have achieved certain specifications, including a repeat positioning accuracy of up to ±0.02
mm, an absolute positioning accuracy as high as 0.229 mm, and a maximum tool speed
reaching 4 m/s across the product line. While individual models may vary, these benchmarks
showcase the exceptional motion precision and stability made possible through innovations,
which include kinematic calibration and compensation technology, and vibration suppression
algorithm.
• Easy to deploy and extend. The CR Series features plug-and-play design, which allows for
versatility of the product across different tasks and with different accessories from our
ecosystem, such as grippers, cameras and sensors. These accessories can be installed on our
CR cobots to accomplish customers’ intended tasks. Moreover, we have prepared ready-made
process toolkits, covering use cases of welding, stacking, material handling and screwdriving.
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• Intuitive operation. The CR Series cobots can be programmed through an intuitive graphical
user interface, enabling users to script using tablets, computers or teach pendants.
Additionally, they support a drag-to-teach programming method, allowing users to program
the cobots’ movements simply by pressing a button and physically guiding them. This
drag-to-teach capability is powered by our trajectory tracking and learning algorithm,
empowering the cobots to accurately imitate human hand motions.
Nova Series
The Nova Series features ultralight and user-friendly six-axis cobots products specifically designed
for use cases in customer-facing settings, such as coffee making and latte decoration in coffee shops,
physical therapy in clinics, and on-spot beverage making in vending machines, among others. The Nova
Series offers payload options of 2 and 5 kilograms. Approximately 33% to 44% lighter and 20% smaller
than the CR Series cobots with equivalent payloads, the Nova Series is designed to fit into
space-constrained and premium commercial environments. We have also designed a palm-sized control
box for the Nova Series cobots, minimizing the need to alter our customers’ store layouts. Additionally,
the Nova Series features a graphical user interface and drag-to-teach capabilities, significantly reducing
the learning curve and allowing users to operate the cobots without any programming knowledge. Like
the CR Series, the Nova Series also has built-in safety features for adaptability and refinement in safety
monitoring. Furthermore, we provide multiple color options for the Nova Series cobots, enabling
customers to select a color that complements their workplace aesthetics. Accessories such as electric
gripper and force sensor can be installed on our Nova cobots to accomplish customers’ intended tasks.
The following image serves as an illustration of our Nova Series cobots.
Nova2 No va5
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Magician Series
The Magician Series consists of three models, including two models of four-axis cobots, i.e.,
Magician and Magician Lite, and one model of six-axis cobots, i.e., Magician E6, all of which are
specifically designed for education institutions to assist students at various levels in STEAM curricula,
such as AI and programming, cobot application trainings, and research and scientific trainings.
According to the CIC Report, Magician is the world’s first desktop-level cobot for educational settings.
Magician by default can perform complex tasks such as 3D printing, laser engraving, calligraphy and
drawing, and allows users to develop additional functionalities through script programming. Magician
can also be flexibly combined with accessories, such as sliding rails, conveyor belts and vision systems,
to complete various training projects based on different needs. Magician has been widely recognized by
renowned educational institutions for its effectiveness as a teaching tool in university subjects, including
robotic systems, the Denavit-Hartenberg convention (a widely-used method for selecting frames of
reference in robotics), robot movement control, and robot programming, catering to students at different
educational levels. Building on the success of Magician, we introduced Magician Lite, a lightweight
version designed for K-12 education, to introduce younger generations to the world of robotics.
In April 2023, we launched Magician E6, a desktop-level six-axis cobot specifically designed for
education and research. Magician E6 is equipped with advanced hardware to enable outstanding
performance. Magician E6 supports a variety of expansion accessories, replicating real-world use cases
and creating an immersive learning and research experience.
The following image illustrates our Magician Series cobot products.
Magician Ma gician Lite Ma gician E6
We have invested heavily in developing a comprehensive education ecosystem around the Magician
Series. We were involved in compiling customized textbooks and curriculum tailored to the Magician
Series for STEAM education. Moreover, we have developed an integrated software platform to facilitate
AI learning. The Magician Series also comes with a variety of accessories to enable students to explore
additional functionalities and applications.
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M Series
Our M Series includes MG400 and M1 Pro, both of which are four-axis cobot models specifically
designed for light manufacturing customers. MG400 is a compact desktop-level four-axis cobot with a
footprint smaller than a piece of A4 paper. With a payload capacity of 750 grams and a reach of 440 mm,
MG400 is equipped with drag-to-teach and collision detection features, making it a cost-effective option
for automating tasks in small batch production. This reduces human involvement in activities such as
labeling and electronic component testing. Its all-in-one design makes MG400 both compact and
portable, suitable for flexible production environments. Additionally, MG400 is equipped with servo
motors featuring high-precision encoder and proprietary drive and controller, enabling it to achieve ±0.05
mm repeatability despite its small size. The vibration suppression algorithm enhances multi-joint motion
stability and reduces residual vibration to a certain extent. With its drag-to-teach feature and graphical
user interface, MG400 lowers the barrier to automation for many small and medium-sized enterprises.
The following image illustrates our MG400 cobot products.
MG400
M1 Pro is a four-axis SCARA cobot designed primarily for small- and medium-scale manufacturing.
Featuring an all-in-one compact design, high precision, large operating scope, comprehensive
functionalities, and flexible customization, M1 Pro is a cost-effective choice for many manufacturers
seeking to reduce costs and increase efficiency through the use of cobots and smart production. With an
integrated control box, M1 Pro eliminates hassle of additional wiring and cabling, and its plug-and-play
installation reduces connection and setup time, offering a seamless and efficient implementation process.
M1 Pro includes an incremental differential encoder interface and supports multi-threading and
in-motion I/O control for parallel processing, effectively shortening the cobot’s cycle time. In addition,
M1 Pro’s forearm is generally narrower than that of traditional industrial cobots, allowing our customers
to adopt M1 Pro in confined working space and reducing the likelihood of accidental collisions. The
embedded collision detection feature further enhances the safety of collaboration between users and M1
Pro.
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The following image illustrates our M1 Pro cobot products.
M1 Pro
Integrated Cobots
Catering to customers’ demand for different automation solutions, we have designed and introduced
integrated cobots to readily cope with specific use cases in various industries, such as palletizing,
welding, mobile operation and vocational training. Compared to our four-axis and six-axis cobots, which
are standard robots with operational robotic arms, our integrated cobots are integrated with additional
components, such as mobile base and coffee station, as well as custom programming to perform complex
tasks. We have also developed integrated cobots for coffee making, which are capable of coffee making
and latte decoration. Similar to our cobot series, our integrated cobots are also standardized products.
The following images are illustrations of our integrated cobots.
Vocational training cobotsPalletizer cobots Coffee makin g cobots
In addition to our two main customer groups, i.e., (1) cobot integrators who integrate cobots,
additional components, software systems and other services with specialized design, engineering and
programming resources, and (2) technically proficient end users with strong engineering or programming
capabilities, many customers we directly work with are less sophisticated in technical expertise. We have
developed integrated cobots to target these customers with more accessible solutions. Unlike our
standard cobots, which require additional components and custom programming to perform complex
tasks, our integrated products allow less technically inclined customers to automate their processes with
minimal adjustments. This approach opens up the benefits of cobot technology to a wider range of users
who might otherwise find the implementation challenging.
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Accessories
Our accessories for cobot products primarily include (1) modularized parts such as vision sensors,
force sensors and electric grippers that can be flexibly attached to CR Series and Nova Series, depending
on desired use cases, and (2) accessories for Magician Series to achieve better STEAM curriculum
learning. These accessories are designed to be compatible with our self-developed motion control
algorithms and overall machine structural design, optimizing the programming time of cobot accessories
and reducing the need for secondary developments. In addition, coupled with AI education curriculum
which we were involved in compiling, accessories for Magician Series help students gain an
understanding of comprehensive robotic and AI knowledge and programming skills. Our cobots must be
equipped with accessories to perform certain tasks, in which case the accessories are typically sold
together with the cobots per each customer’s order.
The following table sets forth non-exhaustive examples of tasks that can be performed by each of
our cobot series in various industries.
Cobot series Industry Task
CR Series .......... Automotive manufacturing Engine parts assembly, engine defect detection, screwdriving,
lamp dust removal, plasma cleaning of automobile parts,
instrument panel cutting, automobile triangle window
assembly, gluing, grinding, material handling for various
automotive components, and oil pipe joint assembly
3C manufacturing Screwdriving, gluing, laptop memory board assembly, electronic
parts sorting, and electronic parts handling
Semiconductor manufacturing Material handling for wafer testing and semiconductor plastic
sealing machines, and chip insertion testing
Home appliance manufacturing Refrigerator function inspection, washing machine defect
inspection, electronic control panel inspection for gas stove,
air conditioning component defect inspection, and assembly
line handling
Metal processing Material handling for raw materials, mechanical parts welding,
and laser rust removal
Lithium battery manufacturing Screwdriving, material handling, and battery cell gluing
Chemical industry Material handling, capping cosmetic bottles, sorting hazardous
chemicals, depalletizing, cutting and polishing, and labeling
Bathroom product
manufacturing
Function testing and spray painting for bathroom products
Food and beverage production Raw material handling, packing and palletizing
Commercial settings Latte art, milk tea making, fried chicken and French fries
cooking, ice cream making, bartending, unmanned vending,
noodles cooking, game interaction, film and television
shooting, and musical instrument performance
Medical Orthopedic surgery, moxibustion, and ultrasound testing
Scientific research Reagent testing, drug sorting and testing, blood sample sorting
and handling
Construction Building material handling and wall painting
Furniture manufacturing Furniture board polishing and raw material handling
Agriculture Grape picking, crop sorting, automatic charging of agricultural
machinery
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Cobot series Industry Task
Nova Series ........ P h ysiotherapy Locate moxibustion points, control the temperature and time of
moxibustion, and perform standardized massage
Agriculture Cutting and grafting plants, fixing grafted parts of the plant,
identifying ripe strawberries, picking strawberries, gently
placing picked strawberries
Food production Label food carton packaging and detect label position
Commercial settings Operate the camera and lighting equipment, control the shutter,
painting, bartending, beverage making, operate stage
equipment and arrange scenes, ice cream making, coffee
making
Scientific research Transport incubators, perform scientific research insect feeding
work, mix reagents, read and record test results
3D modeling Identify people or objects and automatically generate 3D models
Magician Series ..... Scientific research Reproduction programming, graphical programming, AI image
recognition, gesture recognition, and industry 4.0 simulation
for educational purposes
Light manufacturing Inkjet printing, mobile phone testing, mobile phone backplane
labeling, circuit board testing, and gold jewelry weighing and
sorting
Commercial settings Unmanned vending, food cooking and ice cream making
M Series .......... 3 C manufacturing Laptop labeling, tablet screen functional testing, tablet middle
frame gluing, folding screen inspection, component handling,
vibration motor assembly, component welding, component
sorting, and capacitor gluing
Automotive manufacturing Car key sorting, material handling, automotive component
assembly
Home appliance manufacturing Electronic control board testing, component handling, tablet
touch screen testing, and component plug-ins
Lithium battery manufacturing Battery cell gluing
Scientific research Sample handling for testing, test tube placement, and
pharmaceutical sortation
Commercial settings Unmanned vending, automatic coffee grinding, and glasses
cleaning
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The following table sets forth the revenue, sales volume, ASP, gross profit and gross profit margin data by six-axis cobots, four-axis cobots and
integrated cobots for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Revenue
Sales
volume ASP
Gross
profit
Gross
profit
margin Revenue
Sales
volume ASP
Gross
profit
Gross
profit
margin Revenue
Sales
volume ASP
Gross
profit
Gross
profit
margin Revenue
Sales
volume ASP
Gross
profit
Gross
profit
margin Revenue
Sales
volume ASP
Gross
profit
Gross
profit
margin
(RMB in thousands for revenue and gross profit; RMB in thousands/unit for ASP)
(unaudited) (unaudited)
Six-axis cobots ..... 25,957 394 65.9 11,455 44.1% 104,735 1,707 61.4 38,722 37.0% 134,299 2,374 56.6 63,356 47.2% 52,609 898 58.6 23,638 44.9% 63,840 1,354 47.1 30,167 47.3 %
Four-axis cobots .... 119,885 14,626 8.2 72,845 60.8% 100,869 12,524 8.1 50,848 50.4% 99,523 11,782 8.4 54,517 54.8% 40,501 4,918 8.2 21,221 52.4% 36,763 4,464 8.2 20,005 54 .4%
Integrated cobots .... 16,095 1,218 13.2 5,335 33.1% 31,596 1,560 20.3 16,372 51.8% 34,306 960 35.7 18,206 53.1% 11,989 365 32.8 5,946 49.6% 14,713 736 20.0 6,928 47.1%
Total ......... 161,937 16,238 89,635 55.4% 237,200 15,791 105,942 44.7% 268,128 15,116 136,079 50.8% 105,099 6,181 50,805 48.3% 115,316 6,554 57,100 49.5%
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• Six-axis cobots. Our revenue from six-axis cobots increased significantly from RMB26.0
million in 2021 to RMB104.7 million in 2022, primarily due the increase in the sales volume of
our six-axis cobots driven by the launch of new six-axis cobot products in late 2021, which
gained traction in 2022. Our gross profit from six-axis cobots (before write-down of
inventories) increased significantly from RMB11.5 million in 2021 to RMB38.7 million in
2022, primarily driven by the significant increase in revenue from six-axis cobots for the
reasons discussed above, partially offset by the decrease in gross profit margin of six-axis
cobots (before write-down of inventories) from 44.1% in 2021 to 37.0% in 2022. The decrease
in gross profit margin was primarily due to (1) the shift of cobot production to our in-house
facilities in 2022, which resulted in temporary cost fluctuations; and (2) the lower gross profit
margin of certain newly launched six-axis cobots for 3C manufacturing settings which we
offered for trial purpose in 2022.
Our revenue from six-axis cobots increased by 28.2% from RMB104.7 million in 2022 to
RMB134.3 million in 2023, primarily due to the increase in the sales volume of our six-axis
cobots driven by the expanded functions and use cases of our six-axis cobots, such as those for
3C and other industrial manufacturing settings, to capture the robust customer demand. Our
gross profit from six-axis cobots (before write-down of inventories) increased by 63.6% from
RMB38.7 million in 2022 to RMB63.4 million in 2023, primarily due to (1) the increase in
revenue from six-axis cobots for the reasons discussed above; and (2) the increase in gross
profit margin of our six-axis cobots (before write-down of inventories) from 37.0% in 2022 to
47.2% in 2023. The increase in gross profit margin was primarily due to (i) the improvement in
our cost management and greater economies of scale of our production activities in 2023; and
(ii) the lower gross profit margin of certain newly launched six-axis cobots for 3C
manufacturing settings which we offered for trial purpose in 2022.
Our revenue from six-axis cobots increased by 21.3% from RMB52.6 million in the six months
ended June 30, 2023 to RMB63.8 million in the six months ended June 30, 2024, primarily due
to the increase in the sales volume of our six-axis cobots driven by the launch of new six-axis
cobot products in mid 2023, which gained traction since then, as well as the steady increase in
the sales volume of other six-axis cobot products. Our gross profit from six-axis cobots (before
write-down of inventories) increased by 27.6% from RMB23.6 million in the six months ended
June 30, 2023 to RMB30.2 million in the six months ended June 30, 2024, primarily due to (1)
the increase in revenue from six-axis cobots for the reasons discussed above; and (2) the
increase in gross profit margin of our six-axis cobots (before write-down of inventories) from
44.9% in the six months ended June 30, 2023 to 47.3% in the six months ended June 30, 2024.
The increase in gross profit margin was primarily due to (i) the optimization of our supply
chain, which led to lower procurement costs of certain raw materials and components, such as
reducers, motors and machine parts; and (ii) the premium pricing of certain new six-axis
cobots offered in 2024.
• Four-axis cobots. Our revenue from four-axis cobots decreased by 15.9% from RMB119.9
million in 2021 to RMB100.9 million in 2022, as we concluded one major contract in 2021.
Our gross profit from four-axis cobots (before write-down of inventories) decreased by 30.2%
from RMB72.8 million in 2021 to RMB50.8 million in 2022, primarily driven by (1) the
decrease in revenue from four-axis cobots for the reasons discussed above; and (2) the decrease
in gross profit margin of four-axis cobots (before write-down of inventories) from 60.8% in
2021 to 50.4% in 2022. The decrease in gross profit margin was primarily due to (i) the
premium pricing of certain four-axis product in 2021, as we met the requirements of a specific
customer; and (ii) the shift of cobot production to our in-house facilities in 2022, which
resulted in temporary cost fluctuations.
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Our revenue from four-axis cobots remained relatively stable at RMB100.9 million and
RMB99.5 million in 2022 and 2023, respectively. Our gross profit from four-axis cobots
(before write-down of inventories) increased by 7.2% from RMB50.8 million in 2022 to
RMB54.5 million in 2023, primarily due to the increase in gross profit margin of four-axis
cobots (before write-down of inventories) from 50.4% in 2022 to 54.8% in 2023, as a result of
the decrease in raw material costs of certain four-axis cobot products.
Our revenue from four-axis cobots decreased by 9.2% from RMB40.5 million in the six months
ended June 30, 2023 to RMB36.8 million in the six months ended June 30, 2024, primarily due
to the decrease in the sales volume of certain four-axis cobot products, as we strategically
adjusted our product mix for education settings. Our gross profit from four-axis cobots (before
write-down of inventories) decreased by 5.7% from RMB21.2 million in the six months ended
June 30, 2023 to RMB20.0 million in the six months ended June 30, 2024, primarily due to the
decrease in revenue for the reasons discussed above. Our gross profit margin of four-axis
cobots (before write-down of inventories) increased moderately from 52.4% in the six months
ended June 30, 2023 to 54.4% in the six months ended June 30, 2024, primarily due to the
greater contribution of sales to overseas markets for certain four-axis cobot products, for
which we adopted a premium pricing in view of the local market conditions.
• Integrated cobots. Our revenue from integrated cobots increased by 96.3% from RMB16.1
million in 2021 to RMB31.6 million in 2022, primarily due to the increase in the sales volume
and ASP of our integrated cobots driven by our product development efforts, in particular
integrated cobots for vocational training, as well as the increase in market demand. Our gross
profit from integrated cobots (before write-down of inventories) increased significantly from
RMB5.3 million in 2021 to RMB16.4 million in 2022, primarily driven by (1) the increase in
revenue from integrated cobots for the reasons discussed above; and (2) the increase in gross
profit margin (before write-down of inventories) from 33.1% in 2021 to 51.8% in 2022,
primarily driven by the increase in the sales volume of high-value products, such as certain
integrated cobots for vocational training that enhanced our ASP.
Our revenue from integrated cobots increased by 8.6% from RMB31.6 million in 2022 to
RMB34.3 million in 2023, as we sold proportionately more high-value integrated cobot
products in 2023, such as integrated cobots for vocational training and welding that enhanced
our ASP. Our gross profit from integrated cobots (before write-down of inventories) increased
by 11.2% from RMB16.4 million in 2022 to RMB18.2 million in 2023, primarily due to the
increase in revenue from integrated cobots. The gross profit margin of our integrated cobots
(before write-down of inventories) remained relatively stable at 51.8% and 53.1% in 2022 and
2023, respectively.
Our revenue from integrated cobots increased by 22.7% from RMB12.0 million in the six
months ended June 30, 2023 to RMB14.7 million in the six months ended June 30, 2024,
primarily due to the increase in sales volume of certain integrated products, such as integrated
cobots for vocational training and palletizing, partially offset by the decrease in the ASP of
integrated cobots during the period. Our gross profit from integrated cobots (before
write-down of inventories) increased by 16.5% from RMB5.9 million in the six months ended
June 30, 2023 to RMB6.9 million in the six months ended June 30, 2024, primarily due to the
increase in revenue from integrated cobots for the reasons discussed above. The gross profit
margin of our integrated cobots (before write-down of inventories) decreased from 49.6% in
the six months ended June 30, 2023 to 47.1% in the six months ended June 30, 2024, primarily
because we incurred higher costs in servicing a customer’s order for integrated cobots with a
goal to integrate our products to such customer’s production lines and ensure service quality,
which led to a significant reduction in gross profit for such order. Such customer order incurred
higher costs, primarily in connection with the personnel to install and configure the integrated
cobots, which were newly launched, to ensure their smooth operations and accumulate
experience to further improve and promote the implementation of such new products.
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The following table sets forth the revenue, sales volume, gross profit and gross profit margin data (before write-down of inventories) of products by
application settings for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin
(RMB in thousands for revenue and gross profit)
(unaudited) (unaudited)
Industrial ......... 44,638 2,865 19,097 42.8% 124,436 4,874 47,607 38.3% 151,181 5,589 71,670 47.4% 62,085 2,270 28,131 45.3% 66,239 1,922 31,819 48.0%
Education ......... 127,671 13,359 73,603 57.7% 111,754 10,819 57,456 51.4% 122,384 9,240 63,707 52.1% 44,213 3,837 23,534 53.2% 48,727 4,377 26,422 54.2%
Commercial ........ 1,338 14 216 16.1% 4,244 98 1,427 33.6% 12,106 287 5,919 48.9% 3,468 74 1,449 41.8% 5,187 255 827 15.9%
Total ........... 173,647 16,238 92,916 53.5% 240,434 15,791 106,490 44.3% 285,671 15,116 141,296 49.5% 109,766 6,181 53,114 48.4% 120,153 6,554 59,068 49.2%
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• Industrial settings. Our revenue from industrial settings increased significantly from RMB44.6
million in 2021 to RMB124.4 million in 2022, primarily due to the increase in the sales volume
and selling price of certain cobots for industrial settings driven by the launch of certain new
cobot products for the use in industrial settings. Our gross profit from industrial settings
(before write-down of inventories) increased significantly from RMB19.1 million in 2021 to
RMB47.6 million in 2022, primarily driven by the significant increase in revenue from
industrial settings for the reasons discussed above, partially offset by the decrease in gross
profit margin of industrial settings (before write-down of inventories) from 42.8% in 2021 to
38.3% in 2022. The decrease in gross profit margin was primarily due to (1) the shift of cobot
production to our in-house facilities in 2022, which resulted in temporary cost fluctuations;
and (2) the lower gross profit margin of certain newly launched cobots for 3C manufacturing
settings which we offered for trial purpose in 2022.
Our revenue from industrial settings increased by 21.5% from RMB124.4 million in 2022 to
RMB151.2 million in 2023, primarily due to the increase in the sales volume of our cobots for
industrial settings driven by the expanded functions and use cases of cobots for 3C and other
industrial manufacturing settings, to capture the robust customer demand. Our gross profit
from industrial settings (before write-down of inventories) increased by 50.5% from RMB47.6
million in 2022 to RMB71.7 million in 2023, primarily due to (1) the increase in revenue from
industrial settings for the reasons discussed above; and (2) the increase in gross profit margin
of industrial settings (before write-down of inventories) from 38.3% in 2022 to 47.4% in 2023.
The increase in gross profit margin was primarily due to (i) the improvement in our cost
management and greater economies of scale of our production activities in 2023; and (ii) the
lower gross profit margin of certain newly launched cobots for 3C manufacturing settings
which we offered for trial purpose in 2022.
Our revenue from industrial settings increased by 6.7% from RMB62.1 million in the six
months ended June 30, 2023 to RMB66.2 million in the six months ended June 30, 2024,
primarily due to the increase in the selling price of certain cobots for industrial settings driven
by the steady increase in demand from our targeted markets and customers, the premium
pricing of certain new six-axis cobots offered in 2024, as well as the continual enhancements in
the functions and use cases of our cobots. Our gross profit from industrial settings (before
write-down of inventories) increased by 13.1% from RMB28.1 million in the six months ended
June 30, 2023 to RMB31.8 million in the six months ended June 30, 2024, primarily driven by
(1) the increase in revenue for the reasons discussed above; and (2) the increase in gross profit
margin of industrial settings (before write-down of inventories) from 45.3% in the six months
ended June 30, 2023 to 48.0% in the six months ended June 30, 2024, primarily due to the
premium pricing of certain new-six cobots offered in 2024.
• Education settings. Our revenue from education settings decreased by 12.5% from RMB127.7
million in 2021 to RMB111.8 million in 2022, as we concluded one major contract in 2021.
Our gross profit from education settings (before write-down of inventories) decreased by
21.9% from RMB73.6 million in 2021 to RMB57.5 million in 2022, primarily driven by (1) the
decrease in revenue from education settings for the reasons discussed above; and (2) the
decrease in gross profit margin of education settings (before write-down of inventories) from
57.7% in 2021 to 51.4% in 2022. The decrease in gross profit margin was primarily due to (i)
the premium pricing of certain cobot product for the use in education settings in 2021, as we
met the requirements of a specific customer; and (ii) the shift of cobot production to our
in-house facilities in 2022, which resulted in temporary cost fluctuations.
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Our revenue from education settings increased by 9.5% from RMB111.8 million in 2022 to
RMB122.4 million in 2023, as the demand for cobots in education settings was temporarily
affected by the COVID-19 pandemic in 2022. Our gross profit from education settings (before
write-down of inventories) increased by 10.9% from RMB57.5 million in 2022 to RMB63.7
million in 2023, primarily due to the increase in revenue for the reasons discussed above. The
gross profit margin of education settings remained relatively stable at 51.4% and 52.1% in
2022 and 2023, respectively.
Our revenue from education settings increased by 10.2% from RMB44.2 million in the six
months ended June 30, 2023 to RMB48.7 million in the six months ended June 30, 2024,
primarily due to the increase in sales volume of cobots for education settings as we further
improved our market penetration to with relevant products. Our gross profit from education
settings (before write-down of inventories) increased by 12.3% from RMB23.5 million in the
six months ended June 30, 2023 to RMB26.4 million in the six months ended June 30, 2024,
primarily due to the increase in revenue for the reasons discussed above. Our gross profit
margin of education settings (before write-down of inventories) remained relatively stable at
53.2% and 54.2% in the six months ended June 30, 2023 and 2024, respectively.
• Commercial settings. Our revenue from commercial settings increased significantly from
RMB1.3 million in 2021 to RMB4.2 million in 2022, primarily due to the significant increase
in the sales volume of cobots for commercial settings driven by the launch of certain new cobot
products for the use in commercial settings. Our gross profit from commercial settings (before
write-down of inventories) increased significantly from RMB0.2 million in 2021 to RMB1.4
million in 2022, primarily driven by the increase in revenue for the reasons discussed above, as
well as the increase in gross profit margin (before write-down of inventories) from 16.1% in
2021 to 33.6% in 2022, primarily due to the higher profit margin of certain newly launched
cobot products for the use in commercial settings.
Our revenue from commercial settings increased significantly from RMB4.2 million in 2022 to
RMB12.1 million in 2023, primarily due to the significant increase in the sales volume of
cobots for commercial settings driven by increased market demand. Our gross profit (before
write-down of inventories) from commercial settings increased significantly from RMB1.4
million in 2022 to RMB5.9 million in 2023, primarily driven by the increase in revenue for the
reasons discussed above, as well as the increase in gross profit margin (before write-down of
inventories) from 33.6% in 2022 to 48.9% in 2023, as we achieved greater economies of scale
and cost efficiency along with the significant increase in sales volume.
Our revenue from commercial settings increased by 49.6% from RMB3.5 million in the six
months ended June 30, 2023 to RMB5.2 million in the six months ended June 30, 2024,
primarily due to the increase in the sales volume of cobots for commercial settings as we
secured more contracts from our customers. Our gross profit from commercial settings (before
write-down of inventories) decreased by 42.9% from RMB1.4 million in the six months ended
June 30, 2023 to RMB0.8 million in the six months ended June 30, 2024, primarily due to the
decrease in our gross profit margin of commercial settings (before write-down of inventories)
from 41.8% in the six months ended June 30, 2023 to 15.9% in the six months ended June 30,
2024, that was mainly caused by the lower gross profit margin of certain newly launched
six-axis cobots for commercial settings which we offered for trial purpose in 2024.
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The following table sets forth the revenue, sales volume, gross profit and gross profit margin data (before write-down of inventories) of products by
geographic market for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin Revenue
Sales
volume
Gross
profit
Gross
profit
margin
(RMB in thousands for revenue and gross profit)
(unaudited) (unaudited)
Mainland China ...... 89,790 6,300 48,786 54.3% 100,313 4,176 38,299 38.2% 116,197 3,716 47,817 41.2% 39,035 1,512 15,183 38.9% 46,283 1,576 18,449 39.9%
European markets ..... 40,598 5,696 21,657 53.3% 65,964 6,138 32,253 48.9% 68,306 4,724 37,320 54.6% 31,885 2,159 17,229 54.0% 28,289 2,899 15,489 54.8%
Americas ......... 16,419 1,353 8,848 53.9% 30,708 2,248 14,839 48.3% 37,550 2,638 20,980 55.9% 17,113 1,143 9,468 55.3% 16,291 843 8,907 54.7%
Asia-Pacific markets . . . 26,840 2,889 13,625 50.8% 43,449 3,229 21,099 48.6% 63,618 4,038 35,179 55.3% 21,733 1,367 11,234 51.7% 29,290 1,236 16,223 55.4%
Total ........... 173,647 16,238 92,916 53.5% 240,434 15,791 106,490 44.3% 285,671 15,116 141,296 49.5% 109,766 6,181 53,114 48.4% 120,153 6,554 59,068 49.2%
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Our revenue from each geographic market above increased in absolute amount from 2021 to 2023,
primarily due to the expansion and enhancement of our cobot product matrix and increased sales and
marketing efforts, accompanied by the higher market acceptance and demand of our cobot products.
However, we experienced a decline in our sales volume from mainland China in 2022, as we concluded
one major contract in 2021 for our four-axis cobots. We generally had a lower gross profit margin in 2022
in each geographic market above, primarily due to the shift of cobot production to our in-house facilities
in 2022, which resulted in temporary cost fluctuations. In particular, our gross profit margin in mainland
China was relatively low in 2022, partially due to the impact of the lower gross profit margin of certain
newly launched six-axis cobots for 3C manufacturing settings which we offered for trial purpose in 2022.
Our revenue from mainland China increased from the six months ended June 30, 2023 to the six
months ended June 30, 2024, primarily due to the expansion and enhancement of our cobot product
matrix, which captured the market demand from Chinese customers, resulting in an increase in our gross
profit of mainland China for the same periods. Our revenue from the European markets decreased from
the six months ended June 30, 2023 to the six months ended June 30, 2024, as we were still building up
the market awareness and acceptance of our new products in such market, which typically took longer
than such process in our domestic market, as well as the timing of revenue recognition. Our revenue from
the Americas decreased from the six months ended June 30, 2023 to the six months ended June 30, 2024,
primarily due to the changes in procurement schedule of certain local customer, which also caused a
decrease in our gross profit of the Americas for the same periods. Our revenue from the Asia-Pacific
markets increased from the six months ended June 30, 2023 to the six months ended June 30, 2024, along
with an increase in gross profit margin of the Asia-Pacific markets for the same periods, primarily due to
the expansion and enhancement of our cobot product matrix, which captured the demand from certain
local markets, especially cobot products of higher profit margin.
Commercialization
We are primarily engaged in the design, development, manufacturing and commercialization of
cobots. All of our cobot products are designated Specialist Technology Products as defined under Chapter
18C of the Listing Rules. Our Directors are of the view that our cobot products fall within an acceptable
sector of a Specialist Technology Industry as defined under Chapter 18C of the Listing Rules on the
following basis, as advised by CIC: (1) our Magician Series cobot products, designed for application
scenarios in educational settings, are sensor-driven and programmable products, and thus fall within the
definition of smart product designs, and (2) all of our product series other than the Magician series
involve the engineering of robots, computer software and machines for the improved performance of
tasks and automation processes. We have adopted a transaction-based model for the sales of our cobot
products. The following table sets forth a summary of how all of our cobot products fall within an
acceptable sector of a Specialist Technology Industry as defined under Chapter 18C of the Listing Rules.
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Specialist technology products
Specialist technology industry
acceptable sector Main function analysis*
Major customer type and customer
demand drivers Pricing and payment
CR Series cobots . . . Robotics and
automation (robot
technology)
The CR Series demonstrates remarkable versatility
across multiple industries. In automotive
manufacturing, it significantly improves precision
in assembly and defect detection while enhancing
efficiency in complex processes like plasma
cleaning and gluing. It also increases safety by
handling hazardous materials. In the electronics
and semiconductor industries, the CR Series
ensures consistency in delicate operations such as
chip insertion testing and electronic parts sorting.
For home appliance and metal processing, it
increases inspection efficiency for various
appliances and improves safety in welding and
laser rust removal. In chemical industries, the CR
Series enhances safety in handling hazardous
chemicals. Its applications extend to commercial
and medical fields, where it introduces innovative
automated services like latte art and bartending,
and assists in precise medical procedures such as
orthopedic surgery.
Our customers are
primarily corporations
in manufacturing
industries covering
automotive
manufacturing, 3C
manufacturing,
mechanical
manufacturing, and
semiconductor
fabrication, as well as
research laboratories
and educational
institutions.
According to the CIC
Report, the rapid
growth of the cobot
market is primarily
driven by several key
factors. Technology
advancements
including AI
integration not only
improves cobot
capabilities, but also
brings about economies
of scale, which has
reduced costs and
made cobots more
affordable.
Additionally, labor
shortages and rising
labor costs due to an
aging population have
resulted in an
increasing demand for
automation.
When determining the
price for our cobot
products, the
competitive landscape
of a particular
geographical market
is one of the major
factors that we
consider, which
includes the pricing
of our major
competitors in that
market. We have also
adopted tiered pricing
strategies based on
procurement amount
and relationship with
specific customers,
taking into
consideration base
factors such as the
cost incurred.
Depending on
distributors’ demand
and their credit history
with us, we may
require our distributors
to make payment
before the delivery of
our products. For
certain distributors
with stable business
relationships with us,
we may provide
short-term payment
period. For details, see
“—Our Sales
Network.”
Nova Series cobots . . Robotics and
automation (robot
technology)
The Nova series excels in specialized applications
across diverse fields. In physical therapy, it
improves treatment precision in procedures like
moxibustion and massage, while standardizing
therapy procedures for consistent results. In
agriculture, the Nova Series increases efficiency in
delicate tasks such as plant grafting and strawberry
picking, significantly reducing crop damage during
harvesting. Its capabilities extend to various other
commercial and research applications, where it
enhances creative output in fields like photography
and beverage preparation, while also improving
experiment accuracy in scientific research. The
Nova Series also accelerates the 3D modeling
process through automated object recognition,
opening new possibilities in design and
prototyping.
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Specialist technology products
Specialist technology industry
acceptable sector Main function analysis*
Major customer type and customer
demand drivers Pricing and payment
M Series cobots . . . Robotics and
automation (robot
technology)
The M Series brings improvements to precision
manufacturing and research. In electronics
manufacturing, it enhances precision in tasks like
screen testing and component assembly, while
increasing production line speed for repetitive
tasks. For automotive and home appliance
industries, the M Series improves assembly
accuracy for various components and increases
flexibility in handling different product models. In
battery manufacturing and scientific research, it
enhances safety in potentially hazardous processes
while improving experiment precision and
efficiency. This series is particularly adept at
handling tasks that require both high precision and
rapid execution.
Magician Series
cobots .......
Robotics and
automation (smart
product designs)
The Magician Series are specifically designed for
education institutions to assist students at various
levels in STEAM curricula, such as AI and
programming, cobot application trainings and
research and scientific trainings. Magician by
default can perform complex tasks such as 3D
printing, laser engraving, calligraphy and drawing,
and allows users to develop additional
functionalities through script programming.
Magician can also be flexibly combined with
accessories, such as sliding rails, conveyor belts
and vision systems, to complete various training
projects based on different needs.
* For more information on the tasks our cobots are capable of for the improved performance of tasks and automation
processes, see “Business—Our Collaborative Robot Products.”
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The following table sets forth the timeline of our commercialization of each of our cobot product
series.
Product series Magician Series Integrated Cobots CR Series M Series Nova Series
Commencement of
revenue generation .. 2017 2018 2021 2021 2022
Market Opportunity and Competition
The global cobot industry, as measured by sales revenue, has grown from US$466.6 million in 2019
to US$1,039.5 million in 2023, at a CAGR of 22.2%. The market size is expected to reach US$4,950.0
million in 2028, at a CAGR of 36.6% between 2023 and 2028. The rapid growth of the cobot market is
primarily driven by several key factors. Technology advancements including AI integration not only
improve cobot capabilities but also bring about economies of scale, which has reduced costs and made
cobots more affordable. Additionally, labor shortages and rising labor costs due to an aging population
have resulted in an increasing demand for automation. As a result, businesses in commercial sectors are
increasingly adopting cobots for use cases such as unmanned retail, assisted meal preparation and other
services to improve the operational efficiency. In particular, China is playing an increasingly important
role in the global cobot market, with its share in the global cobot market projected to increase from 26.3%
in 2023 to 37.2% in 2028, at a CAGR of 46.5% from 2023 to 2028.
All the major sectors in the cobot industry show strong growth momentum. The industrial sector
dominates the global cobot market, with a projected CAGR of 28.7% between 2023 and 2028. Key growth
areas include the automotive and components, 3C electronics, and semiconductor industries. The
commercial sector is expected to experience the fastest growth, with a CAGR of 75.3% between 2023 and
2028, driven by applications in unmanned retail, assisted meal preparation and other services. The
medical and healthcare sector is another significant growth area, with a CAGR of 37.6% between 2023
and 2028. The aging population and rising caregiver costs are driving the adoption of cobots in
physiotherapy, rehabilitation, and medical assistance applications. The scientific research and education
sector is also poised for growth, with a CAGR of 43.0% between 2023 and 2028, driven by the increasing
adoption of cobots for industry-academia-research integration projects (ɓ᜗ʷධͦ ), STEAM
education, research assistance and training simulations.
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The global cobot industry is relatively concentrated, with the top five market players accounting for
approximately 46.3% of the market share in 2023 in terms of global cobot shipment volume. Four of the
top five players are Chinese manufacturers, indicative of China’s significant role in shaping the global
cobot industry. In 2023, we ranked second among all market players in the global cobot industry and
ranked first among all Chinese cobot companies, each measured by shipment volume. According to the
same source, we rank seventh in the global cobot industry with a global market share of 3.6% in terms of
global revenue generated from cobots in 2023. Our revenue has grown at a CAGR of 28.3% between 2021
and 2023, outpacing the industry average. The following table sets forth the ranking of the top five market
players in the global cobot industry in terms of shipment volume in 2023.
Ranking Company Overview Listing
status
1 Universal
Robots(1) 1.6 14.8
2O ur Company 1.4 13.0
3 AUBO
• Established in 2015, headq uartered in Beijin g, China.
It is a high-tech enterprise specializing in the research,
development, production, and sale of cobots.
0.8 7.4
4 Elephant
Robotics 0.7 6.5
5 JAKA 0.5 4.6
Sub-total
Others
Total
5.0
5.8
10.8
46.3
53.7
100.0
• Established in 2005, headq uartered in Denmark. It
launched the world’s first cobot in 2008 and focuses on
the development and commercialization of cobots that
enable automation upgrades in the industrial sector.
Market
share
(%)
Geographical
 coverage of
products
• Established in 2015, headq uartered in Shenzhen, China.
Our Compan y is a compan y that specializes in the
development, manufacturing and commercialization of
cobots.
• Established in 2016, headq uartered in Shenzhen,
China. It foc uses on the de velopment and
manufacturing of cobots as
well as the development of
relevant platform software.
• Established in 2014, headq uartered in Shanghai, China.
It foc uses on the research, de velopment,
manufacturing, and sales of cobots, as well as the
integration of cobot systems.
• Acq uired by a
publicly-listed
company in
the U.S.
• Applied for listin g
 on HKEX
• Not listed
• Not listed
• Applied for listin g
 on SSE STAR
 Market
• China and o ver 50
overseas countries
and regions
• China and o ver 80
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
• China and o ver 50
overseas countries
and regions
Global cobots
shipment
volume, 2023
(units in
ten thousands)
Sources: Annual reports, expert interviews, GGII, MIR, CIC
(1) Universal Robots focuses on the development and commercialization of cobots that can be used in a wide range of
industrial production environments. It commercially launched the world’s first cobot in 2008, making it a
well-recognized cobot brand in the industry.
Leading companies in the global cobot industry offer a wide range of cobot models with varying
payload capacities and technical specifications to cater to the diverse needs of customers across different
industries. As the cobot industry continues to grow and evolve, companies that can effectively combine
technological innovation, product diversification, and strong customer relationships are likely to
maintain their competitive edge. The intense competition among the top players is expected to drive
further advancements in cobot technology and expand the range of applications. The following table sets
forth product comparisons among the top five market players in the global cobot industry.
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Comparative analysis of product indicators, 2023
Company Axis models of cobots
Payload capacity of six-axis cobots(1)
Our Company √√√√√
Universal
Robots
Four-axis and six-axis
Six-axis
Six-axis
Four-axis and six-axis
Six-axis
× √√√√
AUBO × √√√√
Elephant
Robotics √ ××××
JAKA √ √ √ √ ××
<3kg
3-7kg
(excluding 7kg)
7-12kg
(excluding 12kg)
12-20kg
(excluding 20kg)
20-30kg
(excluding 30kg)
√
√
×
×
×
≥30kg
Sources: Annual reports, expert interviews, CIC
(1) The payload capacity of six axis is chosen for the comparison, as major comparable companies generally offer six-axis
cobots. Cobots can be categorized into light payload (<7kg), medium payload (7-12kg), heavy payload (12-20kg),
super heavy payload (20-30kg) and extra heavy payload (>30kg). Specifically, the light payload cobots for the
commercial sector typically feature a payload capacity of less than 3kg, which are classified as a distinct category. The
selected payload range for the above comparison aligns with the industry classification.
According to the CIC Report, in the cobot industry, performance standards focus on five key
dimensions: accuracy, stability, reliability, flexibility, and safety. Key technical indicators include repeat
positioning accuracy, absolute positioning accuracy, non-contact detection distance and
payload-to-weight ratio. These performance indicators, as listed by cobot manufacturers in the market,
subtly influence the way end-users evaluate and select cobot products. The smaller the repeat positioning
accuracy value, the higher the precision of the cobot when performing the same task repeatedly.
Similarly, the smaller the absolute positioning accuracy value, the more accurate the cobot can achieve
the desired position when executing tasks. Additionally, the non-contact detection distance reflects the
distance at which the cobot can detect objects without physical contact. The greater the non-contact
detection distance, the higher the reliability and safety of the cobot in human-robot interaction.
Furthermore, a higher payload-to-weight ratio indicates greater safety and flexibility of the cobot.
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OUR CORE TECHNOLOGIES
Leveraging our interdisciplinary research and development capabilities, we have become one of few
in the global cobot industry, according to the CIC Report, that have developed proprietary full-stack
technologies that cover all the key aspects in the cobot development cycle, encompassing cobot design
and manufacturing, key components development, controller system development, key algorithm
formulation and iteration, versatile cobot deployment for different tasks, and AI capabilities
development. Our core technology capabilities can be broadly categorized into five technology clusters,
including (1) key component design and development, (2) universal control platform, (3) safety
technologies, (4) robotic technologies, and (5) AI technologies, as illustrated by the chart below.
Teleoperation
Motion capture
High-performance
real-time
control system
Motor and
encoder Integrated drive
and control
Integrated joint
Intelligent
human-robot
interaction platform
Imitation learning
Deep learning
Collision detection
Non-contact
Collision prevention
Kinematic calibration
and compensation
Complex continuous
trajectory control
Compliance and force
control
Robotic
Technologies
AI Technologies
Universal Control Platform
Self-developed Modularized Key
Component Platform
Safety
Technologies
Self-developed Modularized Key Component Platform
Our self-developed modularized key component platform enables us to achieve easy maintenance,
rapid iteration, and flexible customization in our products so that we can rapidly respond to evolving
customer needs. In particular, by modularizing key components, we are able to easily replace damaged
components and/or upgrade key components and install them on the finished products. This platform
allows us to swiftly navigate market changes while ensuring high-quality and stability of our products.
Benefiting from such platform, we can reduce the new product development cycle to as few as seven
months, offering us a distinct competitive advantage in the fast-paced cobot industry. Our self-developed
modularized key component platform is supported by three core technologies, i.e., motor and encoder
technology, integrated drive and control technology, and integrated joint technology. The details of these
three technologies are set forth below.
• Motor and encoder technology. The motor system composed of motors and encoders is the core
power unit of cobots and is the key to optimizing cobots’ payload and movement accuracy,
according to the CIC Report. In particular, we have developed a proprietary high-output torque
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frameless motor integrated with a dual encoder featuring an integrated vibration damping
design. We insisted on in-house design and development of these key components, as such
strategy has allowed us to retain control over the design and quality of our key components,
eliminate reliance on outside suppliers, and effectively reduce our cobots’ production costs.
• Integrated drive and control technology. While a motor generally needs to be equipped with a
servo, we use multi-axis integrated servo technology to enable a single servo to control
multiple motors. This approach significantly simplifies the wiring scheme, enhances drive
power, and effectively reduces the size of the control box and the weight of our cobots.
• Integrated joint technology. Our integrated joint integrates torque generation, transmission and
control, and is a key module unit of six-axis cobots. The motor and gear reducer inside our
self-developed integrated joint adopt a decoupled design, which can be easily disassembled
and replaced, making maintenance simple. At the same time, a double bearing structure is used
to support the motor rotor, which reduces radial runout and greatly improves the stability of
cobot operations. We were a participant contributing to the formulation of a national standard
for Integrated Robot Joint Performance and Test Methods (
ঐʿ༊᜕
ج).
Universal Control Platform
We have developed a universal control platform that has achieved multi-platform, multi-device and
plug-and-play interoperability. This platform consists of high-performance real-time control system and
intelligent human-robot interaction platform, the details of which are set forth below.
• High-performance real-time control system. This system enables the controller to accomplish
real-time multi-cobot operation and master-slave control for teleoperation and support rapid
access and real-time processing of multiple sensing elements, such as vision, proximity and
force sensing. These are primarily achieved by optimized multi-task real-time control system,
hierarchical intelligent system architecture and EtherCAT, an Ethernet-based fieldbus system,
with high communication rate.
• Intelligent human-robot interaction platform. This platform uses an efficient and convenient
graphical programming method, which only requires users to drag and drop in order to quickly
generate various applications, effectively lowering the barriers to use our cobot products as it
does not require complex programming skills. Combined with our cross-platform plug-in
technology, which completes deployment on multiple platforms through standardized code and
code module reuses, our cobots can be operated through major operating platforms, including
Windows, iOS and Android, and could be integrated into third party modules and accessories,
such as electric grippers, without changing the underlying codes.
Safety Technologies
Aimed at seamlessly integrating cobots into human workspace and eliciting trust among human
workers, our core safety technologies encompass collision detection technology and non-contact
collision prevention technology, which are often deployed together under a redundant dual-layer safety
control architecture (࿴ ) to feature both agile pre-collision evasion and instant
post-collision adjustment, offering additional layers of protection and enabling our cobots to operate
more efficiently:
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• Collision detection technology. Built upon dynamic models, we have developed a robot joint
torque output constraint control method and a collision detection method, which allow for
feedforward adjustment and limitation of the joint output torque, preventing injuries or
damage that could result from excessive force exertion by the cobots. Cobots equipped with
such technologies have been widely deployed in fields, such as electronics and semiconductor
manufacturing, and our relevant patents have received the 24th China Patent Excellence
Award.
• Non-contact collision prevention technology. We have developed a proprietary non-contact
collision prevention technology, featuring wearable flexible e-skin technology, SafeSkin,
which detects the approach of objects within a 15 cm range, the highest among all similar
commercialized cobots, according to the CIC Report, and responds rapidly by either ceasing
movement or taking evasive action to effectively prevent the imminent collisions. The
SafeSkin technology is suitable for high-speed, heavy-load use cases, which significantly
improves the safety speed of our cobots to 1 m/s, well above the PRC national standard of
0.25 m/s, according to the CIC Report. Our human-robot interaction technology based on
e-skin admittance control has been acclaimed by an expert group from the China Machinery
Industry Federation as internationally leading.
In addition, to address the safety risks and hardware failure risks arising from high speeds and
excessive power during intense operations, we have developed an independent safety control
architecture, which employs dual redundant CPUs to conduct real-time monitoring of key operating
status for the cobot.
Robotic Technologies
Our core robotic technologies primarily focus on motion control and planning technologies, which
are essential in achieving real-time control and monitoring of the cobot’s movement position, speed and
force to ensure its ability to execute stable, precise, smooth and adaptive movements. Our motion control
and planning technologies primarily include the following three technologies.
• Kinematic calibration and compensation technology (
໾ᎵҦஔ ). Combined
with proprietary compensation models and high-speed iterative control algorithms, our
kinematic calibration and compensation technology has improved the absolute positioning
accuracy to 0.229 mm primarily by obtaining a more accurate cobot structural parameter model
through the kinematic calibration method and reducing the calculation error of the cobot
position. According to an expert group from the China Machinery Industry Federation, our
kinematic calibration and compensation technology was a major innovation in our
internationally advanced high-performance smart cobot projects.
• Complex continuous trajectory control technology (
༦છՓҦஔ ). We have
developed a series of high-performance motion control algorithms and spatial trajectory
transition methods which can achieve consistent and smooth curvature transitions of
trajectories under both low and high-speed conditions. Our acceleration and deceleration
planning algorithm enables the cobots to adaptively adjust motion parameters according to the
torque limit of their joints. Coupled with trajectory vibration suppression techniques, this
allows optimized cycle time and stability. Our complex continuous trajectory control
technology was instrumental in the success of Research and Development of Key Technologies
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for High-Performance Heavy-Load Six-Axis Cobots (՘Ъዚኜɛᗫᒟ
೯ ), a key technological research project in Shenzhen.
• Compliance and force control technology (නɢછҦஔ ). Our compliance and force control
technology uses adaptive admittance and arm-hand coordinated control to enable simultaneous
control of both position and force, quickly adjusting movements based on required forces. This
capability allows the cobots to achieve high-precision constant force control over curved
trajectories and enable them to perform delicate tasks such as component assembly, surface
polishing and therapeutic massage. Meanwhile, in response to the increasing demand for
complex curve planning and force control in use cases such as surface grinding and therapeutic
massage, we have developed a spline force control algorithm to achieve high-precision
constant force control for curved surface trajectories.
AI Technologies
According to the CIC Report, we are an early adopter in the advanced cobot technology
development, capitalizing on our intelligent perception and interaction technology and AI capabilities.
Our intelligent perception and interaction technology seamlessly integrates multi-sensory elements, such
as vision, force, touch and proximity, which is fully integrated with the foundational motion control
algorithms, enabling rapid perception in unstructured environments and intelligent human-robot
collaboration. Our intelligent perception and interaction technology primarily comprises teleoperation
technology and motion capture and imitation technology.
• Teleoperation technology. Teleoperation technology enables remote operation of our cobots in
complex or dangerous environments, featuring high sensitivity and rapid response. Although
teleoperation technology itself does not involve the use of AI, it serves as effective collection
channels for high-quality data in connection with AI training for our cobots, which is
instrumental for rapid autonomous operation. Notably, we are among a few cobot companies in
China, according to the CIC Report, that have developed a proprietary force feedback-enabled
teleoperation interface, which features a bilateral force feedback control architecture and
achieves high real-time performance and transparent remote robot control.
• Motion capture and imitation technology. We have developed motion capture and imitation
technology, which addresses the flexibility, efficiency, intelligence and adaptability in robotic
teaching. This technology enables cobots to quickly learn various complex skills by using
vision sensors to capture and imitate hand movements, which has been applied to clothing
manufacturing and commercial applications such as coffee making and latte decoration.
Our AI learning capabilities are manifested in our AI-empowering platform, X-Trainer, which is
built upon large visual language model and imitation learning neural network. Large visual language
model enables our cobots to comprehensively evaluate their working environment and interactions with
human and guide our cobots to perform corresponding tasks. X-Trainer features dual-arm teleoperation
imitation learning system, which accelerates imitation learning and integrates with reinforcement
learning for rapid autonomous operation post-training.
Underpinned by the deep learning and imitation technologies, X-Trainer is notable for its
generalized learning abilities, which is more efficient in skill acquisition than other cobots with similar
generalized learning abilities, according to the CIC Report. Empowered by X-Trainer, our cobots can
autonomously wipe away stains scattered on the plate, and can also formulate grabbing postures for items
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of different shapes scattered on the table. The following images illustrate the use of large visual language
model and imitation learning neural network in our current cobot products.
RESEARCH AND DEVELOPMENT
We have established interdisciplinary research and development capabilities that draw upon a
diverse range of fields, such as mechanics engineering, computer science, control systems, human-robot
interaction, artificial intelligence, microelectronic circuits technology, and sensor technology. Our
in-house research and development team strives to expand the available functionalities and use cases of
our cobot products, accommodating specific needs of various different sectors. During the Track Record
Period, our research and development expenses were RMB46.9 million, RMB52.1 million, RMB70.5
million, RMB31.2 million and RMB31.4 million in 2021, 2022 and 2023 and the six months ended June
30, 2023 and 2024, respectively, representing 26.9%, 21.6%, 24.6%, 28.4% and 26.1% of our revenue in
the respective years/periods.
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We have not in-licensed any material intellectual property rights or outsourced any research and
development processes to third parties. In addition, except for certain research and development projects
with government grants, we generally do not undertake any research and development projects in
collaboration with third parties. During the Track Record Period, such government research and
development projects primarily included projects for e-skin technology development, human-robot safety
strategy research, autonomous learning of complex skills with multiple degrees of freedom and integrated
joints technology, among others.
Since our inception, we have not been subject to any legal claims or proceedings that may have an
influence on the research and development of our cobot products.
Our Research and Development Team and Core Members
As of the Latest Practicable Date, we had a research and development team of 140 industry experts
and senior engineers in the robotics industry, accounting for over 25% of our workforce. Our research and
development team is led by five core members. The following table sets forth the details of our core
research and development members.
Core research and
development members Profile
Mr. Liu Peichao ............ M r . L i u Peichao is our founder, Controlling Shareholder,
chairman of our Board, executive Director and general manager.
He holds a bachelor’s degree in mechanical design and
automation and a master’s degree in mechanical engineering from
Shandong University. As our founder, he was instrumental in the
development of our first desktop cobot product and led our
research and development to conquer various core technologies
such as servo technology and controller technology, laying the
foundation for our future research and development direction.
Mr. Lang Xulin ............. M r . Lang Xulin is our co-founder, Director and chief scientist. He
holds a bachelor’s degree in mechanical design, manufacturing
and automation as well as a master’s degree in mechanical design
and theory from Shandong University. As our core research and
development member, he has led the development of core
algorithms for our cobot products, including those in connection
with high-performance motion control, SafeSkin, imitation
learning, end-to-end control and teleoperation, among others.
Mr. Jiang Yu ............... M r . Jiang Yu is our research and development director and deputy
general manager. He holds a bachelor’s degree in mechanical
design and automation from Hunan University of Technology as
well as a master’s degree in mechanical engineering from
Shandong University, and has the title of senior engineer. As the
head of our research and development department, he leads the
development of key cobot components such as multi-axis servo
actuators, encoders and safety controllers.
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Core research and
development members Profile
Mr. Liu Zhufu .............. M r . L i u Zhufu is our deputy general manager. He holds a
bachelor’s degree in automation from Shandong University. He
led our research and development team to complete the product
development and commercialization of our CR Series and
MG400, organized the development of cobot operating systems,
intelligent sensing and safe interaction technologies, and created
a platform for operating systems and software frameworks.
Mr. Xie Junjie .............. M r .X i e Junjie is our product director. He holds a master’s degree
in information and automation engineering from the University of
Bremen in Germany. With over eight years of industry
experience, he is a core member of a research and development
project for human-robot industrialization (೯
ʿପุʷ ) in Guangdong Province.
We retain key management and technical staff with competitive remuneration packages and welfare
benefits. We also invest in training programs to upskill our key management and technical staff. In the
event of termination of employment requested by a key staff, we closely communicate with the staff for
the reason of departure and feedback for us. We also recruit candidates with relevant knowledge and
skills by online recruitment, internal referrals and employment agencies, among others, to avoid the
negative impact that could be caused by the departure of any key staff. The salient terms of agreements
with management and technical staff are set out below.
• No conflict. During the employment, the employee shall not engage in any other job, whether
full-time or part-time.
• Inventions arrangement. We own all rights, titles and interests (including patent rights,
copyrights, trade secret rights and all other intellectual property rights of any sort throughout
the world) relating to any and all inventions (whether or not patentable), designs, know-how,
ideas and information made, conceived or reduced to practice, in whole or in part, by the
employee during the term of the employment contract to the fullest extent allowed by
applicable laws, and the employee shall promptly disclose all inventions to us.
• Proprietary information arrangement. All inventions and all other business, technical and
financial information (including, without limitation, the identity of and information relating to
customers or employees) the employee develops, learns or obtains during the term of the
employment contract that relate to us or our business or demonstrably anticipated business, or
that are developed in whole or in part during the employment or using our equipment, supplies,
facilities or confidential information, or that are received by or for us in confidence, constitute
proprietary information. The employee shall hold in confidence and not disclose or, except
within the scope of the employment, use any proprietary information.
• Confidentiality. During the employment, except as necessary to perform work duties, and for
all time thereafter, the employee shall not, without our prior written consent, disclose, divulge,
announce, publish, impart, transfer or otherwise make known to any third party, or in any way
use any information, such as technical and trade secrets, belonging to us or belonging to any
other party for which we have a duty of confidentiality.
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• Non-competition. We have the right to unilaterally initiate a non-competition period of up to
two years following the termination of employment. During the term of employment and the
non-competition period initiated by us, the employee shall not engage in any competitive
behavior.
• Non-solicitation. During the employment and for one year thereafter, the employee shall not,
directly or indirectly, solicit or attempt to solicit our employees to leave their employment or
solicit or otherwise influence our relationships with our customers or suppliers.
Our Research and Development Process
Our research and development process involves a framework in which factors such as customers
demand, feasibility analysis, technology developments, and use cases are taken into consideration. The
diagram below sets out the principal steps which we generally follow in our research and development
process.
N
N
N
N
N
N
N
N
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Demand planning Material procurement
for prototype
Prototype assembly
Prototype test
Prototype
testing review
If prototype
shall be re-built
Improvement process
Trail production
transfer review Improvement process
Trial production
Trial production
review
Mass production
Commercialization
Improvement
process
If the second round
of trial production
is needed
Feasibility analysis
Amend the project application
Project
application
Project
establishment
System requirements
defining
System and design
summary
Review of system
and design
summary
Detailed designing
Review of
detailed
designing
Termination of
the project application
If the project
application
shall be amended
Our research and development process mainly includes (1) conceptual stage, (2) planning stage, (3)
development and testing stage, and (4) verification and commercialization stage.
• Conceptual stage. Conceptual stage includes the preparatory stages from demand planning to
project establishment. In this stage, our product planning department conducts demand
research and data collection as well as market and technical feasibility analysis, and submits
relevant research and development project establishment application for management’s review.
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• Planning stage. Planning stage includes the stages from system requirements defining to
review of system and design summary. In this stage, our research and development department
breaks down the system requirements in detail based on the information submitted by the
product planning department in the conceptual stage, and completes summaries of design
document for each module, including structure, components, software and algorithm, among
others, to determine the technical benchmark for the entire product development.
• Development and testing stage. Development and testing stage includes the stages from
detailed designing to prototype testing review. In this stage, our research and development staff
carry out detailed designing based on summaries of design document for each module from the
planning stage. After a review for detailed designing process, we arrange proofing for sample
components, and use those components to assemble prototype. At the same time, the testing
department specifies the system testing specifications to test and verify the prototype.
• V erification and commercialization stage. Verification and commercialization stage includes
the stages from trial production review to commercialization. During the trial production
review, we determine whether to carry out small batch trial production of relevant products.
Based on the trial production results, we further determine whether to proceed with mass
production, which represents the commercialization of relevant products.
INTELLECTUAL PROPERTY RIGHTS
We believe that our intellectual property rights are critical to our continued success. We have taken
the following key measures to protect our intellectual property rights, including: (1) implementing a set
of comprehensive internal policies to establish robust management over our intellectual property rights,
(2) establishing an intellectual property taskforce to guide, manage, supervise and monitor our daily work
regarding intellectual properties, (3) timely registration, filing and application for ownership of our
intellectual properties, (4) actively tracking the registration and authorization status of intellectual
properties and taking action in timely manner if any potential conflicts with our intellectual property
rights are identified, and (5) clearly stating all rights and obligations regarding the ownership and
protection of intellectual properties in the employment agreements we enter into.
As of the Latest Practicable Date, we had 653 registered patents, including 217 invention patents,
303 utility model patents and 133 design patents, and filed over 180 patent applications which were
pending approval. According to the CIC Report, as of the same date, we had the largest number of
registered patents in the global cobot industry. In addition, many of our patents have garnered industry
awards and acclaim. For example, we received the 24th China Patent Excellence Award for our patented
collision detection method, the 2023 Guangdong Patent Silver Award for our patented dynamics motion
control method, and the 2021 Shenzhen Science and Technology Patent Award for our patented
high-precision desktop robot structural design technology. Our human-robot interaction technology
based on e-skin admittance control has been acclaimed by an expert group from the China Machinery
Industry Federation as internationally leading.
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Examples of patents held by us in connection with our core technologies which we consider to be material to our business include the following.
Patent name
Place of
registration Patent number
Core technology
involved Major function
An absolute position measurement method, device, storage
medium and machine
(eༀໄeπᎷʧሯʿዚኜ )....
China ZL201911383251.1
Motor and encoder
technology
Determine the absolute position of the output shaft and
improve the measurement accuracy of the absolute position
An external torque measurement method, device, controller and
mechanical arm
(eༀໄeછՓኜʿዚ૛ᑑ ) ........
China ZL201910594866.2 Record the rotation angle and input the recorded data into the
measurement model to accurately determine the external
torque of the cobot joint
Position positioning method for magnetic encoder, device,
electronic equipment and computer-readable storage medium
(eༀໄeཥɿண௪ʿ
ၑዚ̙ᛘπᎷʧሯ )............................
China ZL201911405465.4 Determine the position of the encoder and improve its
positioning accuracy
A motor running angle measurement method and system, and a
joint angle measurement system (ձ
಻ඎӻ୕ ) ........................
China ZL201911379738.2
Integrated drive and
control technology
Obtain the comparison data between the motor running angle
value and the encoder measurement value to accurately
obtain the motor angle
Adaptive modeling method for robot drive and control integrated
system
(ج...............)
China ZL201811605226.9 Integrated modeling of cobots’ drive and control systems to
achieve precise matching of relevant models
Robotic arm and its joint module
(ዚ૛ᑑʿՉᗫືᅼଡ଼ ) ...........................
China ZL202211229329.6
Integrated joint
technology
The drive components and deceleration components can be
tested separately before assembly, which is also beneficial
to subsequent maintenance
Cobot arm and its joint module
(՘Ъዚ૛ᑑʿՉᗫືᅼଡ଼ ) ........................
China ZL202211230239.9 Detect the angular position of the output shaft and record the
number of rotations of the output shaft
Robotic arm and its joint module
(ዚ૛ᑑʿՉᗫືᅼଡ଼ ) ...........................
China ZL202211226201.4 Increase the coaxiality between the rotating shaft and the
electrode output shaft, improving the detection accuracy of
the encoder
Joints, robotic arms, robots and their harmonic reducer devices
(ಯ஺ኜༀໄ ) ...........
China ZL202111160367.6 Make the harmonic reducer more compact
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Patent name
Place of
registration Patent number
Core technology
involved Major function
Braking devices for robotic arm joints, robotic arm joints and
robotic arms
(Փਗༀໄeዚ૛ᑑᗫືʿዚ૛ᑑ ).......
China ZL202180011958.9
Integrated joint
technology
Align the brake pad with the hub, secure the electromagnetic
brake to the joint housing with a fastener, and simplify
installation through reverse assembly
Robotic arm and its joint modules and coding components
(ዚ૛ᑑʿՉᗫືᅼଡ଼eᇜᇁଡ଼΁ ) ....................
China ZL202211226202.9 Connect the encoder and motor shafts with axial preload to
simplify and strengthen the connection
Robotic arm and joint module ........................ United States US11820012 B1 The drive components and deceleration components can be
tested separately before assembly, which is also beneficial
to subsequent maintenance
A graphical programming method, device and intelligent terminal
for robots
(eༀໄʿ౽ঐ୞၌ ) ..........
China ZL201811650764.X
Intelligent
human-robot
interaction
platform
Improve the response speed of graphical programming
A robot model display method, device and intelligent terminal
(eༀໄʿ౽ঐ୞၌ ) ..........
China ZL201811650765.4 Display the operating status of the robot and assist users in
controlling the robot
Communication method between terminal and equipment,
terminal, electronic equipment and storage medium
(e୞၌eཥɿண௪ʿ
πᎷʧሯ ) ....................................
China ZL202011459418.0 Delegate device operation data to a mobile terminal, speeding
up communication with the web, simplifying processing,
and enhancing control efficiency
Communication method, device and computer-readable storage
medium based on wireless local area network (ೌᇞ҅ਹၣ
ၑዚ̙ᛘπᎷʧሯ )..............
China ZL202011464366.6 Establish communication channels among multiple smart
devices in a WLAN for data transmission, reducing
short-distance communication costs
Robot safety control method and device based on multiple
perceptions (ʿༀໄ ) ...
China ZL202010590912.4 High-performance
real-time control
system
Enhance robot safety with 3D vision, electronic skin
proximity, and tactile technologies for graded control
strategies
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Patent name
Place of
registration Patent number
Core technology
involved Major function
Space trajectory transition method for industrial robots, system
and robots
(eӻ୕ʿዚኜɛ ) ........
China ZL201811627820.8
Complex continuous
trajectory control
technology
Determine the trajectory velocity in the transition region
A robot control method, system and robot
(eӻ୕ʿዚኜɛ ) ................
China ZL201811627830.1 Reduce wear and failure rates of cobots by real-time
detection and assessment of the cobot’s motion state, along
with speed planning and acceleration adjustment
A jerk-continuous speed planning method, device, controller and
robot (e
ༀໄeછՓኜʿዚኜɛ ) ..........................
China ZL201911380048.9 Determine parameters such as displacement, speed and
acceleration, improving the stability and efficiency of the
cobot
A movement trajectory planning method, device, equipment and
storage medium
(eༀໄeண௪ձπᎷʧሯ ) ........
China ZL201811648453.X Enhance the application range of moving parts by deriving
angle, angular velocity, and angular acceleration
correlation curves that match the spatial arc trajectory of
circular motion commands
Motion path planning method of robotic arm, device, equipment,
media and robotic arm (eༀໄeண
௪eʧሯʿዚ૛ᑑ ) .............................
China ZL202110582502.X Plan each path point on the generated motion path to achieve
specific operation requirements
Robotic arm and its movement path planning method, control
system, media and robot (e
છՓӻ୕eʧሯʿዚኜɛ ) ........................
China ZL202210039416.9 Optimize initial paths by updating waypoints to simplify
route planning
Robot dynamic parameter identification method, device, terminal
equipment and storage medium
(eༀໄe୞၌ண௪ʿπᎷʧሯ ). .
China ZL201811600643.4 Compliance and force
control technology
Avoid the accumulation of errors in the single joint
identification process and improve the identification
accuracy of dynamic parameters
Data verification method, security controller and data verification
system
(᜕ӻ୕ ) ...........
China ZL202110790486.3
Safety controller
technology
Monitor joint operation data separately with two control
boards to alert significant discrepancies, ensuring reliable
data validation
A secure communication method, device, robotic arm and storage
medium
(eༀໄeዚ૛ᑑʿ
πᎷʧሯ ) ...................................
China ZL202110791902.1 Enhance monitoring accuracy by detecting communication
anomalies between the main and safety controllers
BUSINESS
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--- page 225 ---
Patent name
Place of
registration Patent number
Core technology
involved Major function
Flexible device housings, robotic arms and robots
(ༀໄ̮ಠeዚ૛ᑑձዚኜɛ )..................
China ZL202110570306.0
SafeSkin
Reduce the risk of e-skin being damaged due to collision
Housings of mechanical equipment, housing components, robotic
arms and robots
(ಠ᜗eಠ᜗ଡ଼΁eዚ૛ᑑ˸ʿዚኜɛ ) ........
China ZL201980041854.5 Achieve non-contact distance sensing
Object area recognition method, device, equipment and
computer-readable storage medium
(ၑዚ̙ᛘπᎷʧሯ )....
China ZL201911383454.0 Determine the direct area between the e-skin component and
obstacles so that the cobot can accurately avoid obstacles
A robot display method, device and electronic equipment
(eༀໄʿཥɿண௪ )...............
China ZL201911379650.0 Adjust the display information of the electronic model
through changes in capacitance value
Housing components for mechanical equipment and robots
(ಠ᜗ଡ଼΁ձዚኜɛ ).....................
China ZL201980041853.0 Mount electrodes onto a fixed part constructed on the shell,
simplifying the assembly of electronic skin with the shell
Sensing circuit, logic circuit board, joint control board, main
controller board and robot
(ʿዚኜɛ ). .
China ZL201980041894.X Connect sensing circuit terminals to electrode of electronic
skin, enabling capacitive coupling with nearby conductors
for non-contact distance sensing
BUSINESS
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--- page 226 ---
Patent name
Place of
registration Patent number
Core technology
involved Major function
Robotic arm control method, device, equipment, system, storage
medium and robotic arm
(eༀໄeண௪eӻ୕eπᎷʧሯʿዚ૛ᑑ ). .
China ZL202110581850.5
Non-contact collision
prevention
technology
Use electronic skin to sense and convert surrounding
obstacles into repulsive forces, enhancing robotic arm
safety by preventing collisions
Robots and control methods, devices, equipment, storage media,
and robotic arms
(eༀໄeண௪eπᎷʧሯeዚ૛ᑑ )....
China ZL202211014994.3 Plan robot avoidance maneuvers using a virtual repulsive
field based on proximity information, balancing obstacle
avoidance with operational objectives
Robotic arm obstacle avoidance method, device, robotic arm and
robot (eༀໄeዚ૛ᑑʿዚኜɛ ) .........
China ZL202011463416.9 Pre-plan obstacle avoidance paths to keep robots running
without stopping, boosting operational efficiency
Robotic arm robot, obstacle avoidance method and storage medium
of robot (ʿπᎷʧሯ )...
China ZL202010627285.7 Decelerate or stop the robot abruptly in its current motion
direction when it approaches obstacles within a dynamic
urgency threshold to prevent collisions
Robot obstacle avoidance method, robotic arm robot and storage
medium (eዚ૛ᑑόዚኜɛʿπᎷʧሯ ) ....
China ZL202010627301.2 Determine the urgency threshold for the robot based on its
current speed, maximum allowable collision speed with
obstacles, and deceleration acceleration, aiming to prevent
collisions or reduce impact force with obstacles
A robot collision detection method, device, storage medium and
robot (eༀໄeπᎷʧሯʿዚኜɛ ). .
China ZL201811636935.3
Collision detection
technology
Calculate the external moment of the joint, and determine that
the cobot has collided when the external moment is greater
than the pre-set value
A servo control method, device and robot
(eༀໄʿዚኜɛ ) ...........
China ZL201811622861.8 Improve the dynamic tracking performance of the cobot
during acceleration and deceleration
Robot collision detection method, device, equipment and
computer-readable storage medium (eༀ
ၑዚ̙ᛘπᎷʧሯ )....................
China ZL201911383473.3 Obtain the detection parameters of the acceleration sensor set
at the end and further determine whether the cobot has
collided
Collaborative robotic arm and its motion control method, collision
detection method, and control system
(eછՓӻ୕ ) ...
China ZL202211220131.1 Use theoretical joint motion status and servo motor torque to
limit drive currents, reducing damage from collisions in
cobot arms
BUSINESS
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--- page 227 ---
Patent name
Place of
registration Patent number
Core technology
involved Major function
Robot trajectory reproduction method, control device, equipment and
readable storage medium
(eછՓༀໄeண௪ʿ
̙ᛘπᎷʧሯ).................................
China ZL201911380760.9
Motion capture and
imitation
technology
Capture multiple robot waypoints during teaching in
zero-force control mode activated by an operator, creating
a teaching trajectory file for path reproduction
Coffee latte art trajectory generation method, coffee making
method, related equipment and system
(e
ᗫண௪ʿӻ୕ )...............................
China ZL202211311541.7 Automate latte decoration by capturing cup tilt and latte
decoration container data, ensuring consistent high-quality
coffee without human influence
A coffee latte art teaching system
(ͪ઺ӻ୕ )..........................
China ZL202111443351.6 Use motion capture devices to detect markers on the teaching
cup, gather positional data, and determine its position and
orientation for calibration
Teleoperation manipulator and its spindle, teleoperation equipment
(Ⴧ዁Ъዚ૛˓ʿՉ˴ൿeჇ዁Ъண௪ ) ................
China ZL202111185802.0
Teleoperation
technology
Reduce the difficulty of disassembly and assembly of the
cobot
Teleoperation manipulator and its transmission structure,
teleoperation equipment
(Ⴧ዁Ъዚ૛˓ʿՉෂਗഐ࿴eჇ዁Ъண௪ ) .............
China ZL202111185803.5 Reduce the center of gravity of the entire manipulator and
improve its movement stability
Teleoperation manipulator and its turntable, teleoperation
equipment
(Ⴧ዁Ъዚ૛˓ʿՉᔷᓣeჇ዁Ъண௪ ) ................
China ZL202111185818.1 Reduce the center of gravity of the entire turntable and
improve its stability
Teleoperation manipulator and teleoperation equipment
(Ⴧ዁Ъዚ૛˓ʿჇ዁Ъண௪ ) ......................
China ZL202111185860.3 Improve the applicability of manipulators
Teleoperation system, teleoperation method and chip
(˪ ) ...................
China ZL202111176553.9 Motion control of slave operating devices and camera devices
via a single master operating device
BUSINESS
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--- page 228 ---
Patent name
Place of
registration Patent number
Core technology
involved Major function
A target position detection method
(ج.........................)
China ZL202010016602.1
Deep learning
technology
Use 3D local feature descriptors to find optimal point cloud
segments in scene data, improving 3D feature extraction
and target detection
Fruit stem positioning and fruit picking methods, devices, robots
and media
(eༀໄeዚኜɛʿʧሯ ) ........
China ZL202111179412.2 Calculate pixel coordinates of fruit stems in image frames
using a pre-trained regression network, incorporating depth
information for camera and robot coordinates
determination
Three-dimensional target detection method, detection device,
terminal equipment and computer-readable storage medium
(eᏨ಻ༀໄe୞၌ண௪ʿ
ၑዚ̙ᛘπᎷʧሯ )............................
China ZL201911383359.0 Map segmented point cloud data onto RGB images for precise
instance recognition, enhancing accuracy
Object recognition and positioning methods, devices and terminal
equipment
(eༀໄʿ୞၌ண௪ ) ................
China ZL201911380815.6 Use image recognition to identify the 2D target area and
geometric shape type of an object, then map it onto 3D
point cloud data for precise object localization
A method, apparatus, robotic arm, system, and medium for
collecting teaching trajectory points
(eༀໄeዚ૛ᑑeӻ୕ʿʧሯ )....
China ZL202111263269.5
Imitation learning
technology
Locate the position of the teaching tip on the calibration
board through two-dimensional images captured by the
camera, and collect the trajectory points of the teaching tip
under the world coordinate system
A method, apparatus, and computer-readable storage medium for
reproducing robot teaching trajectories
(ၑዚ̙ᛘπᎷʧሯ )....
China ZL202010590911.X Achieve the autonomous generation of similar trajectories
through the trajectory generalization algorithm
A semi-intelligent teaching and learning method, intelligent robot,
and storage medium
(e౽ঐዚኜɛձπᎷʧሯ ) ..........
China ZL201811467840.3 Reducing the computational complexity and human
involvement in the correction process, and improving the
intelligence level of motion learning
BUSINESS
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--- page 229 ---
As advised by our PRC Legal Advisor, pursuant to the Patent Law of the People’s Republic of China
(جan invention patent registered in China is valid for a term of 20 years from the
date of filing of the application for the patent, an utility model patent registered in China is valid for a
term of 10 years from the date of filing of the application for the patent, and since June 1, 2021, a design
patent registered in China is valid for a term of 15 years from the date of filing of the application for the
patent. Despite our precautions, however, third parties may obtain and use our intellectual property
without our consent. Unauthorized use of our intellectual property by third parties and the expenses
incurred in protecting our intellectual property rights from such unauthorized use may adversely affect
our business and results of operations. See “Risk Factors—Risks Relating to the Research and
Development and Intellectual Property Rights of Our Products.” Our Directors confirm that we did not
have any material disputes or any other pending material legal proceedings of intellectual property rights
with third parties during the Track Record Period and up to the Latest Practicable Date.
OUR SALES NETWORK
Over the years, we have built up a broad and geographically diversified customer base in China and
globally, spreading across over 80 countries and regions. We distribute our cobot products through direct
sales and distributors, who contribute to a broad customer coverage. The following table sets forth a
breakdown of our revenue by distribution channels for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Direct sales
Mainland China ....... 23,138 13.3 37,050 15.4 56,897 19.8 18,177 16.5 21,640 18.0
European markets ...... 5,446 3.1 13,011 5.4 14,483 5.1 8,849 8.0 6,600 5.5
Americas ............ 4,044 2.3 6,384 2.6 11,771 4.1 6,016 5.5 5,132 4.3
Asia-Pacific markets .... 12,705 7.3 23,627 9.8 33,881 11.8 11,609 10.6 18,822 15.5
Subtotal of direct sales . 45,333 26.0 80,072 33.2 117,032 40.8 44,651 40.6 52,194 43.3
Distributorship
Mainland China ....... 67,319 38.6 63,843 26.5 60,324 21.0 21,003 19.1 24,904 20.7
European markets ...... 35,152 20.2 52,953 22.0 53,830 18.8 23,036 21.0 21,712 18.0
Americas ............ 12,375 7.1 24,324 10.1 25,787 9.0 11,097 10.1 11,159 9.3
Asia-Pacific markets .... 14,135 8.1 19,821 8.2 29,776 10.4 10,125 9.2 10,493 8.7
Subtotal of
distributorship ..... 128,981 74.0 160,941 66.8 169,717 59.2 65,261 59.4 68,268 56.7
Total .............. 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
BUSINESS
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--- page 230 ---
Our sales force is essential to build our brand image by interacting, introducing and demonstrating
the features of our products directly to our customers. Our sales team is equipped with knowledge of our
cobot products and is primarily responsible for frequently communicating with our customers and
understanding their feedback on the quality, preferences, improvements and market demand of our
products. They play an important part in the planning, development and implementation of our planned
marketing strategies. To encourage and incentivize our sales force, we have implemented a compensation
structure that includes a fixed component as well as a performance-based component and also set
performance targets for our sales team. We generally evaluate the performance of our sales team members
on a quarterly basis and pay out performance-based compensation accordingly.
During the Track Record Period, we sold our products to customers located in the Relevant
Countries. See “—Relevant Activities in Respect of the Relevant Countries with International Sanctions
Exposure” for details of Relevant Activities relating to the Relevant Countries.
Direct Sales
In 2021, 2022, 2023 and the six months ended June 30, 2024, we served 289, 411, 434 and 304 direct
sale customers, respectively. Our direct sales customers mainly comprise (1) end users, including
corporate customers in manufacturing industries, primarily covering automotive manufacturing, 3C
manufacturing, mechanical manufacturing, and semiconductor fabrication, research laboratories and
educational institutions, and consumer goods companies, and (2) cobot integrators who integrate cobots,
additional components, software systems and other services with specialized design, engineering and
programming resources. In terms of revenue contribution in each year/period during the Track Record
Period, over 16% of our revenue from direct sales was from end users, and not less than 60% of the same
was from cobot integrators. Having made reasonable inquiries and to our best knowledge, in terms of
revenue contribution, around 40% of such end users were from education sectors and over 20% were from
manufacturing sectors, and over 35% of such cobot integrators were from manufacturing sectors.
We source new business opportunities mainly through direct marketing initiatives, by participating
in industry exhibitions or acting upon publicly available information published by potential customers,
among other measures. For certain direct sales customers such as domestic educational institutions,
public tender is required. Upon becoming aware of the tender, we make a preliminary assessment of the
potential tender. In considering whether to bid for the tender, we generally take into account the
following factors: (1) the profitability of the order including the cost of raw materials and labor and
potential revenue, (2) the feasibility of undertaking such project with reference to customers’ demand,
our capacity and expertise, our then available labor force and financial resources, and (3) the delivery
schedule.
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--- page 231 ---
The following table sets forth key metrics of our direct sale customers for the years/period
indicated.
Y ear ended December 31,
Six months
ended
June 30,
20242021 2022 2023
Number of direct sale customers ..... 2 8 9 4 1 1 4 3 4 3 0 4
Number of new direct sale customers . . 233 322 260 152
Number of transactions with direct
sale customers ................... 6 5 8 9 1 6 1,027 661
Average direct sale customer value
(1)
(RMB in thousands) .............. 1 5 7 1 9 5 2 7 0 1 7 2
Average transaction value of direct
sale customers (2) (RMB in
thousands) ...................... 6 9 8 7 1 1 4 7 9
Direct sale customer retention rate (3) . . 42.7% 30.8% 42.3% N/A
Net dollar retention rate of direct sale
customers (4) ..................... 72.5% 76.7% 81.6% N/A
(1) Calculated by dividing the revenue generated from direct sales in a given year/period by the number of direct sale
customers who purchased our products in the same year/period.
(2) Calculated by dividing the revenue generated from direct sales in a given year/period by the number of transactions by
our direct sales customers in the same year/period.
(3) Calculated by dividing the number of direct sale customers of both current and previous periods by the number of
direct sale customers of the previous period, multiplied by 100%.
(4) Calculated by dividing the revenue of a current period from direct sale customers of both current and previous periods
by the revenue of the previous period of such direct sale customers, multiplied by 100%.
Distributors
We believe that by engaging distributors, we are able to leverage their experience and knowledge of
the target local markets as well as their existing sales networks and resources, which can help us expand
our market reach over a wider geographical area and achieve deeper market penetration than if we were to
proceed with direct sales and marketing alone, without having to incur substantial sales and marketing
costs. In 2021, 2022, 2023 and the six months ended June 30, 2024, there were 344, 387, 358 and 224
distributors, respectively.
Our relationship with our distributors is a buyer and seller relationship, as our distributors acquire
ownership of the products we deliver to them. We generally allow returns and/or exchanges for limited
circumstances such as quality defects or damages during transportation. We recognize sales revenues
from distributors when the control over our products is transferred to them. We designate pre-determined
distribution areas for our distributors as defined in their respective distribution agreements to encourage
them to explore more potential customers within such pre-determined areas.
BUSINESS
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--- page 232 ---
According to the CIC Report, as the global cobot industry is at a nascent stage of development,
cobot distributors rarely develop sub-distributors to further distribute cobot products. Our distributors
generally do not need our specific authorization to engage sub-distributors. We do not require
sub-distributors to enter into direct agreements with us. Our distributors occasionally develop
sub-distributors to leverage their coverage of the underserved areas within the same city or the peripheral
regions. During the Track Record Period, there was no revenue directly generated from the
sub-distributors, as they purchased our products from our distributors and we did not have any sale,
payment or other direct transaction with the sub-distributors. To our best knowledge having made
reasonable enquiries, we had insignificant number of sub-distributors and only immaterial amount of
sales had been made through our distributors to sub-distributors during the Track Record Period.
Therefore, we did not and believe that it is not necessary to monitor the movement of our sub-distributors.
As part of our commitment to maintaining high standards, we select new distributors throughout the
year. We have implemented rigorous selection criteria for new distributors to ensure that they are well
equipped to represent our brand and promote our products. Our primary evaluation criteria, among
others, are their advertising and marketing activities, such as seminars, webinars, industry exhibitions
and social media marketing, and their actual annual purchase amounts.
We strive to provide our distributors with operational supports to boost their development. In
particular, we provide them with training from time to time, so that their employees are equipped with
knowledge of our cobot products. We also provide them with product procurement guidance based on
their respective circumstances as part of our efforts to control and monitor our distributors’ inventories.
We impose a sales target on our distributors, which is the result of negotiation between us and each
distributor. Such sales target is not mandatory in nature but rather one of the factors that we consider
when it comes to renewing the distributorship, similar to our selection criteria for new distributors.
Failure to meet the target does not constitute a ground for automatic termination of distributorship.
However, if a distributor repeatedly fails to hit its target, we reserve the right to terminate our cooperation
with such distributor.
BUSINESS
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--- page 233 ---
The following table sets forth key metrics of our distributors for the years/period indicated.
Y ear ended December 31,
Six months
ended
June 30,
20242021 2022 2023
Number of distributors at the
beginning of the year/period ....... 3 1 0 3 4 4 3 8 7 3 5 8
Number of new distributors ......... 1 9 4 2 2 3 1 5 8 6 6
Number of exiting distributors ....... (160) (180) (187) (200)
Number of distributors at the end of
the year/period .................. 3 4 4 3 8 7 3 5 8 2 2 4
Number of transactions with
distributors ...................... 1,317 1,411 1,582 721
Average distributor value (1)
(RMB in thousands) .............. 3 7 5 4 1 6 4 7 4 3 0 5
Average transaction value of
distributors (2)
(RMB in thousands) .............. 9 8 1 1 4 1 0 7 9 5
Distributor retention rate (3) .......... 48.4% 47.7% 51.7% N/A
Net dollar retention rate of
distributors (4) .................... 109.9% 72.5% (5) 75.8% N/A
(1) Calculated by dividing the revenue generated from distributorship in a given year/period by the number of distributors
who purchased our products in the same year/period.
(2) Calculated by dividing the revenue generated from distributorship in a given year/period by the number of transactions
by our distributors in the same year/period.
(3) Calculated by dividing the number of distributors of both current and previous periods by the number of distributors of
the previous period, multiplied by 100%.
(4) Calculated by dividing the revenue of a current period from distributors of both current and previous periods by the
revenue of the previous period of such distributors, multiplied by 100%.
(5) The net dollar retention rate of distributors decreased from 109.9% in 2021 to 72.5% in 2022, primarily because
certain major customers in 2021 did not place orders with us in 2022.
In 2021, 2022 and 2023, the number of our exiting distributors was 160, 180 and 187, respectively,
accounting for 46.5%, 46.5% and 52.2% of the number of our distributors at the end of respective years.
We experienced such changes in our distributor mix primarily because those distributors did not have any
transactions with us in respective years. Continuous replacement of distributors demonstrates our
ongoing efforts to optimize our distribution network. Nonetheless, among these exiting distributors in
2021, 2022 and 2023, 21, 15 and 10 of them subsequently had transactions with us and rejoined our
distribution network, respectively.
According to the CIC Report, the distribution model in the cobot industry differs significantly from
that of traditional industries, primarily due to the sector’s nascent stage of development. Unlike
conventional distributors, cobot distributors typically operate on a reactive basis, i.e., they typically
initiate orders upon receiving requests from end customers. Because cobots are characterized by their
durability and specialized applications rather than being mass-market consumer goods. Sales in the cobot
industry are typically project-based and/or order driven transactions.
BUSINESS
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--- page 234 ---
Major term of distribution agreements
We typically enter into standard distribution agreements with our distributors. However, depending
on the country where a specific distributor is located, the terms could be different due to local laws and
regulations. Major terms of our standard distribution agreements with our distributors include:
• Duration. The duration of distribution agreements is typically one year.
• Right to use our trademark. We authorize our distributors to use our trademarks within the
duration and scope of distribution agreements.
• Retail prices. We provide distributors with suggested retail prices of our products.
• Scope of distribution. Our distributors are generally only permitted to sell our products in a
predetermined geographic area.
• Sub-distribution. Our distributors generally do not need our specific authorization to engage
sub-distributors. We do not require sub-distributors to enter into direct agreements with us.
• Sales target. Subject to negotiation, we may impose an annual minimum sales target upon
certain distributors. Failure to meet such target gives us the right to terminate our relationship
with such distributor.
• Payment. Depending on distributors’ demand and their credit history with us, we may require
our distributors to make payment before the delivery of our products. For certain distributors
with stable business relationships with us, we may provide short-term payment period.
• Logistics. We deliver our products according to the time and method specified in the purchase
order, or as separately notified by our distributors.
• Limitations on return or exchange. We typically do not accept return or exchange of products
from our distributors. We generally allow product return or exchange within certain days after
delivery under limited circumstances such as quality defects or damages during transportation.
• Termination. We are entitled to terminate the distribution agreements if our distributors breach
the distribution agreements.
During the Track Record Period, we did not experience material breach of distribution agreements
that had a significant impact on our business. During the same period, we did not have any material
disputes with or any material return or exchange of products from our distributors that had a significant
impact on our business. In 2021, 2022, 2023 and the six months ended June 30, 2024, the amount of
returned products from our distributors was RMB0.7 million, RMB0.2 million, RMB0.8 million and nil,
respectively, accounting for 0.4%, 0.1%, 0.3% and nil of the total revenue generated from our distributors
in the same years/period, respectively.
BUSINESS
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--- page 235 ---
During the Track Record Period, we had one distributor whose shareholder, director and supervisor
were our former employees. In 2021, 2022, 2023 and the six months ended June 30, 2024, the revenue
generated from such distributor was RMB0.5 million, RMB0.2 million, RMB23.0 thousand and RMB6.6
thousand, respectively. Except for this, our Directors confirm that, to their best knowledge having made
reasonable enquiries, they are not aware of any other past or present relationships (including business,
employment, family, trust and financing) between our Group and our distributors, their respective
substantial shareholders, directors, supervisors or senior management, or any of their respective close
associates during the Track Record Period.
MARKETING
We seek to explore the use cases of our cobot products through maintaining and building
relationships with our existing or new customers. To achieve this, we adopt multi-faceted marketing
initiatives, including industry exhibitions, digital marketing, content marketing, search engine marketing
and advertising campaigns, among others. Part of our marketing strategies is to demonstrate the
capabilities of our products and share our experience and knowledge of our products with our customers,
so we engage with our community through a wide variety of content, with the goal of creating interactive
exchanges with our customers and promoting and sharing the information of our products. We also
upload videos that demonstrate the use cases of our cobot products for viewing on our official website. In
2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our selling and distribution expenses
were RMB63.6 million, RMB89.3 million, RMB127.4 million, RMB56.6 million and RMB62.5 million,
respectively, representing 36.5%, 37.0%, 44.4%, 51.5% and 51.9% of our revenue for the same
years/periods, respectively.
The following table sets forth the details of our marketing activities.
Types Details
Social media ............. Interacting with our customers through multiple types of social
media platforms, we aim to enhance our brand awareness among our
existing and potential customers. As of the Latest Practicable Date,
we had established our presence on LinkedIn, Facebook, YouTube,
WeChat Channels (ൖ᎖໮ ), Douyin and WeChat Official
Accounts (ʮ଺໮ ), among others. We illustrate the
advancement of our products on these platforms and collect user
feedback to further enhance our customer experience and
engagement.
Industry exhibitions ...... W eh a v e been actively participating in various industry exhibitions,
including China International Industrial Fair ( ʕ਷਷ყʈุ௹ᚎึ ),
China Educational Equipment Exhibition (ͪึ ),
the Hannover Messe (ʈุ௹ᚎึ ), Automate Show (਷ʈ
ᚎึ ), and Robot Technology Japan ( ˚͉ዚኜ
ึ ), among others. Participating in these exhibitions
provides us with the opportunity to showcase our products to
customers around the world and communicate with potential
customers.
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Types Details
Sponsorships ............ W e actively promote our cobot products and reinforce our position as
an established provider in the industry through our support of
relevant competition events. For example, we sponsored the DOBOT
Intelligent Manufacturing Challenge of World Robot Olympiad ( ˰
ዚኜɛɽᒄ DOBOT኷ᒄධ ) for over five years and
China’s second V ocational Skills Competition (ᔖุҦঐ
ɽᒄ) in 2023.
National events .......... W e h a v e participated in various national events which allows us to
benefit from word-of-mouth marketing and minimizes our sales and
marketing costs. For example, in 2021, we participated in the
recording of the First Lesson of School ( කኪୋɓሙ ) by the Ministry
of Education of China and China Central Television, showcasing the
advancement of our Magician Lite and CR Series products. In 2023,
we held seminars in connection with intelligent manufacturing by
cobots in major cities in China, and as a supporting unit, we
participated in the National University Robot+ Construction Forum
(ዚኜɛ +ணሞእ ).
CUSTOMERS
We are a China-based cobot company with overseas footprint. Over the years, we have forged
relationships with international companies across different industries. We value compatibility and the
impact brought by our partnerships to the world, amid the global phenomenon of automation in
manufacturing. To this end, we analyze customer dynamics and market trends in key sectors to seek more
opportunities across industries, which allows us to enlarge the use cases of our cobot products and
customer base.
Over the years, we have built up a broad and geographically diversified customer base in China and
globally, spreading across over 80 countries and regions. In 2021, 2022, 2023 and the six months ended
June 30, 2024, our revenue from the five largest customers in each year/period during the Track Record
Period in total was RMB49.6 million, RMB50.7 million, RMB36.7 million and RMB24.9 million,
respectively, accounting for 28.5%, 21.0%, 12.8% and 20.7% of our total revenue, respectively. In the
same years/period, our revenue from the single largest customer in each year/period during the Track
Record Period was RMB22.0 million, RMB21.1 million, RMB10.2 million and RMB9.4 million,
accounting for 12.6%, 8.8%, 3.5% and 7.8% of our total revenue, respectively.
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The following tables set forth the details of the five largest customers in each year/period during the
Track Record Period.
Customers Type of customer Background
For the year ended December 31, 2021
Customer A ................. Distributor A cloud service provider in China, providing a variety of cloud
services including cloud computing, cloud storage, big data
and artificial intelligence, among others
Customer B ................. Distributor An exam technology and education solution provider in Russia,
providing exam management systems and educational
technology services
Customer C ................. Distributor A technology company in Japan that provides technical
consulting, training and development services
Customer D ................. Distributor A German company providing high-performance robotic
systems and automation solutions
Customer E ................. Distributor An educational technology company in China that improves the
quality of education through technological innovation and
provides online education platforms and solutions
Customers Type of customer Background
For the year ended December 31, 2022
Customer B ................. Distributor An exam technology and education solution provider in Russia,
providing exam management systems and educational
technology services
Customer F ................. Direct sales
customer
An electronic manufacturing services company in China
specializing in the production of electronic components and
assembly services
Customer C ................. Distributor A technology company in Japan that provides technical
consulting, training and development services
Customer G ................. Distributor A Brazilian company focused on the manufacture and sale of
test and measurement equipment serving the industrial and
educational markets
Customer H ................. Distributor An information technology company in China that provides
software development, information systems integration, and
technology consulting services
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Customers Type of customer Background
For the year ended December 31, 2023
Customer B ................. Distributor An exam technology and education solution provider in Russia,
providing exam management systems and educational
technology services
Customer C ................. Distributor A technology company in Japan that provides technical
consulting, training and development services
Customer I ................. Direct sale
customer
A Japanese company focused on the research and development
of aviation and space technology
Customer J ................. Distributor An education solution provider in Japan, specializing in
organizing large-scale robot competitions and relevant
textbook compilation
Customer K ................. Direct sales
customer
A provincial public university in Xi’an, Shaanxi, China
Customers Type of customer Background
For the six months ended June 30, 2024
Customer B ................. Distributor An exam technology and education solution provider in Russia,
providing exam management systems and educational
technology services
Customer L ................. Direct sales
customer
An Indian company focusing on industrial automation solutions,
which provides customized automation systems, robotics, and
Industrial Internet of Things solutions
Customer C ................. Distributor A technology company in Japan that provides technical
consulting, training and development services
Customer M ................. Distributor An industrial cobot integrator in the United States
Customer N ................. Distributor A Chinese company that provides cybersecurity and information
technology solutions, covering multiple fields such as
enterprise-level cybersecurity management, data protection
and cybersecurity consulting services
In 2021, 2022, 2023 and the six months ended June 30, 2024, our revenue from the five largest direct
sales customers in each year/period during the Track Record Period in total was RMB15.0 million,
RMB20.9 million, RMB23.4 million and RMB12.1 million, respectively, accounting for 8.6%, 8.7%,
8.1% and 10.0% of our total revenue, respectively. In the same years/period, our revenue from the five
largest distributors in each year/period during the Track Record Period was RMB49.6 million, RMB46.5
million, RMB33.9 million and RMB22.0 million, respectively, accounting for 28.5%, 19.3%, 11.8% and
18.3% of our total revenue, respectively.
The single largest customer in 2022 and 2023 was Customer B, one of our distributors and an exam
technology and education solution provider in Russia. The decrease in revenue from such customer in
2022 to that of 2023 was primarily due to their higher level of procurement in 2022 to meet the increase
in their downstream demand driven by the local government spendings in relevant fields in 2022.
To the best of our knowledge, all of our five largest customers in each year/period during the Track
Record Period were independent third parties. As of the Latest Practicable Date, none of our Directors,
Supervisors, their associates or any of our Shareholders (who or which to the knowledge of the Directors
or Supervisors owned more than 5% of our issued share capital) had any interest in any of our five largest
customers in each year/period during the Track Record Period.
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SUPPLIERS
Our suppliers primarily consist of (1) providers of raw materials and components for the production
of our cobot products and accessories, and (2) manufacturing partners for the production of our cobot
products. We select leading suppliers in the relevant sectors in order to ensure the availability and quality
of such raw materials, components and services. Our procurement process is under periodic review for
higher efficiency and cost control purpose without jeopardizing the quality of deliverables.
Providers for Raw Materials and Components
The key raw materials and components for the production of our cobot products primarily include
chips, PCB, motor body, gear reducers and sensors. We require the suppliers to develop and manufacture
the components based on our specifications with quality standards satisfactory to us. Upon receiving the
components, we retain the right to reject or return based on the results of our inspection. We typically
obtain quotations from at least three suppliers, in order to ensure supply stability and optimal
procurement cost control, whereas we may source those components which we believe substitute
suppliers can be easily identified.
We normally enter into framework agreements with raw materials and components providers which
set out the general terms and conditions of cooperation. We make separate purchase orders pursuant to the
framework agreements and negotiate prices and volumes before each purchase order. We make the
payment as set forth in the purchase order, and the supplier is typically responsible for the delivery of the
products. Prior to entering into business relationships with such raw materials and components providers,
we evaluate a variety of factors, including their product quality, qualification, reputation, pricing and
overall services. We perform thorough due diligence on our suppliers, request samples before making
purchase orders and regularly monitor and review their performance.
Manufacturing Partners
During the Track Record Period, we also engaged manufacturing partners for the production of our
cobot products. See “—Production.” We typically select manufacturing partners based on prices, contract
performance, delivery ability and quality of services. We maintain good relationships with our
manufacturing partners through frequent and open communication on project-related matters,
particularly on the progress of work and project requirements. There was no material delay in delivery of
services by our manufacturing partners during the Track Record Period. In 2021, 2022, 2023 and the six
months ended June 30, 2023 and 2024, the outsourced production costs was RMB6.1 million, RMB2.1
million, RMB1.2 million, RMB0.4 million and RMB0.4 million, respectively, accounting for 7.1%,
1.5%, 0.7%, 0.5% and 0.6% of our total cost of sales in the same years/periods, respectively.
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Major Suppliers
The purchases from our top five suppliers in each year/period during the Track Record Period were
RMB52.8 million, RMB75.0 million, RMB60.1 million and RMB27.1 million, respectively, representing
61.2%, 52.5%, 37.1% and 40.1% of our total cost of sales in the same years/period, respectively. The
purchases from our largest supplier in each year/period during the Track Record Period were RMB28.6
million, RMB34.8 million, RMB22.2 million and RMB10.7 million, respectively, representing 33.2%,
24.4%, 13.7% and 15.8% of our total cost of sales in the same years/period, respectively. The following
tables set forth the details of our top five suppliers in each year/period during the Track Record Period.
Supplier
Purchase
amount
Percentage of
total cost of
sales
Y ear of
commencement
of business
relationship Credit period Payment method Principal business activities Type of supplier Location
(RMB in
thousands) (%)
For the year ended December 31, 2021
Supplier A . . 28,604 33.2 2018 30 days Bank transfer Sales of power
supplies, magnetic
components, special
transformers and
other products as
well as original
design manufacturer
services
Finished
product
processing
Shenzhen,
Guangdong
Province
Supplier B . . 11,097 12.9 2017 N/A Bank transfer Sales of mechanical
and electrical
equipment and
products
Reducers Shenzhen,
Guangdong
Province
Supplier C . . 5,385 6.2 2020 30 days Bank transfer Hardware product
manufacturing and
mold manufacturing
Machine
parts
Dongguan,
Guangdong
Province
Supplier D . . 4,221 4.9 2017 60 days Bank transfer Sales of motors, motor
accessories and
motor drivers
Motors Changzhou,
Jiangsu
Province
Supplier E . . 3,484 4.0 2018 30 days Bank transfer Motor manufacturing,
motor and control
system research and
development, and
industrial robot
manufacturing
Motors Hangzhou,
Zhejiang
Province
Total ...... 52,791 61.2
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Supplier
Purchase
amount
Percentage of
total cost
of sales
Y ear of
commencement
of business
relationship Credit period Payment method Principal business activities Type of supplier Location
(RMB in
thousands) (%)
For the year ended December 31, 2022
Supplier F . . 34,845 24.4 2021 30 days Bank transfer Sales of precision
harmonic reducers
Reducers Suzhou, Jiangsu
Province
Supplier C . . 13,313 9.3 2020 30 days Bank transfer Hardware product
manufacturing and
mold manufacturing
Machine
parts
Dongguan,
Guangdong
Province
Supplier E . . 10,377 7.3 2018 30 days Bank transfer Sales of servo motors Motors Hangzhou,
Zhejiang
Province
Supplier D . . 9,367 6.6 2017 60 days Bank transfer Sales of motors, motor
accessories and
motor drivers
Motors Changzhou,
Jiangsu
Province
Supplier B . . 7,059 4.9 2017 N/A Bank transfer Sales of mechanical
and electrical
equipment and
products
Reducers Shenzhen,
Guangdong
Province
Total ...... 74,961 52.5
Supplier
Purchase
amount
Percentage of
total cost of
sales
Y ear of
commencement
of business
relationship Credit period Payment method Principal business activities Type of supplier Location
(RMB in
thousands) (%)
For the year ended December 31, 2023
Supplier F . . 22,170 13.7 2021 30 days Bank transfer Sales of precision
harmonic reducers
Reducers Suzhou, Jiangsu
Province
Supplier C . . 14,962 9.2 2020 30 days Bank transfer Hardware product
manufacturing and
mold manufacturing
Machine
parts
Dongguan,
Guangdong
Province
Supplier G . . 10,159 6.3 2023 N/A Bank transfer Sales of industrial
automation
equipment,
mechatronics
equipment and
electrical equipment
V ocational
training
platforms
Tianjin
Supplier H . . 6,562 4.1 2019 30 days Bank transfer Sales of precision
hardware and
tooling fixtures
Machine
parts
Shenzhen,
Guangdong
Province
Supplier D . . 6,292 3.9 2017 60 days Bank transfer Sales of motors, motor
accessories and
motor drivers
Motors Changzhou,
Jiangsu
Province
Total ...... 60,145 37.1
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Supplier
Purchase
amount
Percentage of
total cost of
sales
Y ear of
commencement
of business
relationship Credit period Payment method Principal business activities Type of supplier Location
(RMB in
thousands) (%)
For the six months ended June 30, 2024
Supplier F . . . 10,683 15.8 2021 30 days Bank transfer Sales of precision
harmonic reducers
Reducers Suzhou, Jiangsu
Province
Supplier C . . . 6,698 9.9 2020 30 days Bank transfer Hardware product
manufacturing and
mold manufacturing
Machine
parts
Dongguan,
Guangdong
Province
Supplier H. . . 4,381 6.5 2019 30 days Bank transfer Sales of precision
hardware and
tooling fixtures
Machine
parts
Shenzhen,
Guangdong
Province
Supplier I . . . 2,781 4.1 2017 60 days Bank transfer Sales of motors, motor
accessories and
motor drivers
Motors Changzhou,
Jiangsu
Province
Supplier J . . . 2,597 3.8 2022 30 days Bank transfer Sales of harmonic
reducers, electric
actuators and robot
joint modules
Reducers Shenzhen,
Guangdong
Province
Total ...... 27,140 40.1
Our Directors confirm that we had not experienced any significant material fluctuation in prices set
by our suppliers, material breach of contract on the part of our suppliers or delay in delivery of our orders
from our suppliers during the Track Record Period. As of the Latest Practicable Date, none of our
Directors, Supervisors, their associates or any of our Shareholders (who or which to the knowledge of the
Directors or Supervisors owned more than 5% of our issued share capital) had any interest in any of our
top five suppliers in each year/period during the Track Record Period.
We place purchase orders with our suppliers on case-by-case basis. Set forth below is a summary of
our standard terms of purchase order for raw materials and components.
• Payment . The purchase orders set out specific payment terms depending on the type of
materials and/or components to be procured.
• Delivery . The supplier is generally responsible for delivering the raw materials and/or
components to our designated locations.
• Quality assurance . We require the raw materials and/or components to satisfy our quality
standard. The supplier is responsible for returns and/or exchanges in the event of any defects.
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OVERLAPPING OF MAJOR CUSTOMERS AND SUPPLIERS
In 2021, one of our top five customers was also our supplier for textbooks and curriculum for
STEAM education sold together with our Magician Series cobots. Negotiations of the terms of our sales
to and purchases from this overlapping customer/supplier were conducted on an individual basis and the
sales and purchases were neither inter-connected nor inter-conditional with each other. All of our sales to
and purchases from this overlapping customer/supplier were conducted in the ordinary course of business
under normal commercial terms and in arm’s length transactions. In 2021, the revenue from this
overlapping customer/supplier was RMB4.8 million, accounting for approximately 2.8% of our total
revenue in the same year; the gross profit generated from this overlapping customer/supplier was
RMB3.6 million, accounting for approximately 4.1% of our total gross profit in the same year; the gross
profit margin of our sales to this overlapping customer/supplier was 74.1% in the same year. In 2021, the
purchase amount from this overlapping customer/supplier was RMB0.2 million, accounting for
approximately 0.2% of our total cost of sales in the same year.
In 2023, two of our top five suppliers for reducers or auxiliary equipment were also our customers
for cobot products for their production lines. Negotiations of the terms of our sales to and purchases from
these overlapping customers and suppliers were conducted on an individual basis and the sales and
purchases were neither inter-connected nor inter-conditional with each other. In 2023, the purchase
amount attributable to these overlapping customers/suppliers was RMB32.3 million, accounting for
approximately 20.0% of our total cost of sales in the same year. In 2023, the revenue from these
overlapping customers/suppliers was RMB1.4 million, accounting for approximately 0.5% of our total
revenue in the same year; the gross profit generated from these overlapping customers/suppliers was
RMB0.6 million, accounting for approximately 0.5% of our total gross profit in the same year; the gross
profit margin of our sales to these overlapping customers/suppliers was 46.3% in the same year.
PRODUCTION
During the Track Record Period, we manufactured and produced our cobot products through (1) our
two production facilities in Rizhao and Qingdao, Shandong Province and (2) our manufacturing partners.
Prior to the establishment of our first production facility in Rizhao, Shandong Province in 2022, we had
engaged manufacturing partners for the production of all of our cobot products. Since 2022, we had
gradually transferred from contract manufacturing to self-production. In 2023, we established our second
production facility in Qingdao, Shandong Province. As of the Latest Practicable Date, we continued to
outsource printed circuit board assembly and the production of our MG400 products to our manufacturing
partners, while the remainder of the production process were primarily completed by our own production
facilities.
We formulate production schedules and plans according to the market demand, taking into
consideration the level of our stock and utilization rates of our production facilities. We have
implemented a set of internal production and operation policies to promote our compliance with
applicable national and international industry standards. We carry out regular inspections to assess the
conditions of our production facilities and conduct necessary repairs and maintenance. We have also
introduced and implemented a stringent reporting system as to all the accidents and malfunction of the
equipment and keep all the relevant records.
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Our Production Processes
The following diagram illustrates the principal steps of the production process generally applicable
to our cobot products. The production time in the following diagram represents our estimation of time
required for each production step.
Procurement for
raw materials
and components
Preparation for
raw materials
and components
Assembly
stage
Power-on
test Aging test Final quality
inspection
Appearance
inspection and
cleaning
Sampling
inspection
and delivery
Packaging and
warehousing
Appearance
inspection and
cleaning
1 hour 22 ho urs 10 min utes 72 ho urs
40 minutes 5 min utes
1 hour30 minutes
30 minutes
• Assembly stage. We generally start the production process of our cobot products by first
assembling the essential cobot components to form the core body of the product. Depending on
the type of product being produced and the functionalities required, the core body is further
imported with various parameters.
• Testing stage. After we assemble all of the required components for our cobot product, an
overall completeness check is performed to ensure that all components have been properly
assembled, and necessary software checks are also carried out at this stage. An overall
functionality test is then conducted to test whether the product could perform all of its intended
functions properly. The next step is posture correction, where we perform more specific tests
and carry out necessary adjustments to ensure the accuracy of the physical postures and
movements of the product.
• Packaging stage. The finished cobot products are packaged and transported to the warehouses
for final delivery.
Our Production Facilities
As of the Latest Practicable Date, we had two production facilities in Rizhao and Qingdao,
Shandong Province. The following table sets forth the details of our two production facilities.
Location
Approximate
gross floor area Main functions
(square meters)
Rizhao, Shandong ...... 34,104.6 Standard production for all models except for
MG400 products
Qingdao, Shandong ..... 21,664.0 Production for integrated cobot products
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The following tables sets forth the details of the production capacities and utilization rates of our
production facilities during the Track Record Period.
Production base Production line
Production capacity of
finished products (1)
Production volume of
finished products Utilization rate (2)
2021 2022 2023
First half
of 2024 2021 2022 2023
First half
of 2024 2021 2022 2023
First half
of 2024
(units) (units) (%)
Rizhao, Shandong .....F o u r -axis cobots — 23,951 24,936 10,422 — 7,871 9,438 4,583 — 32.9 37.8 44.0
Six-axis cobots — 4,472 4,832 2,384 — 2,619 2,963 1,688 — 58.6 61.3 70.8
Qingdao, Shandong ..... Integrated cobots — — 1,190 1,094 — — 406 479 — — 34.1 43.8
(1) Production capacity is calculated based on the actual operating days of each production line in each year/period during
the Track Record Period, operating at eight hours per day.
(2) Utilization rate is calculated by dividing the production volume of a given year/period by the production capacity of
the same year/period.
LOGISTICS AND INVENTORY MANAGEMENT
We leverage on our own warehouse for storing work-in-progress, finished products and certain
components and raw materials, and we engage third-party logistics service providers for delivery
services. Finished products that have passed quality inspections are delivered by the logistics service
providers from our manufacturing partners or our own production facilities directly to our customers or to
our designated warehouses and ultimately to locations specified by our customers.
Our inventories include raw materials, work-in-process, finished goods and goods in transit. As of
December 31, 2021, 2022 and 2023 and June 30, 2024, our inventories were RMB70.9 million,
RMB131.8 million, RMB141.5 million and RMB155.3 million, respectively. See “Financial
Information—Discussion of Certain Balance Sheet Items—Inventories.” We have a strict inventory
control policy to monitor our inventory levels in order to minimize obsolete inventory. Through close
coordination with our customers and our manufacturing partners, we are able to carry less raw materials
and in-process inventories and lower our inventory risk.
In order to prevent future occurrences of significant write-down of inventories, we have
implemented the following inventory management measures:
• conduct more detailed sales forecasts taking into consideration of factors such as sales
strategy, historical sales data, industry changes, inventory levels of finished goods, and supply
chain risks;
• conduct regular checks and reviews on the performance of distributors and provide supports to
underperformed distributors;
• strengthen the reviewing process of the key terms in relation to our agreements with customers
and distributors to mitigate inventory risks which may arise from such agreements; and
• communicate more frequently with customers and distributors to obtain a better understanding
of market demand.
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QUALITY CONTROL
We are committed to maintaining high level of quality and safety for our products. We have designed
and implemented stringent monitoring and quality control systems to manage our manufacturing
activities. Our quality control system compasses all aspects of our operations, including product design
and development, sourcing and procuring of raw material, parts and components, production, packaging,
inventory storage, delivery and after-sales services. Our products comply with the safety standards and
quality requirements of various countries and regions. We have also adopted the appropriate quality
control system and engaged independent product testing and certification organizations to test and certify
our products on the relevant standards of each target market. As a result of our adherence to quality
control procedures, we did not experience any material sales returns or any material product liability or
major legal claims due to product safety and quality control issues, and we did not recall any products
during the Track Record Period and up to the Latest Practicable Date. We typically provide 12 to 36
months warranties as stated in our contracts with our customers. Our warranty term is usually limited to
defects or failure of products or services that do not meet the quality standards as specified and agreed
with our customers. In case of product failure within the warranty period, we will arrange for repair or
replacement of products and/or services without extra charge. After the warranty period expires, we may
provide maintenance and repair services at a reasonable cost.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, our provision for product warranties
was RMB3.5 million, RMB6.6 million, RMB6.1 million and RMB5.0 million, respectively. Our product
quality engineers work with our engineering team to ensure that the product designs meet functional
specifications and durability requirements of the relevant industry standards and our customer
requirements. At the procurement stage, we select reliable suppliers and enter into quality control
agreements with them, allowing us to seek remedies, such as damages and rectification if supplies fall
below our quality standards. We conduct thorough test and examination of product samples to make sure
they satisfy all the technical requirements set forth in our design. Our main component suppliers provide
manufacturer warranties for a period ranging from one to two years. Our quality control team continually
monitors the quality of incoming components and materials, finished products, and the assembling
processes at our production facilities.
Before entering into business partnerships with our manufacturing partners, we review their
licenses, certifications and other credentials and examine their technological expertise. We also conduct
site visits to our manufacturing partners from time to time to examine their product quality and
manufacturing capacity.
EMPLOYEES
As of the Latest Practicable Date, we had 550 employees. Most of our employees are based in China,
primarily located at our headquarters in Shenzhen. The following table sets forth a breakdown of our
employees by function as of the Latest Practicable Date.
Number of
employees
Research and development ............................................. 1 4 0
Sales and marketing ................................................... 1 9 5
Production and procurement ............................................ 1 5 1
General administration and management ................................. 6 4
Total ................................................................ 550
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Our success deeply rests with our ability to attract, retain and motivate qualified talents, with the
belief that our high-quality talent pool is one of our core strengths and competitive advantages. We recruit
talents, with high standards and rigorous procedures and through various methods, including campus
recruitment, online recruitment, internal referrals, and third-party recruiters, to select the best-fit
personnel for the corresponding positions in response to our various talent demands. We invest in
continuing training programs, including regular and tailor-made internal and external training, for our
employees to improve their professional knowledge and management skills, upgrade their skill sets, and
keep abreast of the industry standards in their respective positions. Pre-employment induction training
and orientation is provided to all new hiring. We also organize activities to provide our employees with a
deeper understanding of our culture. We offer competitive remuneration package to our employees,
which are generally based on their qualifications, industry experience, position and performance. We
regularly evaluate the performance of our employees and reward well-performing employees with bonus
and promotion.
We are required by PRC social insurance and housing provident fund laws and regulations to make
contributions for mandatory social insurance and housing provident funds for our employees. During the
Track Record Period, we did not make adequate contributions to the social insurance and housing
provident funds with respect to certain of our employees as required by the relevant PRC laws and
regulations. Furthermore, during the Track Record Period, instead of making the contributions to the
social insurance and housing provident funds on our own for certain employees, we engaged third-party
agencies to make such contributions, which was not in strict compliance with applicable PRC laws and
regulations. See “Risk Factors—Risks Relating to Our General Operations and Industry—We may be
required to make additional contributions of social insurance fund and/or housing provident fund and late
payments and fines under PRC laws and regulations.”
We did not make full contributions to the social insurance and housing provident fund for the
relevant employees primarily because (1) the applicable PRC laws and regulations governing social
insurance and housing provident funds are intricate and vary by region, which added complexity to our
compliance efforts, and (2) many of our employees were not willing to bear the costs associated with
social insurance and housing provident funds. Our Directors believe that the incident described above
would not have a material adverse effect on our business and results of operations, considering that (1) we
have obtained written confirmations issued by certain relevant local social insurance and housing
provident funds authorities that no administrative penalty was imposed on us during the Track Record
Period; (2) as of the Latest Practicable Date, we had not received any notification from the relevant PRC
regulatory authorities requiring us to pay material shortfalls with respect to social insurance and housing
provident funds; (3) we were not aware of any employee complaints nor were involved in any labor
disputes with our employees with respect to social insurance and housing provident funds; and (4) we
undertake to make full contributions or to pay the shortfall within a prescribed time period if and when
requested by the competent government authorities. In addition, pursuant to the Urgent Notice on
Enforcing the Requirement of the General Meeting of the State Council and Stabilizing the Levy of
Social Insurance Payment (ஷ
ٝpromulgated on September 21, 2018 by the Ministry of Human Resources and Social Security,
administrative enforcement authorities are prohibited from organizing and conducting centralized
collection of enterprises’ historical social insurance arrears. Furthermore, as advised by our PRC Legal
Advisor, the risk is remote that relevant local social insurance and housing provident funds authorities
will impose administrative penalty on us, and such that the incident described above would not have a
material adverse effect on our business and results of operations. Based on the foregoing, we did not
make provision for the shortfall in social insurance and housing provident fund contribution.
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To monitor our compliance with relevant laws and regulations in respect of social insurance and
housing provident fund contributions, we have taken the following internal control measures:
• we have designated our human resources department to review and monitor the reporting and
contributions of social insurance and housing provident funds on a monthly basis;
• we are in the process of communicating and will continue to communicate with our employees
with a view to seeking their understanding and cooperation in complying with the applicable
payment base for the social insurance and housing provident funds, which also requires
additional contributions from our employees. We also undertake to gradually increase the
applicable payment base for the social insurance and housing provident funds for our
employees within the next available time period in each year as indicated by the competent
government authorities; and
• we will consult our PRC legal advisors on a regular basis for advice on relevant PRC laws and
regulations to keep us abreast of relevant PRC laws and regulatory developments, including but
not limited to PRC laws and regulations in relation to social insurance and housing provident
funds, and will provide relevant employees with legal compliance trainings relating to the
same.
We have maintained a good relationship and expect to maintain an amicable relationship in the
future with our employees. During the Track Record Period and up to the Latest Practicable Date, there
were no material strikes which had an adverse impact on our operations and no material disputes between
the Group and our employees.
INSURANCE
We believe we have adequate insurance coverage in connection with our business operations by
putting in place all the mandatory insurance policies required by PRC laws and regulations, such as
product liability insurance. As required by PRC laws and regulations, our employee-related insurance
includes pension insurance, maternity insurance, unemployment insurance, work-related injury
insurance and medical insurance. During the Track Record Period, we did not make any material
insurance claim in relation to our business.
PROPERTIES
As of the Latest Practicable Date, all of our production facilities were located in China.
According to section 6(2) of the Companies Ordinance (Exemption of Companies and Prospectuses
from Compliance with Provisions) Notice, this prospectus is exempted from compliance with the
requirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, which require a valuation report with respect to all the Group’s
interests in land or buildings, for the reason that, as of June 30, 2024, we had no single property with a
carrying amount of 15% or more of our total assets.
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Owned Properties
As of the Latest Practicable Date, we owned five properties with an aggregate gross floor area of
approximately 55,768.7 square meters in China. We have obtained title certificates for such five
properties.
Leased Properties
As of the Latest Practicable Date, we leased 17 properties from third parties relating to our business
operations in total with an aggregate gross floor area of approximately 30,937.0 square meters in China,
which had been used mainly as production base, office and staff dormitory. As of the same date, there
were defects in some of our leased properties in China. See “Risk Factors—Risks Relating to Our General
Operations and Industry—We lease properties in various place as premises primarily for our office
spaces. Any non-renewal of leases, substantial increase in rent, or any third-party or government
challenge to our leasehold interest may affect our business and financial performance.”
As of the Latest Practicable Date, we also leased four properties in the United States, Germany and
Japan, which had been used mainly as office and warehouse. In particular, as of the same date, we leased
one property with an aggregate gross floor area of approximately 262.1 square meters in the United
States, one property with an aggregate gross floor area of approximately 667.2 square meters in Germany,
and two properties with an aggregate gross floor area of approximately 267.0 square meters in Japan. In
addition, we have entered into an agreement with a third party storage service provider in Germany which
offers a shared warehouse that provides us with storage space on demand.
LICENSES, APPROV ALS AND PERMITS
We are required to maintain various licenses, permits and approvals in order to operate our business.
We continually monitor our compliance with the requirements related to licenses, permits and approvals
in order to ensure that we have all such licenses, permits and approvals which are necessary to operate our
business. As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest
Practicable Date, we had obtained all requisite licenses, approvals and permits from relevant authorities
in China that are material to the operation of our existing business.
The following table sets out a list of material licenses, permits and approval held by us as of the
Latest Practicable Date.
License/permit
Entity holding the
license/permit Grant date
Expiration
date
Registration Certificate of
Customs Declaration Entity
(ʕ਷ऎᗫజᗫఊЗൗ̅
ࣣ.................)
Our Company December 2015 N/A
Shenzhen Qimo
Technology Co., Ltd.
(Ҧ
ʮ̡ )
November 2018 N/A
High-tech Enterprise Certificate
(ࣣ........)
Our Company December 2023 December
2026
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A W ARDS AND RECOGNITIONS
During the Track Record Period and up to the Latest Practicable Date, we received a number of
awards and recognitions in connection with our business. Some of the significant awards and recognitions
we have received are set forth below.
Awards and Recognition Awarding Parties Y ear of Award
National Specialty and New Little Giant
Enterprise (ॴਖ਼ၚतอʃ̶ɛΆุ ) ...
Ministry of Industry and
Information Technology of
China
2021
National Intellectual Property Advantage
Enterprise (ᗆପᛆᎴැΆุ ) .......
China National Intellectual
Property Administration
2022
China Patent Excellence Award
(ʕ਷ਖ਼лᎴӸᆤ ) .......................
China National Intellectual
Property Administration
2023
High-tech Enterprise
(৷อҦஔΆุ ) .........................
Shenzhen Science and
Technology Innovation
Committee (Ҧ௴
ึ), Shenzhen
Municipal Finance Bureau
(ଉέ̹ৌਕ҅ ) and State
Administration of Taxation
Shenzhen Municipal
Taxation Bureau (೼ਕ
ᐼ҅ଉέ̹೼ਕ҅ )
2017, 2020 and
2023
Engineering Research Center Pilot Base of
Ministry of Education for Intelligent
Unmanned Systems
(Ӻʕː
ʕ༊ਿή ) ..............................
Ministry of Education of
China
2019
Industrial Robot Technology and Skills Talents
Training Base
(ʈุዚኜɛҦஔҦঐɛʑ੃ቮ੃৅ਿή ). .
Education and Examination
Center of the Ministry of
Industry and Information
Technology of China
2019
Guangdong Robot Intelligent Interaction and
Control Engineering Technology Research
Center (ዚኜɛ౽ঐʹʝၾછՓʈ೻
Ӻʕː ) ..........................
Guangdong Provincial
Department of Science
and Technology
2020
Guangdong Industrial Design Center
(ʕː ) ...................
Guangdong Provincial
Department of Industry
and Information
Technology
2019
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Awards and Recognition Awarding Parties Y ear of Award
Guangdong Province Patent Excellence Award
(ਖ਼лᆤᎴӸᆤ ) .....................
Guangdong Patent Award
Review Committee Office
(ึ፬
܃)
2022
Guangdong Province Patent Silver Award
(ਖ਼лᆤვᆤ ) .......................
Guangdong Patent Award
Review Committee Office
(ึ፬
܃)
2023
Shenzhen Cobot Safety and Intelligent Control
Engineering Research Center
(ଉέ̹՘ЪዚኜɛτΌၾ౽ᅆછՓʈ೻
Ӻʕː ) ..............................
Shenzhen Municipal
Development and Reform
Commission
2022
Shenzhen Patent Award
(ଉέ̹ਖ਼лᆤ ) .........................
The People’s Government of
Shenzhen City
2021
Shenzhen Intellectual Property Advantage
Enterprise (ᗆପᛆᎴැఊЗ ) .....
Shenzhen Intellectual
Property Administration
2022
German Red Dot Design Award ............. T h e Design Center North
Rhine-Westphalia
2018
iF Design Award .......................... i F International Forum
Design GmbH
2018
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We may from time to time become a party to various legal, arbitration or administrative proceedings
arising in the ordinary course of our business. As of the Latest Practicable Date, there were no litigation,
arbitration or administrative proceedings pending or threatened against our Company or any of the
Directors which could have a material and adverse effect on our financial condition or results of
operations. During the Track Record Period and up to the Latest Practicable Date, there were no
litigation, arbitration or administrative proceedings against our Company or any of the Directors which
had caused a material and adverse effect on our business, results of operations or financial condition.
Compliance
We are subject to various regulatory requirements and guidelines issued by regulatory authorities in
China. During the Track Record Period and as of the Latest Practicable Date, we did not commit any
material non-compliance of the laws and regulations, and we did not experience any material
non-compliance incident, which taken as a whole, in the opinion of our Directors, is likely to have a
material and adverse effect on our business, results of operations or financial condition. As advised by
our PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we had
complied with the relevant laws and regulations in all material respects in China.
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RISK MANAGEMENT AND INTERNAL CONTROL
Our Board is responsible for the overall effectiveness of our risk management and establishing our
internal control system and reviewing its effectiveness. We have established and we maintain risk
management and internal control systems consisting of policies and procedures that are appropriate for
our business operations, and we are dedicated to continuously improving and implementing these systems
to ensure our policies and implementation are effective and sufficient.
In preparation for the Listing, we have engaged an independent third-party consultant (the “Internal
Control Consultant”) to perform a review over selected areas of our internal controls over financial
reporting in May 2024 (the “Internal Control Review”). The scope of the Internal Control Review
performed by the Internal Control Consultant was agreed between us and the Internal Control Consultant.
The selected areas of our internal controls over financial reporting that were reviewed by the Internal
Control Consultant included entity-level controls and business process level controls, including (1) sales,
accounts receivable and collection, (2) procurement, accounts payable and payment, (3) inventory
management, (4) production and costing, (5) research and development, (6) human resource and payroll,
(7) fixed assets and construction management, (8) cash and treasury management, (9) insurance, (10)
financial reporting and disclosure controls, (11) taxes, (12) intangible assets and intellectual properties,
(13) IT general controls, and (14) contract management.
The Internal Control Consultant performed the follow-up reviews in June 2024 to review the status
of the management actions taken by us to address the findings of the Internal Control Review (the
“Follow-up Review”). The Internal Control Consultant did not have any further recommendation in the
Follow-up Review. The Internal Control Review and the Follow-up Review were conducted based on
information provided by our Group and no assurance or opinion on internal controls was expressed by the
Internal Control Consultant.
Having considered the report prepared by our Internal Control Consultant, the Directors confirmed
that all of the major recommendations provided by the Internal Control Consultant have been followed
and corrective actions were taken accordingly to address our internal control deficiencies and
weaknesses. Our Directors are of the view that our enhanced internal control measures are adequate and
effective to ensure compliance with relevant laws and regulations going forward.
DATA SECURITY AND PRIV ACY
During the use of our cobot products (including those empowered by our AI technologies), we do
not collect any personal data and information of users. During our provision of cobot products, with the
prior consent of our customers and distributors, we collect and maintain their delivery and contact
information to the extent necessary and in accordance with the relevant laws and regulations on data
privacy and security in China. We have taken measures to maintain the confidentiality of such
information to ensure regulatory compliance. Specifically, we perform de-identification on raw data
stored, during which we redact personal identifiable data, such as name and phone number of a specific
customer or distributor. Since the collection, storage, usage, retention and transmission of information
that can be identified as specific individuals or reflect the relevant activities of specific individuals are all
subject to relevant data protection laws and regulations, the de-identification of raw data is necessary for
us to efficiently protect personal data of our customers and distributors. We also set up an access control
system for personal information in our internal system so that it cannot be viewed without proper
authorization or exported in bulk. We set up firewalls to prevent information loss or leakage caused by
cyber-attacks. In addition, we from time to time examine the security of our data storage system. We
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strictly restrict the range of data that our employees are authorized to access based on their title and
function. We have entered into confidentiality agreements with our employees to prevent improper use or
disclosure of information.
In addition, we continue to pay close attention to the legislative and regulatory developments in
cybersecurity and data protection and conduct routine cybersecurity and data protection compliance
check and rectification to keep pace with regulatory development. In particular, we have established a
comprehensive set of internal cybersecurity and data protection rules and policies. We have also
formulated the overarching data security management policy, user personal information protection
management policy and network security management policy, which provide the principal management
rules on cybersecurity and data protection.
During the Track Record Period and up to the Latest Practicable Date, we did not experience any
material data leakage or data loss, nor did we experience any material unauthorized use of customers’ or
distributors’ personal information.
Regulation on Cybersecurity Review and Data Security
On December 28, 2021, the Cyberspace Administration of China (the “CAC”) and several other PRC
authorities jointly issued the Cybersecurity Review Measures (جwhich became
effective on February 15, 2022. The Cybersecurity Review Measures provides that a critical information
infrastructure operator purchasing network products and services, and platform operators carrying out
data processing activities that affect or may affect national security, must apply for cybersecurity review.
The Cybersecurity Review Measures also provide that a platform operator with more than one million
users’ personal information aiming to list abroad must apply for cybersecurity review. According to the
Regulations on the Administration of Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ ) promulgated by
the State Council of the People’s Republic of China on September 24, 2024 and to be implemented on
January 1, 2025, network data processors carrying out network data processing activities that affect or
may affect national security shall conduct national security reviews in accordance with relevant state
regulations.
Our Directors and our PRC Legal Advisor are of the view that the Cybersecurity Review Measures,
if implemented in current form, are not applicable to our Group and will not have material adverse impact
on our business operations or the proposed Listing, as the relevant PRC authorities are unlikely to
identify us as a critical information infrastructure operator based on the following reasons:
(1) as of the Latest Practicable Date, we had not received any notice or determination from
relevant PRC authorities identifying us as a critical information infrastructure operator;
(2) our business does not and will not involve the operation of critical information infrastructure
as defined under the Security Protection Regulations for Critical Information Infrastructure
(ᚐૢԷ ), which, in case of destruction, loss of function or leak of
data, may result in serious damage to the national security, the national economy and the
people’s livelihood and public interests;
(3) as of the Latest Practicable Date, we had not encountered any incident of data or personal
information leakage, violation of data protection and privacy laws and regulations, or
investigation or other legal proceeding that may materially and adversely affect our business
operation; and
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(4) we have installed a well-established system to prevent such data and personal information
leakage.
Having inspected the operation of our Group’s sample products, their user manuals, and the business
model of our Group, and were given to understand that our Group’s products do not collect any user data
or carry out any data processing activities, and having considered, among others, the view of the PRC
Legal Advisor, and obtained the confirmation from the PRC legal advisor of the Joint Sponsors in which
they concurred with the view of the PRC Legal Advisor, nothing has come to the attention of the Joint
Sponsors which led them to have any concern on the above Directors’ view.
RELEV ANT ACTIVITIES IN RESPECT OF THE RELEV ANT COUNTRIES WITH
INTERNATIONAL SANCTIONS EXPOSURE
Through executive orders, passing of legislation or other governmental means, the Relevant
Sanctions Authorities, including certain authorities of the U.N., the U.S., the E.U., the U.K., and
Australia, have implemented measures that impose economic sanctions against the Relevant Countries or
targeted industry sectors, groups of companies, persons or organizations from the Relevant Countries.
During the Track Record Period, we sold our products to customers located in Armenia, Azerbaijan,
Bosnia and Herzegovina, Egypt, Iran, Hong Kong, Lebanon, Myanmar/Burma, Romania, Russia
(excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions), Serbia, Tunisia, Turkey,
Ukraine (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) and Venezuela. These
Relevant Countries are subject to certain forms of International Sanctions programs administered by the
Relevant Sanctions Authorities. In particular, Iran was subject to comprehensive sanctions during the
Track Record Period, and since February 2022, Russia has been subject to expanding sanctions scope by
the Relevant Sanctions Authorities. During the Track Record Period, we did not sell any products to the
Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions, nor did we sell or procure our products to
or from companies, persons or organizations while they are on the list of Sanctioned Targets administered
by the Relevant Sanctions Authorities.
During the Track Record Period, some of our cobots sold to Russia (excluding Crimea, Luhansk,
Donetsk, Zaporizhzhia and Kherson regions) were under the Relevant Custom Codes, such codes stand
for (1) industrial robots, (2) parts of machines and mechanical appliances having individual functions, (3)
machines for additive manufacturing by rubber or plastic deposit, and (4) parts of machines for additive
manufacturing. As advised by our International Sanctions Legal Advisor, such cobots falling under the
Relevant Custom Codes were prohibited from being exported to Russia under sanctions laws and
regulations of the E.U. and the U.K. During the Track Record Period, we recorded an insignificant
portion of revenue from the sales of cobots to Russia (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia
and Kherson regions) which falls under the Relevant Custom Codes, such as our CR series ( industrial
robots ), MG400 ( industrial robots ), integrated cobots for printing ( machines for additive manufacturing
by rubber or plastic deposit ), and the accessories ( parts of machines and mechanical appliances having
individual functions ; parts of machines for additive manufacturing ), being nil, RMB2.2 million, RMB1.6
million and RMB3.1 million in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively,
representing nil, 0.9%, 0.5% and 2.6% of our total revenue in the same periods, respectively. On the other
hand, our remaining sales to Russia (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson
regions) during the Track Record Period mostly consisted of Magician Series cobots and relevant
accessories, which do not fall under the Relevant Custom Codes, and thus, as advised by our International
Sanctions Legal Advisor, are not prohibited from being exported to Russia under sanctions laws and
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regulations of the E.U. and the U.K. During the Track Record Period and up to the Latest Practicable
Date, no cobots or products were sold to Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions,
and since June 2024, our Group has ceased sales of all cobots to Russia falling under the Relevant Custom
Codes.
As advised by our International Sanctions Legal Advisor, Russia (excluding Crimea, the Luhansk
People’s Republic, the Donetsk People’s Republic, the Zaporizhzhia and Kherson regions) was not
subject to a general and comprehensive export, import, financial or investment embargo under U.S.
sanctions laws and regulations. However, since February 2022, Russia has been subject to sanctions
measures under U.S. executive orders, among which, Executive Order 14024 expanded the authority of
OFAC to designate and sanction persons or entities determined to “have materially assisted, sponsored, or
provide financial, material, or technological support for, or goods or services to or in support of
architecture, engineering, construction, manufacturing and transportation sectors of the Russian
Federation economy.” Such U.S. executive orders specified the restrictions for (1) transactions with or
export to the designated persons or entities; (2) export of products, parts, commodities, software or
technology from the U.S.; and (3) export of products and its applicable limits outside of U.S. involving
U.S. origin components. During the Track Record Period, (1) the Group has not made any sales to any
designated persons or entities under the relevant U.S. sanctions laws, regulations and executive orders,
(2) the Group did not export, products, parts, commodities, software or technology from the U.S. under
the relevant U.S. sanctions laws, regulations and executive orders, and (3) the sales of cobots to Russia
(excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) falling under the Relevant
Custom Codes did not involve U.S. origin components over the applicable limits under the relevant U.S.
sanctions laws, regulations and executive orders, therefore, based on the abovementioned facts, the
Group was advised by our International Sanctions Legal Advisor that the Group did not implicate
violations of U.S. sanctions laws, regulations and executive orders.
During the Track Record Period, we generally include warranties and after-sales service obligation
in our agreements with customers for products under the Relevant Custom Codes. As confirmed by our
Directors that during the Track Record Period and up to the Latest Practicable Date, no request for
exchange, replace, further deliver or refund under warranty or after-sales services was made by any of
such customers. The relevant warranties and after-sales services obligation generally last for 12 to 15
months, and the last warranty and after-sales service obligation will expire in May 2025. As advised by
our International Sanctions Legal Advisor, the Group should not exchange, replace, further deliver or
refund any product under the Relevant Custom Codes, or perform any warranties and after-sales services
obligation included in our Group’s agreements with customers for products under the Relevant Custom
Codes. Since June 2024, our Group has ceased sales of all cobots to Russia falling under the Relevant
Custom Codes and provision of all such warranties and after-sales service in June 2024. As advised by
our PRC Legal Advisor, the maximum legal exposure due to any potential claim from our customers as a
result of cessation of warranties and after-sales services obligation that were still valid as of the Latest
Practicable Date shall not exceed RMB3.2 million, being the total revenue generated from the relevant
sales.
In June 2024, we have conducted an internal control review of our Group’s business activities with
respect to the compliance of the International Sanctions laws and regulations and enhanced our internal
control measures with respect to sanctions and export control since June 2024.
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International Sanctions Laws Analysis
Application of economic sanctions to our Relevant Activities
Our International Sanctions Legal Advisor has advised us that, based on the review to assess the
sanctions risk, as well as the factors set out below, save as the sales of cobots to Russia (excluding
Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson regions) falling under the Relevant Custom Codes
by the relevant Group company which may constitute as Secondary Sanctionable Activities, (1) none of
our Group nor any of our counterparties, including customers and suppliers, during the Track Record
Period and up to the Latest Practicable Date was listed as a Sanctioned Target administered by the
Relevant Sanctions Authorities; and (2) our Group’s business dealings with our counterparties, including
customers and suppliers, during the Track Record Period and up to the Latest Practicable Date did not
constitute Primary Sanctioned Activities or Secondary Sanctionable Activities, as:
• our Company is incorporated in China, and except for a few non-principal subsidiaries
incorporated in Hong Kong, the U.S., Germany and Japan, all of our subsidiaries were
incorporated in China; thus, none of our group companies are located, incorporated, organized,
or domiciled in the Relevant Countries;
• neither of our Company nor any of our subsidiaries was listed as a Sanctioned Target
administered by the Relevant Sanctions Authorities;
• none of our shareholders is located in countries subject to comprehensive sanctions or was
listed as a Sanctioned Target administered by the Relevant Sanctions Authorities;
• none of the Directors or senior management of our Company are nationals of the Relevant
Jurisdictions;
• our Company is not owned 50% or more or controlled by nationals of the Relevant
Jurisdictions;
• although we have subsidiaries in the U.S. and Germany, none of their employees have been
involved in any way (either directly or indirectly) in any sales of our products to the Relevant
Countries (including the negotiation, approval or on-going performance of these sales); in
addition, no financing or financial assistance has been received by our Group, from any entity,
body or corporation incorporated or located in the Relevant Jurisdictions;
• we have implemented our Sanctions and Export Control Compliance Measures since June
2024, to ensure that going forward (1) our counterparties, including customers and suppliers
are not listed as a Sanctioned Target administered by the Relevant Sanctions Authorities; and
(2) our products sold to the Relevant Countries will not breach any International Sanctions
laws and regulations; and
• some of our cobots and relevant accessories sold to Russia (excluding Crimea, Luhansk,
Donetsk, Zaporizhzhia and Kherson regions) were under the Relevant Custom Codes. As
advised by our International Sanctions Legal Advisor, such cobots falling under the Relevant
Custom Codes were prohibited from being exported to Russia under sanctions laws and
regulations of the E.U. and the U.K. Our Company has confirmed that during the Track Record
Period and up to the Latest Practicable Date, no cobots or products were sold to Crimea,
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Luhansk, Donetsk, Zaporizhzhia and Kherson regions, and since June 2024, we will not accept
any further orders from Russia for any products of such categories that are prohibited under the
sanctions laws and regulations of the Relevant Jurisdictions. We have been advised by our
International Sanctions Legal Advisor that potential breaches could be corrected by taking the
position that from now on, our Group will no longer make sales in Relevant Countries that
would breach the sanctions laws and regulations of the Relevant Jurisdictions.
Application of export controls to our business
The Relevant Sanctions Authorities govern the exports, re-exports and transfers of products,
software and technology, including dual-use products which, while not intended for military use, could
potentially be used in military activities.
Pursuant to the U.S. Export Administration Regulations, an item may be exempted from being
subject to such regulations if it fulfills certain criteria, such as where it is a foreign made item, which
contains not more than 25% U.S. origin content by value (the “De Minimis Rule”). Such 25% U.S. origin
content by value generally refers to foreign made products which (1) incorporate U.S. origin parts or
components into the finished product and those parts or components would themselves require a specific
license if they were exported separately and (2) the fair market value of those parts or components as a
percentage of the total value of the finished product exceeds 25%.
It is noted that (1) none of our Group nor any of our counterparties, including customers and
suppliers, during the Track Record Period and up to the Latest Practicable Date was listed as a Sanctioned
Target administered by the Relevant Sanctions Authorities; (2) all of our cobots (including our cobots
falling under the Relevant Custom Codes) are not listed as a military products by the Relevant
Jurisdictions; and (3) all of our cobots (including our cobots falling under the Relevant Custom Codes)
are not intended for military use. We have been advised by our International Sanctions Legal Advisor that
any potential past breaches could be corrected by taking the position that from now on, our Group will no
longer make sales in Relevant Countries that would breach the sanctions laws and regulations of the
Relevant Jurisdictions.
We have implemented our Sanctions and Export Control Compliance Measures since June 2024 to
ensure that going forward our products sold to the Relevant Countries will not breach any International
Sanctions laws and regulations and are fit for exporting to their destinations. Since June 2024, we require
all of our suppliers to certify their compliance with U.S. export control regulations with respect to any
U.S.-origin goods, raw materials or components supplied to us as part of our export control compliance
measures. Furthermore, during the Track Record Period, we did not import any products, raw materials
and components directly from the U.S. and E.U. into China that are material to our business operation.
Analysis conclusion
In summary, our International Sanctions Legal Advisor has advised us that the Relevant Activities of
our Group during the Track Record Period and up to the Latest Practicable Date did not result in and are
not subject to any material sanctions risk to the Relevant Persons under the International Sanctions of the
Relevant Jurisdictions.
Given the scope of the Global Offering and the use of proceeds, our International Sanctions Legal
Advisor is of the view that the involvement by the Listing Committee, the Stock Exchange and its related
group companies and our Company’s investors and shareholders in the Global Offering should not
implicate any applicable International Sanctions risk on them.
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While only the export of cobots to Russia falling under the Relevant Custom Codes is prohibited
under sanctions laws and regulations of the E.U. and the U.K., as advised by our International Sanctions
Legal Advisor, potential breaches could be corrected by taking the position that from now on, our Group
will no longer make sales in Russia that would breach the sanctions laws and regulations of the Relevant
Jurisdictions.
The Group has been advised by our International Sanctions Legal Advisor that, in general, sanctions
laws and regulations of the E.U. and the U.K. apply to their nationals wherever they are physically
located; any legal person, entity or body incorporated or constituted under their laws; or any individual,
legal person, entity or body in respect of any actions done in whole or in part within their territories. In
relation to the sales of cobots to Russia (excluding Crimea, Luhansk, Donetsk, Zaporizhzhia and Kherson
regions) falling under the Relevant Custom Codes by the relevant Group company, since (i) the relevant
Group company was not incorporated in the E.U. or the U.K.; and (ii) the relevant transactions were not
conducted in whole or in part within the E.U. or the U.K., there is no relevant “nexus” with the E.U. or the
U.K. We have been advised by our International Sanctions Legal Advisor that (1) it is unlikely that such
Group company will be fined or such fine could be enforced against such Group company; and (2) in the
unlikely event that such Group company is fined, and considering as a first offender of such sanctions, it
is expected that such penalty should not exceed RMB1.8 million.
While we do not intend to increase the levels of our business dealings in respect of the Relevant
Countries, by ensuring our continued compliance with our internal control measures with respect to
International Sanctions, we would still be able to continue to conduct limited business activities with the
Relevant Countries, including Russia in spite of (but in compliance with) the recent International
Sanctions on Russia. In the future when the sanctions laws and regulations evolve, our Group shall
continue and maintain its compliance with our internal control measures, and to cease business activities
with the Relevant Countries (including Russia), if and when required, our Directors are of the view that
any such cessation will not have any material impact on our Group’s financial position and business
operations.
Save for our sales of cobots to Russia falling under the Relevant Custom Codes during the Track
Record Period, as advised by our International Sanctions Legal Advisor, the sales of our other cobot
products and accessories to the Relevant Countries during the Track Record Period did not implicate
violations of International Sanctions.
Sanctions and Export Control Compliance Measures
We have established and will continue to implement the following internal controls and risk
management measures related to Sanctions and Export Control Compliance:
• issue annual management compliance commitment statement to all employees, ensuring
compliance with relevant laws and regulations;
• establish a compliance management committee and the compliance department consisting of
members with relevant experience and expertise in laws and regulations related to sanctions
and export controls, finance, risk management and compliance, to promote the effective
implementation of the sanctions and export control compliance programs;
• establish a system related to sanctions and export control compliance management, and
standardize the processes such as the business risk assessment and review, education and
training, consultation and reporting, investigation and supervision, and file management;
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• prior to engaging in business activities, evaluate sanctions and export control risks through:
° conducting the first round of know your client due diligence by the relevant business
departments on customers, suppliers, business partners and other counterparties,
including reviewing background information, such as identity, business nature,
ownership structure, geographic location and related parties, and setting up
corresponding internal profile records;
° performing on-boarding screening and on-going monitoring on an as needed basis to
check the counterparties against various lists of restricted parties and countries
maintained by the U.S., the E.U., the U.K., the U.N. and Australia, including, without
limitation, any government, individual or entity that is the subject of any sanctions and
export controls of which the lists are publicly available;
° review and continuously monitor whether the products we purchase and sell are subject to
relevant sanctions and export control regulations, and whether there are further
classification and export authorization license requirements;
° conducting review and further investigation by the compliance department to confirm
where there is any situation that may trigger sanctions and export controls, especially
when there is a potential screen hit, license determination concern or question, or the
presence of a red flag transaction;
• require the high-risk counterparties to issue a letter of commitment for compliance with
sanctions and export controls, or include a compliance clause in contracts, requesting them to
undertake that (i) any export, re-export, sales or transit of our products to third parties shall
comply with applicable laws and regulations related to sanctions and export controls; (ii)
products will not be directly or indirectly exported, re-exported, sold or transited to any
embargoed or sanctioned countries or regions; (iii) products will be used for civilian end-users
and purposes and will not be involved in any activities prohibited by applicable laws and
regulations related to sanctions and export controls;
• continuously monitor, collect updates of recent legal development in the fields of sanctions and
export controls through public information by the compliance department, ensuring the
effective implementation of new rules, such as conducting refreshed screening of high-risk
counterparties against updated sanctions lists;
• establish an internal compliance learning platform to be regularly updated by the compliance
department, through which our management and employees can keep abreast of the latest
information related to sanctions and export controls;
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• conduct ongoing and comprehensive sanctions and export control compliance training for our
management and employees to enhance compliance awareness and response capability,
including courses tailored to senior management, new staff, and staff from relevant business
functions, such as sales, finance, and purchase, with the intent to ensure that trainees
understand the latest regulatory requirements and company policies, and understand how to
timely and effectively identify, assess and report risks and potential issues associated with
sanctions and export controls during daily business activities;
• support and protect employee reporting of potential sanctions and export control compliance
risks, and conduct relevant investigations if required;
• organize special audit inspections of relevant business departments on a regular basis to assess
their compliance with sanctions and export control; and
• engage external consultant to advise on the development of risk-based sanctions and export
controls compliance program to mitigate potential risks associated with our business activities.
View of the Internal Control Consultant
In May 2024, we appointed an internal control consultant to perform a review over our internal
control management system for sanctions and export controls and provide recommendations to us for
enhancing our internal control management measures. Based on the internal control consultant’s review,
they have identified certain internal control deficiencies and recommended that we enhance our internal
control management measures by establishing and implementing policy and procedures on the
management of sanctions and export controls and providing training to all staff as an introduction of the
enhanced management system. Since the adoption of such internal control management measures in June
2024, the internal control consultant has not identified any significant internal control deficiencies in
relation to our internal control measures in the follow-up review. Our Directors and the internal control
consultant are also of the view that, we have adequate and effective internal controls procedures and
policies in place to identify and mitigate material risks related to the sanctions and export control.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ESG Governance
We are committed to fostering enduring and positive impact on the environmental, social and
governance (“ESG”) aspects for our customers, suppliers, and the communities influenced by our
operations and are committed to operating our business in a lawful, ethical and responsible way. Our
management places significant emphasis on ESG issues and has established and enforced pertinent
operational mechanisms.
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Our Board regularly reviews the overall ESG performance, ensuring a comprehensive assessment of
our Company’s adherence to sustainable practices. In collaboration with our management, our Board
evaluates our Company’s ESG performance by referencing industry leaders and peers of comparable
sizes, providing a benchmark for continuous improvement. Additionally, our Board and management
closely monitor the cooperation between different business divisions, ensuring that operations and
practices align with relevant ESG visions, approaches, strategies, and initiatives. To foster effective
communication, we supervise the establishment of communication methods among divisions to facilitate
the exchange of ESG-related issues. Furthermore, our management reports the annual ESG report to our
Board, highlighting key insights and recommendations. Through various communication channels,
including Board meetings, special reports, and other relevant means, our Board receives regular updates
on our Company’s ESG performance, vision, and strategies. We hold regular meetings to ensure our
Board’s awareness of ESG developments. Our Board takes a role in monitoring and tracking the plans,
budgets, and expenditures related to ESG measures and initiatives.
ESG Strategy and Risk Management
The table below sets forth the material ESG-related issues we identified that have significant impact
on our business.
ESG-related issues Impact period Our strategies Targets
Operational
compliance ....
Long-term Compliance with laws and regulations underpins our operations and
reputation. We established comprehensive procurement and supplier
management procedures as well as a supplier admission and
performance review system, requiring suppliers to comply with
environmental protection laws and purchasing materials in a
responsible and sustainable manner. We also provide trainings on
product quality control and management to enhance employees’
awareness of compliance.
We continue to strictly comply
with ESG-related laws and
regulations at the operational
level.
Product quality
management . . .
Long-term We have implemented a comprehensive set of policies to ensure quality
control throughout the entire production to after-sales process. These
policies encompass various aspects, including warehouse management,
manufacturing processes, quality inspections, and post-delivery
service, among others.
We aim to achieve 0% safety
accident rate for our products.
Research and
development . . .
Long-term As an innovative enterprise, we maintain a strong focus on research and
development. To standardize the product development and project
management efforts within our research and development process, we
have implemented effective controls for research and development
projects, new product development, and design processes. These
controls are aimed at improving product development quality and
enhancing our competitive edge.
We will allocate certain amount of
our revenue towards research
and innovation.
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ESG-related issues Impact period Our strategies Targets
Intellectual property
protection ....
Long-term As part of our commitment to protecting our technological advancements,
we actively pursue patent applications to safeguard our achievements.
We have established a series of policies related to intellectual property
management, including but not limited to the R&D Intellectual
Property Management Policy, Sales and After-sales Intellectual
Property Management Procedures, and Technical and Commercial
Confidentiality Management Policy.
To demonstrate a commitment to
educating employees about
intellectual property,
preventing violations of
rights, and actively pursuing
the development and
protection of patents, we have
set the following targets:
• Achieve 100% training on
intellectual property among
employees.
• Ensure zero incidents of
intellectual property rights
violations each year.
Employment
compliance ....
Long-term We prioritize the protection of the lawful rights and interests of ours
employees. To ensure compliance with employment regulations, we
have established policies related to recruitment, employment,
performance management, and attendance management.
To maintain employment
compliance, our target is to
have no major violations of
employment regulations each
year.
Occupational health
and safety ....
Long-term We develop an annual work plan for occupational safety and health, set
annual safety management objectives, and enhance our team’s health
and efficiency through the identification and mitigation of hazards,
emergency drills, safety training and health screening.
We consider the health and safety
of every employee as our
primary responsibility, and we
strive to ensure that there are
no major safety accidents.
Global warming poses a wide range of risks to business operations. We actively identify and monitor
climate-related risks and opportunities that may affect our business, strategy and financial performance.
For climate-related physical risks, the increased severity of extreme weather events and changes in
precipitation patterns due to climate change can lead to significant operational challenges. These
challenges include delays in project planning authorization and implementation, transportation
difficulties, supply chain disruptions, and negative impacts on the workforce. Such disruptions may result
in a reduction in our production capacity. To address these risks, we have developed comprehensive crisis
and emergency management plans to manage the impacts of increasingly frequent extreme weather
events. In response to unusual weather conditions, we have implemented an emergency evacuation plan
and issue safety warnings to notify employees and on-site workers about special work and safety
arrangements. Additionally, we adopt special work arrangements, such as policies under typhoon signals,
to safeguard our workforce. Furthermore, we closely monitor daily observatory predictions and will
promptly notify our employees and other personnel of any related measures in case of extreme weather.
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Metrics and Targets
Environmental protection
Responsible environmental management can lead to economic and environmental co-existence. We
have been complying with the relevant laws and regulations of the jurisdictions where we operate and
formulated our internal environmental management documents based thereon, so as to carry out
environmental management more efficiently and achieve sustainable development. We have established
and implemented an environmental management system that meets the requirements of ISO 14001:2015.
To protect the environment, we have set the following goals:
Aspect Target (1)
Greenhouse gas (“GHG”)
emission .................
(1) Reduce the total greenhouse gas emission intensity by 5% by
2026 (with the year 2023 as the base year)
(2) Reduce the Scope 2 greenhouse gas emission intensity by
6% by 2026 (with the year 2023 as the base year)
(3) Reduce the Scope 3 greenhouse gas emission intensity by
5% by 2026 (with the year 2023 as the base year)
Electricity consumption ...... Reduce the electricity consumption intensity by 4% by 2026 (with
the year 2023 as the base year)
Water Consumption ......... Reduce the water consumption intensity by 6% by 2026 (with the
year 2023 as the base year)
(1) All intensities are calculated based on million RMB revenue.
In 2021, 2022, 2023 and the six months ended June 30, 2024, our historical expenditure on
environmental compliance was RMB49,040, RMB54,500, RMB59,893 and RMB46,087, respectively.
The cost of meeting environmental compliance includes, but is not limited to, third-party environmental
testing or treatment, investment in establishing an environmental management system, and environmental
safety management service fees. During the Track Record Period, we did not have any material
non-compliance with environmental laws and regulations. We monitor the following metrics to assess and
manage the environmental and climate-related risks arising from our manufacturing processes:
GHG emissions
To reduce GHG emissions, we have implemented the following emission reduction measures:
• implementing paper conservation strategies by optimizing computer and printer settings for
double-sided printing and ink-saving mode, promoting the use of electronic communication
technology, monitoring and setting print limits for users when applicable, and conducting
periodic paper usage audits to identify areas for improvement; and
• promoting sustainable transportation practices among employees by encouraging the use of
public transportation, prioritizing direct flights for necessary business travel, and utilizing
video conferences as a viable alternative to non-essential international trips.
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The following table sets forth our GHG emissions in 2021, 2022 and 2023 and the six months ended
June 30, 2024, respectively:
Y ear ended December 31, Six months
ended June 30,
2024GHG Emissions 2021 2022 2023
Total GHG emissions (t-CO 2e )......... 229.48 1,374.36 1,817.02 815.68
Total GHG Emissions Intensity
(t-CO 2e/Revenue RMB’ million) ..... 1.32 5.70 6.34 6.77
Scop e 1 — direct GHG emission
(t-CO 2e)(1) ........................ N / A N / A 1.90 3.86
Scop e 2 — indirect energy emission
(t-CO 2e)(2) ........................ 54.44 1,199.42 1,287.40 616.83
Scope 2 Intensity (t-CO 2e/Revenue
RMB’ million) .................... 0.31 4.98 4.49 5.12
Scop e 3 — other indirect emission
(t-CO 2e)(3)(4) ...................... 175.04 174.94 527.72 194.99
Scope 3 Intensity (t-CO 2e/Revenue
RMB’ million) .................... 1.00 0.73 1.84 1.62
(1) The calculation scope of GHG emissions (Scope 1) includes combustion of fuels in mobile sources. Due to our
acquisition of vehicles in 2023, there were no relevant emissions in 2021 and 2022.
(2) The calculation scope of GHG emissions (Scope 2) includes the purchased electricity and heating used by factories
and offices. Due to our property replacement in Shenzhen, the data for 2021 cannot be obtained.
(3) The calculation scope of GHG emissions (Scope 3) includes the emissions generated from the business air travel,
treatment of waste paper and electricity used for fresh water and sewage processing.
(4) The significant increase in our Scope 3 emissions in 2023 was primarily due to (a) the increase in our business volume
in 2023 resulted in a higher number of long-haul flights and (b) the normalization of business operations following the
pandemic which led to an increase in employee traveling for business purposes.
Resource consumption—electricity
We monitor our electricity consumption levels at our production bases and offices. This includes
conducting monthly electricity usage statistics to closely track our energy consumption patterns. We have
set it as our target to strengthen the promotion of energy-saving measures and reduce electricity
consumption. We reduce electricity usage through the following measures:
• completely turning off electronic devices during non-working hours;
• paying attention to unplugging electric kettles and microwaves, especially before weekends
and holidays, to reduce power consumption in the office; and
• installing independently controllable lighting switches in different lighting zones and using
motion sensor or sound-activated lights in public areas.
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The following table sets forth our electricity consumption for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
2024Electricity Consumption 2021 (1) 2022 2023
Electricity consumption (MWh) ........ 61.56 1,453.75 1,620.33 752.84
Electricity Consumption Intensity
(MWh/Revenue RMB’ million) ....... 0.35 6.03 5.65 6.25
(1) Due to our property replacement in Shenzhen, the data for 2021 cannot be obtained.
Resource consumption—water
We monitor our water consumption levels at our production bases and offices and have implemented
various measures to promote water conservation. These include encouraging employees to turn off
faucets tightly to prevent water leakage, posting water-saving reminder stickers in restrooms to raise
awareness about responsible water usage, and promptly repairing any dripping faucets to minimize water
wastage. By implementing these initiatives, we have set it as our target to strengthen the promotion of
water-saving measures and reduce water consumption. The following table sets forth our water
consumption for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
2024Water Consumption 2021 (1) 2022 2023
Water Consumption (m 3) .............. N / A 10,508.70 9,906.00 4,268.00
Water Consumption Intensity
(m3/Revenue RMB’ million) ......... N / A 43.60 34.55 35.43
(1) Due to our property replacement in Shenzhen, the data for 2021 cannot be obtained.
Pollutant management
Vehicles serve as the primary source of air pollutant emissions for our Company. Due to the
availability of air pollutant data for only one year, we currently do not have sufficient data to establish
quantitative targets. However, we are committed to reducing air pollutant emissions and will be taking the
following measures:
• reducing the use of motor vehicles and exploring options such as electric vehicles to minimize
related emissions; and
• encouraging the utilization of public transportation by our employees and adopting online
meetings whenever possible.
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The following table sets forth our air pollution for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
2024Air Pollutant 2021 (1) 2022 (1) 2023
NOx (kg) ........................... N / A N / A 0.852 1.461
SOx (kg) ............................ N / A N / A 0.012 0.024
PM (kg) ............................ N / A N / A 0.066 0.109
(1) Due to our acquisition of vehicles in 2023, there were no relevant emissions in 2021 and 2022.
Green office initiatives
In our commitment to achieving our green office targets, we have taken proactive steps to enhance
our sustainability efforts. We have established an intelligent IoT platform management system to
effectively monitor and manage various aspects of our office operations. As part of this system, we have
implemented intelligent gateways, smart scene panels, smart lighting fixtures, intelligent light sensors, as
well as smart plugs and intelligent air conditioning controllers. These advanced technologies enable us to
optimize energy usage, improve operational efficiency, and create a more environmentally friendly
workspace. By integrating these intelligent solutions into our office infrastructure, we enhance our ability
to track and control energy consumption, reduce waste, and contribute to a more sustainable future.
Social responsibility
Labor practice
We commit to promoting fairness and equality in the workplace and adhere to a policy of
transparency and fairness in recruitment and promotion, ensuring that all employees are provided with
equal opportunities in matters including recruitment, promotion, welfare protection, and career
development.
We do not tolerate any form of discrimination, including gender, sexual orientation, disability, age,
race, nationality, family status, or any other legally protected factors and do focus on embracing diversity
within our organization and equal and respectful treatment of all of our employees in their hiring,
training, wellness and professional and personal development. This approach applies to all employee
activities and human resources matters, including recruitment, promotion, transfer, rewards, and training,
among others. While maximizing equal career opportunity for everyone, we will also continue to promote
work-life balance and create a pleasant workplace for all of our employees.
Employee training and development
Based on the needs of our Group’s business development, Dobot Training Administration System is
formulated to standardize our Company’s training work, improve the quality of training and provide a
reliable basis for employee training management. With the aim of further supporting professional
development, we engage in various kinds of training programs and procure training resources relevant to
specific job roles. This includes inviting external instructors, which is considered one of the company’s
welfare benefits. By providing opportunities for continuous learning and growth to our employees, we
aim to enhance their skills and knowledge, promoting their professional advancement within our Group.
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Occupational health and safety
Compliance with laws and regulations pertaining to employee health and safety is a priority for our
operations. To mitigate risks and ensure the well-being of our employees, we have developed
comprehensive internal policies and measures on occupational health and safety. These include safety
management plans and inspection schedules to identify and address potential hazards. During the Track
Record Period, we had maintained a strong safety record with no significant accidents reported, and we
were not aware of any material claims related to health and occupational safety.
Supply chain management
Our supplier chain management is guided by our commitment to establishing a well-defined
supplier management procedure and implementing a rigorous supplier risk management process. The
procurement department, research and development department and quality department are primarily
responsible for introducing suppliers. We conduct a comprehensive three-step process when introducing
new suppliers, which includes supplier material review, supplier investigation, and collective
decision-making. We generally require suppliers to provide environmentally friendly products based on
business needs. This includes encouraging suppliers to minimize the use of raw materials during
production and design processes.
We believe good supply chain management practices to ensure quality, reliability and efficiency of
products. Suppliers are evaluated based on the following criteria: quality system documents, procurement
and supplier management, engineering management, warehouse management, quality management, and
product management. Only suppliers who meet these criteria will be considered for recruitment or
selection.
Product responsibility
Ensuring product excellence is of paramount importance to us. We have implemented a
comprehensive quality management system and products undergo testing before being introduced to the
market. Additionally, we actively manage and track customer feedback, taking appropriate actions in
response to product quality and safety issues. We consider customer feedback as a valuable resources and
treat each feedback seriously. We strictly enforce a meticulous quality control procedure, which
encompasses detailed procedures for managing incoming inspections, in-process inspections, and
finished product inspections. Our commitment to maintaining high quality standards is demonstrated by
our certifications in health, safety, and service management systems, including, but not limited to,
ISO 9001:2015 and ISO 14001:2015.
During the Track Record Period, we had successfully maintained an impeccable record with no
product recalls attributed to safety and health concerns. Furthermore, we had received no substantial
complaints regarding product quality.
Data security and privacy protection
We have established information security management policy to strengthen our information security
practices, standardize information security operations, and enhance our capability and level of
information security protection. The policy outlines the management structure of information security,
with the information security committee being responsible for its implementation.
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When handling confidential or classified information during company operations, the appropriate
approval process must be followed. To ensure data security, all servers and office computers must have
software designated by the information department, with anti-virus, anti-malware, and intrusion
prevention capabilities installed. Without approval from the information security team, individuals are
prohibited from uninstalling security software. In the event of internal information leakage or potential
breaches, employees are expected to take immediate remedial measures and promptly report to the
information security team, which will promptly respond and address the situation.
Operational compliance
In the pursuit of upholding the highest standards of ethical conduct and integrity in the operations,
we have established a comprehensive anti-fraud policy that encompasses policies on conflict of interest,
confidentiality, bribery, anti-corruption, and equal opportunity. All violations of the anti-fraud policy and
business ethics will be addressed and could lead to termination of the business relationship or
employment. To reinforce the principles stated, we have developed an anti-fraud policy to prevent any
forms of corruption and bribery. We incorporate fraud risk assessment into our enterprise risk assessment
work and implement relevant internal controls measures for anti-fraud, such as approval, authorization,
and verification, cross-checking, division of responsibilities and performance review in different forms.
We have established different reporting channels, including reporting hotline and email, as well as
suggestion box, etc. We encourage employees and relevant parties to report any internal violations of
discipline or law, fraud and behaviors that damage our Group’s interests and image, in an orderly manner.
Community engagement
We are committed to cultivating young people to become talents in science and technology
innovation and have hosted multiple educational and popular science public welfare activities. We have
launched AI public welfare experience activities, invited young people to visit our headquarters, provided
immersive experiences with cobot products, and sparked young people’s interest in AI. In the future, we
will continue to invest in the field of community education, providing young people with diverse learning
opportunities and resources to help foster innovative talents. We also plan to collaborate with schools to
establish specialized scholarships to incentivize technological innovation. Furthermore, we plan to hold
at least one donation event each year, including but not limited to donating public welfare books and used
goods. At the same time, we plan to hold at least one charity sale donation event each year, continuing to
organize employees to participate in public welfare charity donations and assist in community
development.
PATH TO PROFITABILITY
We are at a relatively early stage of commercialization of our cobot products. We have historically
achieved continuous revenue growth as we successfully developed and launched new products during the
Track Record Period. Our proactive endeavors in product commercialization and market expansion have
contributed to our revenue growth during the Track Record Period. Our revenue increased at a CAGR of
28.3% from RMB174.3 million in 2021 to RMB286.7 million in 2023 and by 9.5% from RMB110.0
million in the six months ended June 30, 2023 to RMB120.5 million in the six months ended June 30,
2024. We are a top 2 player in the global cobot industry and the No.1 player among all Chinese cobot
companies, with a global market share of 13.0% as measured by shipment volume in 2023, according to
the CIC Report. The global cobot industry is at a nascent stage of development, whose market size
accounted for less than 2% of the global robot industry in terms of revenue in 2023. According to the
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same source, we rank seventh in the global cobot industry with a global market share of 3.6% in terms of
global revenue generated from cobots in 2023. Our export volume of cobots has consistently ranked first
in China for six consecutive years from 2018 to 2023, according to the same source.
Over the years, we have built up a broad and geographically diversified customer base in China and
globally, spreading across over 80 countries and regions. We have made proactive efforts in product
commercialization and global market expansion, which has contributed significantly to the expansion of
our market reach and customer base, and as a result, the growth of our sales volume and revenue. In 2021,
2022, 2023 and the six months ended June 30, 2024, we had 289, 411, 434 and 304 direct sale customers,
respectively, and in the same years/period, we had 344, 387, 358 and 224 distributors, respectively.
During the Track Record Period, we sold a total of over 53,000 cobots globally. We expect to further
expand our sales network, grow revenue base, increase our market share and solidify our industry leading
position as we continue to develop technologies, enhance customer experience, establish effective
commercialization strategies and successfully market new products.
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, we had loss for the
year/period of RMB41.8 million, RMB52.5 million, RMB103.3 million, RMB51.7 million and RMB59.9
million, respectively. We have implemented Share Incentive Schemes for the purpose of providing
incentives and rewards to eligible participants who contribute to the success of our operations.
Eliminating the impact of share-based payments expenses, our adjusted net loss (non-IFRS measure) in
2021, 2022, 2023 and the six months ended June 30, 2023 and 2024 amounted to RMB43.0 million,
RMB39.9 million, RMB81.8 million, RMB45.8 million and RMB35.0 million, respectively. Our net
losses during the Track Record Period were in part attributable to the substantial amounts of research and
development expenses and selling and marketing expenses to design, develop and market our products
and enhance our market presence and brand visibility. We may continue to incur net losses in the short
term. We are optimistic in achieving profitability as we expect to continue to expand our business scale
and improve our operational efficiency.
We had cash and cash equivalents of RMB149.1 million, RMB297.8 million, RMB111.0 million and
RMB73.0 million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. Our primary
uses of cash are to fund our procurement of raw material, research and development and sales activities,
construction of our production facilities and other operational needs. During the Track Record Period, we
financed our capital expenditures and working capital requirements principally with funds from equity
financing, cash generated from our operations and bank borrowings. As of December 31, 2021, 2022 and
2023, June 30, 2024 and the Latest Practicable Date, we had utilized bank facilities of nil, RMB22.0
million, RMB8.0 million, RMB30.0 million and RMB49.0 million, respectively, and our remaining bank
facilities available for use were nil, RMB78.0 million, nil, RMB40.0 million and RMB120.0 million,
respectively. Taking into account the financial resources available to us, including our cash and cash
equivalents, future cash flow from operating activities, financial assets at FVTPL, available bank
facilities and the estimated net proceeds from the Global Offering, our Directors are of the view that we
have sufficient working capital to meet our present requirements and for the next 12 months from the date
of this prospectus.
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To pave the way for a long-term success in the evolving cobot industry and rapidly growing market,
we have been focusing on expanding our sales network and building and developing our research and
development and production capacity, rather than seeking immediate financial returns or profitability, in
order to lay a solid foundation to capture future growth of the global cobot industry. The global cobot
market size has grown significantly from US$466.6 million in 2019 to US$1,039.5 million in 2023, at a
CAGR of 22.2%, and is expected to reach US$4,950.0 million by 2028, at a CAGR of 36.6% from 2023
to 2028. As we expand our product offering and scale of our business, we expect to make continuous
improvement in our profitability.
We expect to continue to incur net losses after the Track Record Period. Going forward, we plan to
maintain sustainability and achieve profitability by (1) driving sustainable revenue growth and business
scale through (i) enriching and expanding our product offering that meets the demand of the rapidly
expanding market, (ii) leveraging global distributorship which complements our formidable localized
local marketing team that enables us to deepen penetration or expand into new markets or regions, and
(iii) cooperating, both in depth and scope, with reputable companies, as well as (2) effectively managing
our costs and expenses and continually improving our net profit margin.
Driving Sustainable Revenue Growth and Business Scale
To drive sustainable revenue growth and expand our business scale, we are committed to enriching
and expanding our product offering to meet the increasing demand of the rapidly evolving market. Our
strategy involves developing new products that cater to the dynamic needs of the market, thereby
enhancing our market share and visibility. Leveraging our research and development team consisting of
industry experts and senior engineers with extensive experience in the robotics industry, we intend to
focus on comprehensive improvements in product performance, quality and usability. This includes
developing software packages for specific applications such as welding and palletizing, which simplifies
product use in targeted applications and opens new markets. We also expect to make further
advancements in perception and interaction technologies to bolster our competitive edge.
Additionally, to maintain our competitive edge in the industry, we are in the process of developing
new models of our cobots, including the next-generation CR series with robotic drivetrain solutions,
structural design and control systems, more lightweight models for existing product series, and a new
product series targeting the medical and healthcare sector. These innovations aim to address the needs of
both the existing and new application settings, in particular commercial settings such as the medical and
healthcare sector. We are also investing in AI technologies and upgrading our X-Trainer, integrating
AI-based algorithms to enhance the intelligence and autonomy of our cobots. This integration will result
in cobots that are more versatile and adaptive, capable of learning from demonstrations and collaborating
effectively with humans in shared environments. As we continue to enhance the generalized learning
capabilities of our X-Trainer, we expect to have our AI-empowered cobots applied to increasingly diverse
use cases. These efforts are expected to drive significant growth and position us at the forefront of the
industry.
Moreover, we are expanding our presence in industrial sectors. We are striving for wider adoption of
our products in existing customers’ facilities. This includes expanding production lines and extending
use cases. For example, we aim to increase the number of cobots used in automotive manufacturing, from
welding to assembly and quality inspection. We are also seeking opportunities for adoption by other
large-scale factories. We are actively pursuing partnerships with major manufacturers in electronics and
pharmaceuticals to integrate our cobots into their production processes. In addition, we are closely
monitoring the establishment of new smart factories. As intelligent manufacturing becomes more
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prevalent, we aim to be involved from the early stages of factory setup, ensuring our cobots are integrated
into as many suitable facilities as possible.
In the commercial sector, we are focusing on penetrating chain restaurants with highly repetitive
and standardized processes. Our goal is to have our products validated by a customer and then replicated
across their other branches. Key areas include coffee art and brewing in cafes, food preparation in
fast-food chains, such as frying chips or stir-frying, and beverage preparation in bubble tea shops.
In the educational settings, we are tapping into the growing demand for robotics education by
deepening our cooperations with large education equipment integrators and promoting our educational
products through training bases and research centers in various provinces and cities across the country,
ensuring wide-reaching exposure to our products in educational and academic settings. We are focusing
on the construction of cobot laboratories that support industry-education integration, industrial talent
cultivation, and global robotics training.
To further deepen our market penetration and tap into new regions, we plan to further expand our
global sales network. Our collaboration with global distributors enables us to enhance the presence of our
products in new overseas markets without incurring substantial sales and marketing costs. We plan to
continue to expand the number of distributors to meet the increasing demand in these new markets.
Concurrently, we plan to utilize localized sales and marketing teams and technical support team to deepen
regional reach. In 2023, we established a technical support team in Japan, the United States and Germany
to proactively address the localized needs of end users. We plan to continuously improve sales and
marketing service quality through training and enhance our localized capabilities. We will also expand
our local teams in countries, such as the U.S. and Japan, thereby increasing the number of end customers
and improving customer engagement.
Enhancing customer engagement is also a priority. We plan to actively invite third-party developers
to join our ecosystem and provide necessary development tools, initiate marketing and advertising
campaigns, participate in large scale industry conferences and events, and sponsor robotics competitions.
These efforts are designed to drive revenue growth and solidify our market position.
In addition to these strategies, we seek more in-depth collaboration and broader scope with
esteemed customers globally. For example, we have been in discussion with one of the world’s largest
electric vehicle battery manufacturers to increase the adoption rate of our cobots in their workstations.
We also aim to raise our market share and visibility in the new retail industry by collaborating with a
leading Chinese coffee brand. Our advanced coffee-making cobots can perform tasks, such as customized
coffee making and intricate latte decoration, which we plan to market to coffee or milk tea companies
with a large number of retail outlets. Collaborations with these reputable companies will amplify our
achievements and attract a broader clientele and forge valuable partnerships with distributors. These
synergies are expected to catalyze further growth of our Company.
See “—Growth Strategies” for details of the above measures to achieve profitability.
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Continually Improving Net Profit Margin
Continually improving our net profit margin is crucial to achieving long-term profitability. We
expect lower manufacturing costs resulting from economies of scale as demand for our products
continues to grow. This will be further bolstered by the ongoing ramp-up of our production base in
Rizhao, Shandong. We also plan to introduce more automated production equipment and processes to
boost production efficiency and capacity, further reducing the manufacturing costs for our cobots. We
also aim to streamline our supply chain management and maintain control over raw material costs and key
component quality. By adopting our own surface mount production lines and introducing advanced
machining techniques, we can further enhance our production efficiency, product quality, and
cost-effectiveness. See “—Growth Strategies” for details of measures to enhance production capabilities
and streamline supply chain management.
We plan to further increase operational efficiency to improve net profit margin. We will enhance
customer acquisition efficiency, primarily driven by (1) brand and product loyalty for our distributorship
and direct sales channels; (2) achieving greater cost efficiency with our sales and marketing initiatives;
(3) the advancement of new functions within our existing series to further enhance marketing efficiency
with more targeted distribution; and (4) continual collaboration with existing distributors. We will also
benefit from enhanced economies of scale, as our general and administrative expenses will remain
relatively stable in relation to revenue. This stability will contribute to a stronger financial position,
ultimately supporting our path to profitability. See “—Growth Strategies” for details of measures to
further fortify our sales network and expand our product offering and ecosystem.
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OVERVIEW
As of the Latest Practicable Date, Mr. Liu controlled 31.08% of the voting power at the general
meetings of our Company, comprising (1) 26.62% beneficially owned by him directly, (2) 3.50%
beneficially owned by Yuejiang LP, which is controlled by Mr. Liu as its general partner, and (3) 0.96%
beneficially owned by Qinmo LP, which is controlled by Mr. Liu as its general partner. Upon the Listing,
Mr. Liu will control 27.97% of the voting power at the general meetings of our Company, comprising (i)
23.96% beneficially owned by him directly, (ii) 3.15% beneficially owned by Yuejiang LP, and (iii) 0.86%
beneficially owned by Qinmo LP, assuming the Over-allotment Option is not exercised. Therefore, Mr.
Liu, Yuejiang LP and Qinmo LP were a group of our Controlling Shareholders as of the Latest Practicable
Date and will be our single largest group of Shareholders upon the Listing. Yuejiang LP is a share
incentive platform of our Company and Qinmo LP is a shareholding platform of our certain financial
investors.
NO COMPETITION AND CLEAR DELINEATION OF BUSINESS
Our Controlling Shareholders have confirmed that as of the Latest Practicable Date, none of them or
any of their respective close associates had any interest in a business that competes or is likely to
compete, either directly or indirectly, with our business, which is subject to disclosure pursuant to Rule
8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Management Independence
Our business is primarily managed and conducted by our Board and senior management. Upon the
completion of the Listing, our Board will comprise of three executive Directors, one non-executive
Director and three independent non-executive Directors. Our Company has also established a Supervisors
Committee, comprising three Supervisors. See “Directors, Supervisors and Senior Management” for
more information.
Our Directors believe that our Board and senior management is able to manage our business and
function independently from our Controlling Shareholders based on the following reasons:
(1) each of our Directors is aware of his/her fiduciary duties as a Director of our Company which
require, among other things, that he/she acts for the benefit and in the best interests of our
Company and does not allow any conflict between his/her duties as a Director and his/her
personal interest;
(2) in the event that there is a potential conflict of interest arising out of any transaction to be
entered into between our Group and our Directors or their respective associates, the interested
Directors shall abstain from voting at the relevant board meetings of our Company in respect of
such transactions and shall not be counted in the quorum;
(3) we have three independent non-executive Directors, who have extensive experience in
different areas and have been appointed to ensure that the decisions of our Board are made after
due consideration of independent and impartial opinions. Certain matters of our Company
must always be referred to the independent non-executive Directors for review in accordance
with the Listing Rules, the applicable laws and our Articles of Association and internal
policies;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(4) our daily management and operations are carried out by our senior management team. Except
Mr. Liu himself, our senior management team members are independent from our Controlling
Shareholders, 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 interest of
our Group;
(5) we have established a Supervisors Committee comprising three Supervisors who are
independent from our Controlling Shareholders. Our Supervisors shall be responsible for the
supervision of performance of our Directors and the senior management team, including
monitoring any acts of a Director or senior management member which may be detrimental to
the interests of our Company; and
(6) we have adopted a series of corporate governance measures to manage conflicts of interest, if
any, between our Group and our Controlling Shareholders which would support our
independent management. See “—Corporate Governance.”
Operation Independence
We have established our own organizational structure comprised of individual departments, each
with specific areas of responsibilities. We have also established various internal controls procedures to
facilitate the effective operation of our business. Our Group is not operationally dependent on our
Controlling Shareholders. Our Company (through our subsidiaries) holds or enjoys the benefit of all
relevant licenses and owns all relevant intellectual property and R&D facilities necessary to carry on our
business. We have sufficient capital, facilities, equipment and employees to operate our business
independently from our Controlling Shareholders. We also have independent access to our customers and
suppliers.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of our Controlling Shareholder Group and their close associates.
Financial Independence
We have an independent financial system. Our Group’s accounting and finance functions are
independent of our Controlling Shareholders and their close associates. Our Group makes financial
decisions according to our own business needs. Our Group’s major finance operations are handled by our
financial management department, which operates independently from our Controlling Shareholders and
their close associates. We do not share any other functions or resources with any of our Controlling
Shareholders or their close associates.
During the Track Record Period, we primarily financed our business operations through cash
generated from our business activities and equity financing activities. As of the Latest Practicable Date,
we did not have any outstanding borrowings or guarantees from our Controlling Shareholders or any of
their respective close associates.
Based on the above, our Directors believe that our Group is able to operate with financial
independence from our Controlling Shareholders and their close associates.
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CORPORATE GOVERNANCE
We have put in place sufficient corporate governance measures to manage the conflict of interest and
potential competition from our Controlling Shareholders and safeguard the interest of our Shareholders,
including:
(1) where a Shareholders’ meeting is to be held for considering proposed transactions in which our
Controlling Shareholders or any of their close associates has a material interest, our
Controlling Shareholders will not vote on the resolutions and shall not be counted in the
quorum in the voting;
(2) our Company has established internal control mechanism to identify connected transactions.
After the Listing, our Company will comply with the requirements in connection with
connected transactions under the Listing Rules;
(3) where our Directors reasonably request the advice of independent professionals, such as
independent financial advisors, the appointment of such independent professional will be
made at our Company’s expense;
(4) we have appointed Guotai Junan Capital Limited as our compliance advisor to provide advice
and guidance to us in respect of compliance with the applicable laws and regulations, as well as
the Listing Rules, including various requirements relating to corporate governance;
(5) we have established the audit committee, remuneration and appraisal committee and
nomination committee with written terms of reference in compliance with the Listing Rules
and the Corporate Governance Code;
(6) our Controlling Shareholders will confirm the status of their non-competing interest on an
annual basis and to provide all information necessary, including all relevant financial,
operational and market information and any other necessary information as required by our
Company; and
(7) our Company will disclose decisions (with basis), if any, on matters reviewed by the
independent non-executive Directors either in its annual report or by way of announcements.
Our Directors consider that the above corporate governance measures are sufficient to manage any
potential conflict of interests between our Controlling Shareholders and their respective close associates
and our Group and to protect the interests of our Shareholders, in particular, the minority Shareholders.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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OVERVIEW
Upon the Listing, the Board will consist of seven Directors, including three executive Directors, one
non-executive Director and three independent non-executive Directors. The Board is responsible, and has
general authority for, the management and operation of the Company. Our Directors are appointed for a
term of three years and are eligible for re-election upon expiry of their term of office.
Our Supervisory Committee consists of three Supervisors. Supervisors serve for a term of three
years and shall be subject to re-election upon expiry of the term of office.
Our senior management is responsible for the day-to-day operations of the Company.
All of the Directors, Supervisors and senior management have met the qualification requirements
under the relevant PRC laws and regulations and the Listing Rules for their respective positions.
BOARD OF DIRECTORS
The following table sets forth certain information regarding the members of our Board.
Name Age Position
Date of joining
our Group
Date of
appointment as a
Director Responsibility
Relationship with
other Directors,
Supervisors and
senior management
Executive Directors
Mr. Liu Peichao
(ᄎ੃൴) ..........
38 Chairman of the
Board, executive
Director and
general manager
July 2015 July 2015 Responsible for the overall
strategic planning,
business direction and
management of our Group
N/A
Mr. Wang Yong
(ۇ...........)
44 Executive Director,
chief financial
officer, Board
secretary and joint
company secretary
August
2022
December
2022
Responsible for the overall
strategic planning, Board
and capital market,
financial and accounting
affairs of our Group
N/A
Mr. Lang Xulin
(؍..........)
36 Executive Director
and chief scientist
July 2015 September
2016
Responsible for the overall
strategic planning,
business direction, R&D
and management of our
Group
N/A
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Name Age Position
Date of joining
our Group
Date of
appointment as a
Director Responsibility
Relationship with
other Directors,
Supervisors and
senior management
Non-executive Director
Mr. Jing Liang
(ڥ...........)
44 Non-executive
Director
April 2020 April 2020 Responsible for providing
guidance on overall
strategic planning,
corporate governance and
business direction of our
Group
N/A
Independent non-executive Directors
Mr. Li Yibin
(ҽ൪ⅳ) ..........
64 Independent
non-executive
Director
December
2022
December
2022
Responsible for providing
independent advice on the
operations and
management of our Group
N/A
Mr. Ng Jack
Ho Wan
(юखථ) ..........
48 Independent
non-executive
Director
May 2024 May 2024 Responsible for providing
independent advice on the
operations and
management of our Group
N/A
Dr. Hou Lingling
(ޛޛڨ..........)
49 Independent
non-executive
Director
December
2022
December
2022
Responsible for providing
independent advice on the
operations and
management of our Group
N/A
Executive Directors
Mr . Liu Peichao ( ᄎ੃൴ ), aged 38, is our chairman of the Board, executive Director and general
manager of our Company, and was appointed as an executive Director and general manager of our
Company in July 2015. Mr. Liu is primarily responsible for the overall strategic planning, business
direction and management of our Group. Mr. Liu has also served as a director in certain subsidiaries of
our Company.
Mr. Liu has nine years of experience in the robot industry.
Mr. Liu was awarded the Shenzhen New Industry Leader (ϋ ) by the Shenzhen
General Chamber of Commerce ( ଉέ̹ʈਠุᑌΥึᐼਠึ) in September 2022, the China Youth
Entrepreneurship Award (ϋ௴ุᆤ ) by the Ministry of Human Resources and Social Security of
the People’s Republic of China (ღ௅ ) in November 2021 and the
Shenzhen Municipal Leading Talent (ɛʑ ) by the Shenzhen Municipal Government
in July 2020. He was selected as one of the 2019 Shenzhen Top 10 Small and Medium-sized Enterprise
Entrepreneurial Talents by the Shenzhen Small and Medium-sized Enterprises Development Promotion
Association (ආึ ) in November 2019, and the Technological Innovation and
Entrepreneurial Talents of the Innovation Talent Advancement Program (Ҧ௴อ௴
ุɛʑ) by the Ministry of Science and Technology of the People’s Republic of China ( ʕശɛ͏΍ձ਷
ኪҦஔ௅ ) in June 2019.
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Mr. Liu obtained a bachelor’s degree in mechanical design & manufacturing and automation from
Shandong University (ɽኪ ) in the PRC in June 2011. Mr. Liu further obtained a master’s degree in
mechanical engineering from Shandong University in June 2014.
Mr . Wang Y ong (ۇ)aged 44, is our executive Director, chief financial officer, Board secretary
and joint company secretary. Mr. Wang joined our Company in August 2022 and was appointed as an
executive Director in December 2022. Mr. Wang is primarily responsible for the overall strategic
planning, Board and capital market, financial and accounting affairs of our Group.
Mr. Wang has more than 22 years of experience in corporate governance and finance. Prior to
joining our Company, from October 2014 to August 2021, Mr. Wang successively served as a vice general
manager, board secretary and chief financial officer in Antel Intelligent Technology Corp., Ltd. ( ଉέ̹
ʮ̡ ), whose shares are listed on the Shanghai Stock Exchange (stock code: 688208).
From September 2002 to September 2014, Mr. Wang successively served as an auditor, senior auditor,
manager and senior manager in Ernst & Young Hua Ming LLP (౷ஷΥྫ).
During his employment in Ernst & Young Hua Ming LLP, from October 2007 to March 2009, Mr. Wang
participated in Ernst & Young’s global exchange program and worked at Ernst & Young’s Milwaukee
office in the United States. From July 2001 to September 2002, Mr. Wang served as a financial accountant
in Shenzhen SDG Information Co., Ltd. (ʮ̡ ), whose shares are listed on the
Shenzhen Stock Exchange (stock code: 000070).
Mr. Wang obtained a bachelor’s degree in investment economics from Southwestern University of
Finance and Economics (ৌ຾ɽኪ ) in July 2001.
Mr . Lang Xulin (؍) aged 36, is our executive Director and chief scientist. Mr. Lang joined
our Company in July 2015 and was appointed as an executive Director in September 2016. Mr. Lang is
primarily responsible for the overall strategic planning, business direction, R&D and management of our
Group. Mr. Lang has also served as a director in certain subsidiaries of our Company.
Mr. Lang has more than nine years of experience in the robot industry. Prior to founding our
Company with Mr. Liu, from July 2014 to July 2015, Mr. Lang served as an engineer in Shenzhen
Inovance Technology Co., Ltd. (ʮ̡ ), whose shares are listed on the Shenzhen
Stock Exchange (stock code: 300124).
Mr. Lang obtained a bachelor’s degree in mechanical design & manufacturing and automation from
Shandong University in the PRC in June 2011. Mr. Lang obtained a master’s degree in mechanical design
and theories from Shandong University in June 2014.
Non-executive Director
Mr . Jing Liang (ڥ)aged 44, is a non-executive Director. Mr. Jing was assigned by Qianhai
Equity to join our Company as a non-executive Director in April 2020. Mr. Jing is primarily responsible
for providing guidance on overall strategic planning, corporate governance and business direction of our
Group.
Mr. Jing has worked in Qianhai Fangzhou Asset Management Co., Ltd. (ʮ
̡), Shenzhen Oriental Fortune Capital Co., Ltd. (ʮ̡ ) and China
Southern Asset Management Co., Ltd. (ʮ̡ ).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Jing obtained a master’s degree in finance and management from Loughborough University in
England, the United Kingdom in December 2009.
Prior to May 2022, Mr. Jing had once served as the general partner of Shenzhen Yifu Equity
Investment Partnership (Limited Partnership) (Υྫ) (“Shenzhen
Yifu”), a fund established in the form of limited partnership established in the PRC on January 11, 2013,
whose business license was revoked in May 2022. The business license of Shenzhen Yifu was revoked as
it failed to conduct the annual inspection in a timely manner in accordance with the applicable PRC laws
as a result of its lack of substantial operation since establishment, in light of the background that the fund
had not received sufficient capital as originally planned to be injected by its limited partners. Mr. Jing
confirmed that (i) Shenzhen Yifu was solvent immediately prior to the revocation of business license; (ii)
there was no wrongful act on his part leading to the revocation of business license of Shenzhen Yifu; (iii)
he is not aware of any actual or potential claim which has been or could potentially be made against him
as a result of the revocation of business license of Shenzhen Yifu; and (iv) no misconduct or misfeasance
had been involved on his part in the revocation of business license of Shenzhen Yifu.
Independent Non-executive Directors
Mr . Li Yibin ( ҽ൪ⅳ ), aged 64, is an independent non-executive Director. Mr. Li joined our
Company in December 2022 and was appointed as an independent non-executive Director in December
2022. Mr. Li is primarily responsible for providing independent advice on the operations and
management of our Group.
Mr. Li has served as (i) an independent director in Siasun Robot & Automation Co., Ltd. (ؒ
ʮ̡ ), a limited liability company engaging in robotics and automation
equipment, whose shares are listed on the Shenzhen Stock Exchange (stock code: 300024), since January
2022, (ii) an independent director in CITIC Heavy Industries Co. Ltd. (ʮ̡ ), a
limited liability company engaging in heavy mechanical equipment business, whose shares are listed on
the Shanghai Stock Exchange (stock code: 601608), since November 2020, (iii) the chairman of the
supervisory committee in Shandong Desheng Robot Co., Ltd. (ʮ̡ ), a limited
liability company engaging in intelligent equipment and systems business, since June 2018, and (iv) a
supervisor in Shandong Youbaote Intelligent Robotics Co., Ltd. (ʮ̡ ), a
limited liability company engaging in bionic family service robots and mine informatization business,
since January 2014. From September 2019 to February 2023, Mr. Li served as an independent director in
Cosonic Intelligent Technologies Co., Ltd. (ʮ̡ ), a limited liability company
engaging in smart electroacoustic products and smart wearable products business whose shares are listed
on the Shenzhen Stock Exchange (stock code: 300793). Furthermore, Mr. Li has served as a professor in
Shandong University since September 2003. Prior to that, from August 1982 to July 2003, Mr. Li
successively served as a lecturer, vice professor and professor in Shandong University of Science and
Technology (Ҧɽኪ ) (formerly known as the Shandong Institute of Mining and Technology (؇
ᘤุኪ৫ )).
Mr. Li has been serving as the president of the council of Shandong Automation Society (І
ਗʷኪึ ) since July 2018.
Mr. Li obtained a bachelor’s degree in industrial automation from Tianjin University (ɽኪ )i n
the PRC in July 1982. Mr. Li obtained a master’s degree in mining electrification and automation from
Shandong University of Science and Technology (Ҧɽኪ ) (formerly known as the Shandong
Institute of Mining and Technology (ᘤุኪ৫ )) in July 1990.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Li had once served as the vice chairman of the board of directors of Shandong Anhua
Intelligence Technology Co., Ltd. (ʮ̡ ) (“Anhua Intelligence”) from
March 2009 to January 2013. The business license of Anhua Intelligence was revoked in January 2013, as
Anhua Intelligence failed to conduct the annual inspection in a timely manner in accordance with the
applicable PRC laws as a result of its lack of substantial operation since establishment. Mr. Li confirmed
that (1) Anhua Intelligence was solvent immediately prior to the revocation of business license; (2) there
was no wrongful act on his part leading to the revocation of business license of Anhua Intelligence; (3) he
is not aware of any actual or potential claim which has been or could potentially be made against him as
a result of the revocation of business license of Anhua Intelligence; and (4) no misconduct or misfeasance
had been involved on his part in the revocation of business license of Anhua Intelligence.
Mr . Ng Jack Ho Wan ( юखථ ), whose former name was Mr. Ng Ho Wan ( юखථ), aged 48, is an
independent non-executive Director. Mr. Ng joined our Company in May 2024 and was appointed as an
independent non-executive Director in May 2024. Mr. Ng is primarily responsible for providing
independent advice on the operations and management of our Group.
Mr. Ng has served as (1) an independent non-executive director in Cheshi Technology Inc. (߅
ʮ̡ ), whose shares are listed on the Stock Exchange (stock code: 1490), since December 2020,
(2) an independent non-executive director in HM International Holdings Limited, whose shares are listed
on the Stock Exchange (stock code: 8416), since December 2016, and (3) the managing director in Jack
H.W. Ng CPA Limited (ʮ̡ ) since June 2013. Prior to that, from June 2018 to July
2021, Mr. Ng served as an independent non-executive director in Zhejiang Cangnan Instrument Group
Company Limited (ʮ̡ ), whose shares were previously listed on the Stock
Exchange. From March 2001 to October 2012, Mr. Ng worked in KPMG in Hong Kong with the last
position as partner. From September 1997 to February 2001, Mr. Ng worked in PricewaterhouseCoopers
LLP in Canada.
Mr. Ng obtained a bachelor’s degree in business administration from Simon Fraser University in
Canada in May 2000. In addition, Mr. Ng has obtained the qualification of (1) Chartered Financial
Analyst (CFA) accredited by CFA Institute since September 2007, (2) Certified Information Systems
Auditor accredited by the Information Systems Audit and Control Association since January 2007, (3)
Financial Risk Manager accredited by the Global Association of Risk Professionals since November
2004, (4) Certified Public Accountant of Hong Kong Institute of Certified Public Accountants since
September 2003, and (5) Chartered Professional Accountant (CPA, CA) accredited by the Chartered
Professional Accountants of Canada since February 2001.
Dr . Hou Lingling (ޛޛڨ) aged 49, is an independent non-executive Director. Dr. Hou joined our
Company in December 2022 and was appointed as an independent non-executive Director in December
2022. Dr. Hou is primarily responsible for providing independent advice on the operations and
management of our Group.
Dr. Hou has served as an arbitrator of Dongguan Arbitration Commission (ึ ) since
April 2022 and Shenzhen Court of International Arbitration ( ଉέ਷ყ΀൒৫ ) (also known as South
China International Economics and Trade Arbitration Commission (ึ ),
Greater Bay Area International Arbitration Centre ( ຽಥዦɽᝄਜ਷ყ΀൒ʕː ) and Shenzhen
Arbitration Commission (ึ )) since February 2019. Dr. Hou has successively served as an
associate professor and professor in the Law School of Shenzhen University (ኪ৫ ). Prior to
that, Dr. Hou served as a lecturer in the Law School of South China University of Technology (ଣʈ
ኪ৫ ) from September 2006 to August 2009 and the Law School of Zhongnan University of
Economics and Law (ኪ৫ ).
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Dr. Hou obtained a bachelor’s degree in economic law from Zhongnan University of Economics and
Law (ɽኪ) (formerly known as Zhongnan Institute of Economics and Law (ኪ৫))
in the PRC in June 1997 and a master’s degree in economic law from Zhongnan University of Economics
and Law in June 2000. Dr. Hou also obtained a doctor’s degree in international trade from Hunan
University (ɽኪ ) in June 2006.
SUPERVISORS
The following table sets forth general information regarding the Supervisors of our Company:
Name Age Position
Date of joining
our Group
Date of
appointment as a
Supervisor Responsibility
Relationship with
other Directors,
Supervisors and
senior management
Ms. Wan Ying
(ຬ጑) ...........
36 Chairlady of the
Supervisory
Committee
March 2017 January 2021 Supervising the performance
of duties by our Directors
and members of the
senior management of our
Group
N/A
Mr. Li Liuwei
(ҽᄎਃ) ..........
42 Supervisor and
quality and
business
operations director
July 2017 January 2021 Supervising the performance
of duties by our Directors
and members of the
senior management of our
Group
N/A
Ms. Ma Jingxian
(৵᎑ᄫ) ..........
40 Supervisor May 2023 May 2023 Supervising the performance
of duties by our Directors
and members of the
senior management of our
Group
N/A
Ms. Wan Ying ( ຬ጑), whose former name was Ms. Wan Suping ( ຬᘽറ ), aged 36, is the
administrative manager and the chairlady of the Supervisory Committee. Ms. Wan joined our Company in
March 2017 as an administrative supervisor and was appointed as the chairlady of the Supervisory
Committee in January 2021. Ms. Wan is responsible for supervising the performance of duties by our
Directors and members of the senior management of our Group.
Prior to joining our Company, from March 2014 to March 2017, Ms. Wan served as a human
resource and administrative supervisor in Ningbo Zhongsheng Information Technology Co., Ltd. (ʕ
ʮ̡ ).
Ms. Wan obtained college diploma in administrative management from Wuhan University (ဏɽ
ኪ) in the PRC in December 2012. Ms. Wan also obtained a bachelor’s degree in human resource
management from Shandong University in June 2021.
Mr . Li Liuwei ( ҽᄎਃ ), aged 42, is the quality and business operations director, and a Supervisor
of our Company. Mr. Li joined our Company in July 2017 and was appointed as a Supervisor in January
2021. Mr. Li is responsible for supervising the performance of duties by our Directors and members of the
senior management of our Group. In addition, Mr. Li is a supervisor of one of our subsidiaries.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Prior to joining our Company, from May 2013 to July 2017, Mr. Li served as a commercial manager
of global sales business platforms in Shenzhen Gongjin Electronics Co., Ltd. (ࠢ
ʮ̡), a limited liability company engaging in the research, development, manufacturing and sales of
communication products, advanced mobile communication equipment and application products, whose
shares are listed on the Shanghai Stock Exchange (stock code: 603118). From March 2011 to May 2013,
Mr. Li served as a quality control supervisor in Siemens Shenzhen Magnetic Resonance Co., Ltd. (ɿ
ʮ̡ ), a limited liability company engaging in the R&D and production of MRI
systems, angiography systems and medical electronic components. From March 2005 to March 2011, Mr.
Li served as a quality supervisor in Epson Engineering (Shenzhen) Ltd. (ʮ̡ ).
Mr. Li obtained a bachelor’s degree in electronic information engineering from Hubei University of
Technology ( ಳ̏ʈุɽኪ ) in June 2004.
Ms. Ma Jingxian ( ৵᎑ᄫ ), aged 40, is a Supervisor of our Company. Ms. Ma was assigned by
Internet Investment to join our Company as a Supervisor in May 2023. Ms. Ma is responsible for
supervising the performance of duties by our Directors and members of the senior management of our
Group.
Ms. Ma has served as a supervisor in SEMI-TECH Co., Ltd. (ʮ̡ ), a
limited liability company engaging in Internet information service business since May 2023, and a
director in Luculent Smart Technologies Co., Ltd. (ʮ̡ ), a limited liability
company engaging in software development, system integration, management consulting and Internet
information service business since January 2021. In addition, Ms. Ma has served as an investment
manager in China Internet Investment Fund (Limited Partnership) since November 2017. She had once
worked in Skandia-BSM Life Insurance Company Ltd. (ʮ̡ ), Three Gorges Capital
Holdings Co., Ltd. (ப΂ʮ̡ ), and PricewaterhouseCoopers LLP.
Ms. Ma obtained a bachelor’s degree in accounting from Hohai University (ऎ
ɽኪ) in the PRC in June 2006 and a master’s degree in accounting from Beijing Jiaotong University ( ̏
ԯʹஷɽኪ ) in the PRC in July 2008.
SENIOR MANAGEMENT
Mr . Liu Peichao ( ᄎ੃൴ ), aged 38, is our chairman of the Board, executive Director and general
manager of our Company. See “—Board of Directors—Executive Directors” for his biographical details.
Mr . Wang Y ong (ۇ)aged 44, is our executive Director, chief financial officer, Board secretary
and joint company secretary. See “—Board of Directors—Executive Directors” for his biographical
details.
Mr . Liu Zhufu ( ᄎ˴၅ ), aged 36, is our deputy general manager. Mr. Liu Zhufu joined our
Company in December 2015 and successively served as the R&D director, industry development director
and general manager of industrial department. Mr. Liu Zhufu is responsible for the management of the
domestic industrial department.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 283 ---
Prior to joining us, Mr. Liu Zhufu served as a control algorithm engineer in Hedy Medical Device
Company Limited (ʮ̡ ), a limited liability company engaging in the medical
equipment business. Mr. Liu Zhufu also worked in Guangzhou ZHIYUAN Electronics Co., Ltd. (ߧ
ʮ̡ ), an industrial Internet product and solution provider.
Mr. Liu Zhufu obtained a bachelor’s degree in automation from Shandong University in June 2011.
Mr . Jiang Yu (ρ), whose former name was Mr. Jiang Erlei (ɚཤ), aged 40, is our deputy
general manager. Mr. Jiang joined our Company in August 2017 and successively served as a deputy R&D
director, supply chain director and R&D director. Mr. Jiang is responsible for the management of the
R&D department and procurement department.
Prior to joining us, from July 2012 to August 2017, Mr. Jiang successively served as a hardware
engineer, project manager, product manager and senior hardware engineer in Shanghai STEP Electric
Corporation (ʮ̡ ), a limited liability company engaging in the provision of
comprehensive solutions for intelligent manufacturing, whose shares are listed on the Shenzhen Stock
Exchange (stock code: 002527).
Mr. Jiang obtained a bachelor’s degree in mechanical design, manufacturing and automation from
Hunan University of Technology (ʈุɽኪ ) in the PRC in June 2009 and a master’s degree in
mechanical engineering from Shandong University in June 2012.
Save as disclosed above, each of our Directors, Supervisors and senior management members
confirms with respect to himself or herself that (1) he or she had no other relationship with any Director,
Supervisor, senior management or substantial Shareholder of our Company as at the Latest Practicable
Date; (2) he or she did not hold any other directorships in the three years prior to the Latest Practicable
Date in any public companies of which the securities are listed on any stock exchange in Hong Kong
and/or overseas; and (3) there are no other matters concerning our Directors’ and Supervisors’
appointment that need to be brought to the attention of our Shareholders and the Stock Exchange or shall
be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.
JOINT COMPANY SECRETARIES
Mr . Wang Y ong (ۇ)aged 44, is our executive Director, chief financial officer, Board secretary
and joint company secretary. See “—Board of Directors—Executive Directors” for his biographical
details.
Ms. Ching Shuk Wah Shirley ( ೻ૺശ ), aged 51, is our joint company secretary.
Ms. Ching joined SWCS Corporate Services Group (Hong Kong) Limited (“SWCS”), a corporate
service provider, in January 2020 and is currently an assistant manager of SWCS, responsible for
assisting in providing company secretarial services.
Ms. Ching obtained a bachelor’s degree in business administration from the University of Western
Sydney in Australia in November 2004 and a master degree in corporate governance from the Hong Kong
Metropolitan University (formerly known as The Open University of Hong Kong) in November 2020. Ms.
Ching is a Chartered Secretary and a Chartered Governance Professional of The Chartered Governance
Institute in the United Kingdom. Ms. Ching is also an Associate of The Hong Kong Institute of Chartered
Secretaries.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 284 ---
BOARD COMMITTEES
The Company has established four committees under the Board of Directors, namely the Audit
Committee, the Remuneration and Appraisal Committee, the Nomination Committee and the Strategy
Committee.
Audit Committee
The Audit Committee consists of three Directors, namely Mr. Ng Jack Ho Wan, Mr. Li Yibin and Mr.
Jing Liang, with Mr. Ng Jack Ho Wan currently serving as the chairman. Mr. Ng Jack Ho Wan has the
appropriate professional qualification and experiences as required under Rules 3.10(2) and 3.21 of the
Listing Rules. The Audit Committee is mainly responsible for reviewing and overseeing the financial
reporting procedure, risk management and internal control system of our Group and has the terms of
reference in compliance with the relevant PRC laws and regulations and Rule 3.21 of the Listing Rules
and paragraph D.3 of part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing
Rules.
Remuneration and Appraisal Committee
The Remuneration and Appraisal Committee consists of three Directors, namely Mr. Li Yibin, Dr.
Hou Lingling and Mr. Wang Yong, with Mr. Li Yibin currently serving as the chairman. The Remuneration
and Appraisal Committee is mainly responsible for evaluating the remuneration polices for Directors,
Supervisors and senior management of our Group and making recommendations thereon to the Board of
Directors and has the terms of reference in compliance with relevant laws and regulations of the PRC and
paragraph E.1 of part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules.
Nomination Committee
The Nomination Committee consists of three Directors, namely Dr. Hou Lingling, Mr. Ng Jack Ho
Wan and Mr. Lang Xulin, with Dr. Hou Lingling currently serving as the chairlady. The Nomination
Committee is mainly responsible for identifying, screening and recommending to the Board of Directors
qualified candidates to serve as the Directors, Supervisors and senior management and monitoring the
procedures for evaluating the performance of the Board of Directors and has the terms of reference in
compliance with the relevant laws and regulations of the PRC and paragraph B.3 of part 2 of the
Corporate Governance Code as set out in Appendix C1 to the Listing Rules.
Strategy Committee
The Strategy Committee consists of three Directors, namely Mr. Liu, Mr. Li Yibin and Mr. Wang
Yong, with Mr. Liu serving as the chairman. The Strategy Committee is mainly responsible for
researching and recommending the development strategy and capital operation of our Company to the
Board of Directors and has the terms of reference in compliance with the relevant PRC laws and
regulations.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 285 ---
DIVERSITY POLICY OF THE BOARD OF DIRECTORS
The Board of Directors has adopted a board diversity policy (the “Board Diversity Policy”) in order
to enhance the effectiveness of our Board of Directors and to maintain high standard of corporate
governance. The Board Diversity Policy sets out the criteria in selecting candidates to our Board of
Directors, 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 our Board of Directors.
Our Directors have a balanced mixed of knowledge and skills, including but not limited to overall
business management, finance and accounting, robot technology and law. The Board of Directors is of the
view that our Board of Directors satisfies the Board Diversity Policy. In addition, our Board of Directors
has a wide range of age, ranging from 36 years old to 64 years old. One of our Directors is female. Our
Board of Directors will also ensure that appropriate balance of gender diversity is achieved with
reference to investors’ expectation, and international and local recommended best practices.
The Nomination Committee is responsible for reviewing the diversity of the Board of Directors.
After Listing, the Nomination Committee will monitor and evaluate the implementation of the Board
Diversity Policy from time to time to ensure its continued effectiveness. 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.
CORPORATE GOVERNANCE
Our Directors recognize the importance of good corporate governance in management and internal
procedures so as to achieve effective accountability. Save as disclosed below, our Group is expected to
comply with the code provisions of the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules.
Pursuant to code provision C.2.1 of Part 2 of the Corporate Governance Code, companies listed on
the Stock Exchange are expected to comply with, but may choose to deviate from the requirement that the
roles of chairman and chief executive should be separate and should not be performed by the same
individual. We do not have a separate chairman and chief executive and Mr. Liu currently performs these
two roles. Our Board believes that vesting the roles of both the chairman of our Board and general
manager in the same person has the benefit of (1) ensuring consistent leadership within our Company, (2)
enabling more effective and efficient overall strategic planning for our Company, and (3) facilitating the
flow of information between the management and our Board. Our Board considers that the balance of
power and authority for the present arrangement will not be impaired and this structure will enable our
Company to make and implement decisions promptly and effectively. Our Board will continue to review
and consider splitting the roles of the chairman of our Board and the general manager of our Company at
a time when it is appropriate by taking into account the circumstances of our Company as a whole.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 286 ---
COMPENSATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
The compensation and remuneration of the Directors, Supervisors and members of the senior
management of the Company are determined by the Shareholders’ meetings and the Board of Directors as
appropriate in the form of salaries and bonuses. The Company also reimburses them for expenses which
are necessary and reasonably incurred in providing services to the Company or discharging their duties in
relation to the operations of the Company. When reviewing and determining the specific remuneration
packages for our Directors, Supervisors and members of the senior management of the Company, the
Shareholders’ meetings and the Board of Directors take into account factors such as salaries paid by
comparable companies, time commitment, level of responsibilities, employment elsewhere in our Group
and desirability of performance-based remuneration. As required by the relevant PRC laws and
regulations, the Company also participates in various defined contribution plans organized by relevant
provincial and municipal government authorities and welfare schemes for employees of the Company,
including medical insurance, injury insurance, unemployment insurance, pension insurance, maternity
insurance and housing provident fund.
The Company offers executive Directors and senior management members, who are our employees,
compensation in the form of salaries, bonuses, social security plans, housing provident fund plans and
other benefits. The independent non-executive Directors receive compensation based on their
responsibilities.
The aggregate amounts of remuneration (including fees, salaries, contribution to pension schemes,
housing allowances, other allowances and benefits-in-kind and discretionary bonuses and excluding
share-based payment) paid to the Directors and Supervisors for the three years ended December 31, 2021,
2022 and 2023 and the six months ended June 30, 2024, were RMB2.2 million, RMB3.1 million, RMB3.7
million and RMB1.8 million, respectively.
The aggregate amounts of remuneration (including fees, salaries, contribution to pension schemes,
housing allowances, other allowances and benefits-in-kind and discretionary bonuses and excluding
share-based payment) paid to the five highest paid individuals, excluding Directors and chief executive,
for the three years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024,
were RMB2.7 million, RMB2.4 million, RMB2.8 million and RMB1.3 million, respectively.
It is estimated that remuneration equivalent to approximately RMB4.7 million in aggregate will be
paid to the Directors and Supervisors by the Company for the year ending December 31, 2024, based on
the arrangements in force as of the date of the prospectus.
No remuneration was paid by the Company to the Directors or the five highest paid individuals as
inducement to join or upon joining the Company or as a compensation for loss of office during the Track
Record Period. Furthermore, none of the Directors had waived or agreed to waive any remuneration
during the Track Record Period.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 287 ---
COMPLIANCE ADVISOR
The Company appointed Guotai Junan Capital Limited as the compliance advisor pursuant to Rules
3A.19 of the Listing Rules, and the compliance advisor will advise the Company 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 share issues and share repurchases;
(iii) where the Company proposes to use the proceeds of the Global Offering in a manner that is
different from that detailed in this prospectus or where our business activities, developments or
results deviate from any forecasts, estimates or other information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry of the Company regarding unusual movements in
the price or trading volume of the Shares, the possible development of a false market in the
Shares or any other matters.
The terms of the appointment of the compliance advisor will commence on the Listing Date and end
on the date when the Company distributes the annual report of its financial results for the first full
financial year commencing after the Listing Date.
CORE R&D TEAM MEMBERS
For further details of the experience of our core R&D team members, see “Business—Research and
Development—Our Research and Development Team and Core Members” in this prospectus.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Each of our Directors confirms that, as of the Latest Practicable Date, he or she did not have any
interest in any 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.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (1) has obtained the legal advice referred to under Rule
3.09D of the Listing Rules on May 31, 2024; and (2) understands his or her obligations as a director of a
listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors confirms (1) his/her independence as regards each
of the factors referred to in Rule 3.13(1) to (8) of the Listing Rules; (2) that he/she has no past or present
financial or other interest in the business of our Company or our subsidiaries or any connection with any
core connected person of our Company under the Listing Rules as of the Latest Practicable Date; and (3)
that there are no other factors that may affect his/her independence at the time of his/her appointment.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 288 ---
This section presents certain information regarding our share capital prior to and following the
completion of the Global Offering and the Conversion of Domestic Shares into H Shares.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date and immediately prior to the Global Offering and the Conversion
of Domestic Shares into H Shares, the registered and issued share capital of our Company was
RMB360,000,000, comprising 360,000,000 Domestic Shares with a nominal value of RMB1.00 each.
UPON COMPLETION OF THE GLOBAL OFFERING AND THE CONVERSION OF DOMESTIC
SHARES INTO H SHARES
Immediately following completion of the Global Offering and the Conversion of Domestic Shares
into H Shares, assuming that the Over-allotment Option is not exercised, the registered and issued share
capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate percentage of
the enlarged issued share
capital after the Global
Offering
Domestic Shares ........................ 46,156,853 11.54%
H Shares converted from
Domestic Shares ...................... 313,843,147 78.46%
H Shares to be issued under
the Global Offering .................... 40,000,000 10.00%
Total .................................. 400,000,000 100.00%
See “— Conversion of Domestic Shares into H Shares” below for details of the identities of our Shareholders whose Shares
will remain as Domestic Shares and whose Shares will be converted into H Shares upon Listing.
Immediately following completion of the Global Offering and the Conversion of Domestic Shares
into H Shares, assuming that the Over-allotment Option is fully exercised, our registered and issued share
capital will be as follows:
Description of Shares Number of Shares
Approximate percentage of
the enlarged issued share
capital after the Global
Offering
Domestic Shares ........................ 46,156,853 11.37%
H Shares converted from
Domestic Shares ...................... 313,843,147 77.30%
H Shares to be issued under
the Global Offering .................... 46,000,000 11.33%
Total .................................. 406,000,000 100.00%
See “— Conversion of Domestic Shares into H Shares” below for details of the identities of our Shareholders whose Shares
will remain as Domestic Shares and whose Shares will be converted into H Shares upon Listing.
SHARE CAPITAL
– 279 –


--- page 289 ---
OUR SHARES
Upon completion of the Global Offering and the Conversion of Domestic Shares into H Shares, the
Shares will consist of Domestic Shares and H Shares. Domestic 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 and the Shenzhen-
Hong Kong Stock Connect and other persons who are entitled to hold our H Shares pursuant to relevant
PRC laws and regulations or upon approvals of any competent authorities, H Shares generally cannot be
subscribed for by or traded between legal or natural PRC persons. Domestic Shares can only be
subscribed for by and traded between legal or natural PRC persons, qualified foreign institutional
investors and foreign strategic investors. H Shares may only be subscribed for and traded in Hong Kong
dollars. Domestic Shares, on the other hand, may only be subscribed for and transferred in Renminbi.
Domestic Shares and H Shares are regarded as one class of Shares under our Articles of Association. Our
Domestic Shares are not listed or traded on any stock exchange.
RANKING
Save as described in this prospectus, Domestic Shares and H Shares shall rank pari passu with each
other in all other respects and, in particular, will rank equally for dividends or distributions declared, paid
or made. All dividends in respect of the H Shares are to be paid by us in Hong Kong dollars whereas all
dividends in respect of Domestic Shares are to be paid by us in Renminbi. In addition to cash, dividends
may be distributed in the form of Shares. For holders of H Shares, dividends in the form of Shares will be
distributed in the form of additional H Shares. For holders of Domestic Shares, dividends in the form of
Shares will be distributed in the form of additional Domestic Shares.
CONVERSION OF DOMESTIC SHARES INTO H SHARES
According to stipulations made 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 have been duly completed and
the approvals from the relevant PRC regulatory authorities, including the CSRC, and the relevant
overseas stock exchange have been obtained. In addition, such conversion, trading and listing shall in all
respects 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.
The Conversion of Domestic Shares into H Shares will involve an aggregate of 313,843,147
Domestic Shares held by 41 existing Shareholders (the “Full Circulation Participating Shareholders”),
representing 78.46% of total issued Shares of the Company upon completion of the Conversion of
Domestic Shares into H Shares and the Global Offering (assuming the Over-allotment Option is not
exercised).
SHARE CAPITAL
– 280 –


--- page 290 ---
Set out below is the shareholding of the existing Shareholders immediately before and after the
completion of the Global Offering and the Conversion of Domestic Shares into H Shares (assuming the
Over-allotment Option is not exercised).
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
M r .L i u ..................... 95,847,016 26.62 76,677,613 19.17 19,169,403 4.79
Yuejiang LP .................. 12,599,991 3.50 12,599,991 3.15 – –
Qinmo LP ................... 3,441,999 0.96 3,441,999 0.86 – –
Shenzhen Lumo Consulting Partnership
(Limited Partnership)
(ଉέ̹ኁኈፔ༔ΥྫΆุ
Υྫ) ................ 14,897,259 4.14 11,917,807 2.98 2,979,452 0.74
Shenzhen Qimo Investment Partnership
(Limited Partnership)
(ଉέ̹ᄁኈҳ༟ΥྫΆุ
Υྫ) ................ 12,961,193 3.60 10,368,954 2.59 2,592,239 0.65
Shenzhen Chumo Consulting
Partnership (Limited Partnership)
(ଉέู̹ኈፔ༔ΥྫΆุ
Υྫ) ................ 11,633,873 3.23 9,307,098 2.33 2,326,775 0.58
Mr. Lang Xulin (؍7,968,213 2.21 6,374,570 1.59 1,593,643 0.40
Mr. Wu Zhiwen ( юқ˖) ......... 7,968,213 2.21 6,374,570 1.59 1,593,643 0.40
Shenzhen Greenpine Growth Equity
Investment Partnership (Limited
Partnership)
(ᛆҳ༟ΥྫΆุ
Υྫ) ................ 21,698,003 6.03 21,698,003 5.42 – –
Qianhai Equity Investment Fund
(Limited Partnership)
(Υྫ) . . . 19,572,616 5.44 16,636,724 4.16 2,935,892 0.73
SHARE CAPITAL
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--- page 291 ---
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
CICC Qizhi (Shanghai) Private
Equity Investment Center L.P.
(ᛆҳ༟ʕː
Υྫ) ................ 16,168,502 4.49 16,168,502 4.04 – –
Ningbo Meishan Bonded Port Area
Tongban Investment Management
Partnership (Limited Partnership)
(೼ಥਜΝМҳ༟၍ଣ
Υྫ).......... 13,873,955 3.85 13,873,955 3.47 – –
China Internet Investment Fund
(Limited Partnership)
(Υྫ) . 13,254,573 3.68 13,254,573 3.31 – –
Shenzhen Capital Group Co., Ltd.
(ʮ̡ ) . . . 10,352,962 2.88 10,352,962 2.59 – –
Wenrun Zhenxin No.1 (Zhuhai) Equity
Investment Fund Partnership
(Limited Partnership)
(ږ
Υྫ).......... 9,911,298 2.75 9,911,298 2.48 – –
CRRC (Qingdao) Technology
Innovation Venture Capital
Partnership (Limited Partnership)
(ᛆҳ༟
Υྫ).......... 9,741,529 2.71 9,741,529 2.44 – –
Shenzhen Nanshan Hongtu Equity
Investment Fund Partnership
(Limited Partnership)
(Υྫ
Υྫ)............. 8,258,657 2.29 8,258,657 2.06 – –
SHARE CAPITAL
– 282 –


--- page 292 ---
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
Shenzhen Qunda Technology
Partnership (Limited Partnership)
(ΥྫΆุ
Υྫ) ................ 6,722,502 1.87 6,062,502 1.52 660,000 0.17
Wuxi Chanfa Trade in Service
Investment Fund Partnership
(Limited Partnership)
(Υྫ
Υྫ)............. 6,063,193 1.68 3,031,597 0.76 3,031,596 0.76
Wuxi Yunhui Internet of Things
Investment Management Partnership
(Limited Partnership)
(ᑌၣҳ༟၍ଣΥྫΆุ
Υྫ) ................ 6,063,193 1.68 6,063,193 1.52 – –
Shenzhen Qianfan Qihang No.1 Private
Equity Investment Fund Partnership
(Limited Partnership)
(ᛆҳ༟
Υྫ) ...... 5,097,899 1.42 – – 5,097,899 1.27
Hangzhou Junyi Venture Capital
Partnership
(ψё๐௴ุҳ༟ΥྫΆุ
Υྫ) ................ 5,029,289 1.40 5,029,289 1.26 – –
Hangzhou Daosheng Investment
Partnership (Limited Partnership)
(ҳ༟ΥྫΆุ
Υྫ) ................ 4,757,645 1.32 4,757,645 1.19 – –
Mr. Liu Dan ( ᄎʗ) ............. 3,572,450 0.99 – – 3,572,450 0.89
SHARE CAPITAL
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--- page 293 ---
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
Zhongyuan Qianhai Equity Investment
Fund (Limited Partnership)
(ږ
Υྫ) ................ 3,441,104 0.96 2,924,938 0.73 516,166 0.13
Xizang Xinxingrong Venture Capital
Co., Ltd.
(ʮ̡ ) . . . 3,441,104 0.96 3,441,104 0.86 – –
Ningbo Zhuoyuan Yujiang Equity
Investment Partnership (Limited
Partnership)
(ᛆҳ༟ΥྫΆุ
Υྫ) ................ 3,233,700 0.90 3,233,700 0.81 – –
Shenzhen Hongtu Chuangke Venture
Capital Partnership (Limited
Partnership)
(௴ุҳ༟ΥྫΆุ
Υྫ) ................ 3,154,420 0.88 3,154,420 0.79 – –
Zhuhai Jiufeite Jiusheng Equity
Investment Fund Partnership
(Limited Partnership)
(Υྫ
Υྫ)............. 2,548,932 0.71 2,548,932 0.64 – –
Zhuhai Tongdao Qichuang Angel
Investment Partnership (Limited
Partnership)
(मऎΝ༸ᄁ௴˂Դҳ༟ΥྫΆุ
Υྫ) ................ 2,315,459 0.64 2,315,459 0.58 – –
Mituo Zhiyue (Zibo) Equity Investment
Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ
Υྫ) ................ 2,249,392 0.62 2,249,392 0.56 – –
SHARE CAPITAL
– 284 –


--- page 294 ---
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
Shenzhen Weijia Investment Enterprise
(Limited Partnership)
(Υྫ) . . 1,818,972 0.51 1,818,972 0.45 – –
Qingdao Hailian Zhongzheng
Investment Enterprise
(Limited Partnership)
(ऎᑌʕ͍ҳ༟Άุ
Υྫ) ................ 1,616,868 0.45 1,616,868 0.40 – –
Shandong Huarong Tianze Investment
Management Center (Limited
Partnership)
(ശፄ˂ዣҳ༟၍ଣʕː
Υྫ) ................ 1,616,868 0.45 1,616,868 0.40 – –
Shenzhen Yanxi Management
Consulting Partnership
(Limited Partnership)
(ଉέԊᒌ၍ଣፔ༔ΥྫΆุ
Υྫ) ................ 1,616,868 0.45 1,616,868 0.40 – –
Ningbo Leili Technology
Entrepreneurship Investment Center
(Limited Partnership)
(Ҧ௴ุҳ༟ʕː
Υྫ) ................ 1,408,211 0.39 1,408,211 0.35 – –
Shanghai Shizhineng Investment
Management Co., Ltd.
(ʮ̡ ) . . . 1,010,520 0.28 1,010,520 0.25 – –
Mr. Liu Simeng (഼) ......... 720,005 0.20 720,005 0.18 – –
SHARE CAPITAL
– 285 –


--- page 295 ---
Name of Shareholders
Number of
Domestic Shares
as of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
and immediately
prior to the
Global Offering
and the
Conversion of
Domestic Shares
into H Shares
Number of
converted H
Shares
Approximate
percentage of
converted H
Shares in the
total issued
share capital of
our Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
Number of
remaining
Domestic Shares
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
HS h a r e s
(assuming the
Over-allotment
Option is not
exercised)
Approximate
percentage of
remaining
Domestic Shares
in the total
issued share
capital of our
Company
immediately
after the Global
Offering and the
Conversion of
Domestic Shares
into
H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%) (%) (%)
Shenzhen Woying Venture Capital
Investment Center (Limited
Partnership)
(ଉέఅᙊ௴ุҳ༟ʕː
Υྫ) ................ 670,553 0.19 670,553 0.17 – –
Hangzhou Shiwei Venture Investment
Partnership (Limited Partnership)
(ψɤၪ௴ุҳ༟ΥྫΆุ
Υྫ) ................ 603,519 0.17 603,519 0.15 – –
Ms. Yin Guofeng ( ʙ਷ჾ) ........ 431,996 0.12 431,996 0.11 – –
Rongyuan (Tianjin) Venture Capital
Partnership (Limited Partnership)
(௴ุҳ༟ΥྫΆุ
Υྫ) ................ 363,780 0.10 363,780 0.09 – –
Zhuhai Hengqin Qichuang Gongxiang
Venture Capital Fund Partnership
(Limited Partnership)
(ږ
Υྫ).......... 194,011 0.05 194,011 0.05 – –
Haikou Guoying Junhe Enterprise
Management Partnership (Limited
Partnership)
(ёձΆุ၍ଣΥྫΆุ
Υྫ) ................ 87,695 0.02 – – 87,695 0.02
Total ...................... 360,000,000 100.00 313,843,147 78.46 46,156,853 11.54
SHARE CAPITAL
– 286 –


--- page 296 ---
If any other of the Domestic Shares are to be converted, listed and traded as H Shares on the Stock
Exchange, such conversion, listing and trading will need the approval of the relevant PRC regulatory
authorities, including the CSRC, and the approval of the Stock Exchange. We may apply for the listing of
all or any portion of the Domestic Shares on the Stock Exchange as H Shares to ensure that the conversion
process can be completed promptly upon notice to the Stock Exchange and delivery of Shares for entry on
the H Share register. Approval of Shareholders at a general meeting is not required for the listing and
trading of the converted Shares on an overseas stock exchange.
Listing Review and Approval by the CSRC
In accordance with the Guidelines for Applying “Full Circulation” for Domestic Unlisted Shares of
H-share Listed Companies (Hˏ ) and Trial Administrative
Measures and relevant five guidelines announced by the CSRC, H-share listed companies which apply for
the conversion of domestic unlisted shares into H shares for listing and circulation on the Stock Exchange
shall conform to relevant regulations promulgated by the CSRC, and authorize the company to file with
the CSRC on their behalf.
Our Company applied for a “Full Circulation” with the CSRC on June 28, 2024, and submitted the
application reports, authorization documents of the Shareholders of Domestic Shares for which an
H-share “Full Circulation” was applied, commitment about the compliance of share acquisition and other
documents in accordance with the requirements of the CSRC. Our Company received the reply from the
CSRC dated November 21, 2024, in relation to the “Full Circulation,” pursuant to which, a total of
313,843,147 unlisted Domestic shares (with a nominal value of RMB1.00 each) held by the Full
Circulation Participating Shareholders were approved to be converted into H Shares, and the relevant
Shares may be listed on the Stock Exchange upon completion of the conversion. This reply shall remain
effective within 12 months from the date of approval.
Listing Approval by the Stock Exchange
We have applied to the Listing Committee of the Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any H Shares
which may be issued pursuant to the exercise of the Over-allotment Option) and the H Shares to be
converted from 313,843,147 Domestic Shares, which is subject to the approval by the Stock Exchange.
We will perform the following procedures for the Conversion of Domestic Shares into H Shares after
receiving the approval of the Stock Exchange: (1) giving instructions to our H Share Registrar regarding
the 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 Full
Circulation Participating Shareholders may only deal in the H Shares upon completion of the domestic
procedures as disclosed in this section.
TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL OFFERING
The PRC Company Law provides that in relation to the public offering of a company, the shares
issued prior to the public offering shall not be transferred within a period of one year from the date on
which the publicly offered shares are listed on any stock exchange. Accordingly, Shares issued by our
Company prior to the Listing Date shall be subject to this statutory restriction and not be transferred
within a period of one year from the Listing Date.
SHARE CAPITAL
– 287 –


--- page 297 ---
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines for the “Full Circulation” Program for Domestic Unlisted Shares of
H-share Listed Companies (Hˏ ) announced by the CSRC,
the domestic shareholders of unlisted shares shall handle share transfer registration business in
accordance with the relevant business rules of CSDC. Further, H-share companies should submit the
relevant status reports to the CSRC within 15 days after the transfer registration with the CSDC of the
shares involved in the application is completed.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING IS REQUIRED
For details of circumstances under which our Shareholders’ general meeting is required, please see
“Appendix III—Summary of Our Articles of Association—The General Meeting—General Provisions of
the General Meeting” in this prospectus.
SHARE CAPITAL
– 288 –


--- page 298 ---
To the best of our Directors’ knowledge and information, the following persons will, immediately
following the completion of the Global Offering and the Conversion of Domestic Shares into H Shares,
have interests or short positions in our Shares or underlying Shares which would be required to be
disclosed to our Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO
or will, 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 any general meeting of our Company:
As of the Latest Practicable Date
Immediately following the completion of the Global Offering and the Conversion of
Domestic Shares into H Shares (assuming the Over-allotment Option is not
exercised)
Shareholder Nature of interest
Number of
Domestic Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company Number of Shares Description of Shares
Approximate
percentage of
shareholding in
our Domestic
Shares/
H Shares (as
appropriate)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
M r . L i u............. B eneficial owner 95,847,016 26.62% 19,169,403 Domestic Shares 41.53% 4.79%
76,677,613 H Shares 21.67% 19.17%
Interest in controlled
corporation (1)
16,041,990 4.46% 16,041,990 H Shares 4.53% 4.01%
Mr. Liu Yang (ݱInterest in controlled
corporation (2)
39,492,325 10.97% 7,898,466 Domestic Shares 17.11% 1.97%
31,593,859 H Shares 8.93% 7.90%
Shenzhen Capital Group
Co., Ltd. ( ଉέ̹௴อ
ʮ̡ ) ....
Beneficial owner 10,352,962 2.88% 10,352,962 H Shares 2.93% 2.59%
Interest in controlled
corporation (3)
11,413,077 3.17% 11,413,077 H Shares 3.23% 2.85%
Shenzhen Greenpine Growth
Equity Investment
Partnership (Limited
Partnership) (ͫ
ᛆҳ༟ΥྫΆุ
Υྫ) .........
Beneficial owner 21,698,003 6.03% 21,698,003 H Shares 6.13% 5.42%
Qianhai Equity Investment
Fund (Limited
Partnership) (ᛆ
Υྫ) ...
Beneficial owner 19,572,616 5.44% 2,935,892 Domestic Shares 6.36% 0.73%
16,636,724 H Shares 4.70% 4.16%
Wuxi Chanfa Trade in
Service Investment Fund
Partnership (Limited
Partnership) (؂
ΥྫΆุ
Υྫ) ........
Beneficial owner 6,063,193 1.68% 3,031,596 Domestic Shares 6.57% 0.76%
3,031,597 H Shares 0.86% 0.76%
SUBSTANTIAL SHAREHOLDERS
– 289 –


--- page 299 ---
As of the Latest Practicable Date
Immediately following the completion of the Global Offering and the Conversion of
Domestic Shares into H Shares (assuming the Over-allotment Option is not
exercised)
Shareholder Nature of interest
Number of
Domestic Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company Number of Shares Description of Shares
Approximate
percentage of
shareholding in
our Domestic
Shares/
H Shares (as
appropriate)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Shenzhen Qianfan Qihang
No.1 Private Equity
Investment Fund
Partnership (Limited
Partnership) ( ଉέɷωΆ
ږ
Υྫ)...
Beneficial owner 5,097,899 1.42% 5,097,899 Domestic Shares 11.04% 1.27%
Mr. Liu Dan ( ᄎʗ)...... B eneficial owner 3,572,450 0.99% 3,572,450 Domestic Shares 7.74% 0.89%
(1) As of the Latest Practicable Date, Mr. Liu acted as the general partner of Yuejiang LP and Qinmo LP. Under the SFO,
Mr. Liu is deemed to be interested in the entire Shares held by Yuejiang LP and Qinmo LP. See “Share
Capital—Conversion of Domestic Shares into H Shares” for the respective numbers of Domestic Shares and H Shares
held by the relevant controlled corporations immediately before and after the completion of the Global Offering and
the Conversion of Domestic Shares into H Shares.
(2) As of the Latest Practicable Date, Mr. Liu Yang acted as the general partner of three share incentive platforms,
including Lumo LP, Qimo LP and Chumo LP. Under the SFO, Mr. Liu Yang is deemed to be interested in the entire
Shares held by Lumo LP, Qimo LP and Chumo LP. See “Share Capital—Conversion of Domestic Shares into H Shares”
for the respective numbers of Domestic Shares and H Shares held by the relevant controlled corporations immediately
before and after the completion of the Global Offering and the Conversion of Domestic Shares into H Shares.
(3) As of the Latest Practicable Date, Nanshan Hongtu and Hongtu Chuangke were ultimately controlled by SCGC. Under
the SFO, SCGC is deemed to be interested in the Shares held by Nanshan Hongtu and Hongtu Chuangke. See “Share
Capital—Conversion of Domestic Shares into H Shares” for the respective numbers of Domestic Shares and H Shares
held by the relevant controlled corporations immediately before and after the completion of the Global Offering and
the Conversion of Domestic Shares into H Shares.
Save as disclosed above and in “Appendix IV—Statutory and General Information” of this
prospectus, our Directors are not aware of any person who will, immediately following the completion of
the Global Offering and the Conversion of Domestic Shares into H Shares (and the offering of any
additional H Shares pursuant to the Over-allotment Option), have an interest or short position in the
Shares or underlying shares of the Company which would be required to be disclosed to the Company and
the Stock Exchange under Divisions 2 and 3 of Part XV of the SFO or will, 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 the Company or any other members of our Group.
SUBSTANTIAL SHAREHOLDERS
– 290 –


--- page 300 ---
You should read the following discussion and analysis in conjunction with our audited
consolidated financial statements, including the notes thereto included in the Accountants’ Report set
out in Appendix I to this prospectus. You should read the entire Accountants’ Report in Appendix I to
this prospectus and not rely merely on the information contained in this section. The Accountants’
Report has been prepared in accordance with the IFRSs, which may differ in material aspects from
generally accepted accounting principles in other jurisdictions.
Our historical results do not necessarily indicate results expected for any future periods. The
following discussion and analysis contain forward-looking statements that reflect our current views
with respect to future events and financial performance that involve risks and uncertainties. These
statements are based on our assumptions and analysis 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 , whether actual outcomes and
developments will meet our expectations and predictions depends on a number of risks and
uncertainties. In evaluating our business, you should carefully consider the information provided in
the sections headed “F orward-looking Statements” and “Risk Factors” in this prospectus.
OVERVIEW
We are one of leading companies that specializes in the development, manufacturing and
commercialization of collaborative robots, or commonly known as “cobots.” We are a top 2 player in the
global cobot industry and the No.1 player among all Chinese cobot companies, with a global market share
of 13.0% as measured by shipment volume in 2023, according to the CIC Report. The global cobot
industry is at a nascent stage of development, whose market size accounted for less than 2% of the global
robot industry in terms of revenue in 2023. According to the same source, we rank seventh in the global
cobot industry with a global market share of 3.6% in terms of global revenue generated from cobots in
2023. Leveraging our proprietary full-stack cobot development technologies and in-house design and
development of key components, we offer selections of cobots in payload capacity, axis model and use
case, addressing our customers’ diverse needs across a wide array of use cases. Our cobots are primarily
categorized into two types based on the number of axes, i.e., four-axis cobots and six-axis cobots. As of
the Latest Practicable Date, we offered a total of 27 cobot models in four series, catering to numerous use
cases in manufacturing, retail, healthcare, STEAM education, scientific research settings and many more.
Our revenue was RMB174.3 million, RMB241.0 million, RMB286.7 million, RMB109.9 million
and RMB120.5 million in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024,
respectively. We recorded gross profit of RMB88.1 million, RMB98.2 million, RMB124.8 million,
RMB42.9 million and RMB52.8 million in 2021, 2022, 2023 and the six months ended June 30, 2023 and
2024, respectively, and loss for the year/period of RMB41.8 million, RMB52.5 million, RMB103.3
million, RMB51.7 million and RMB59.9 million in the same years/periods, respectively.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
We believe that the most significant factors affecting our results of operations and financial
condition include the following.
Development of the Global Cobot Industry
We operate in the rapidly growing cobot market. Our business, financial performance, results of
operations and future growth are in turn affected by the development of the cobot industry, including the
general factors affecting the global cobot market, the global economic conditions and regulatory
environment, as well as the market acceptance, adoption and demand of cobot products and related
FINANCIAL INFORMATION
– 291 –


--- page 301 ---
services. According to the CIC Report, the global cobot industry in terms of revenue increased from
US$466.6 million in 2019 to US$1,039.5 million in 2023, at a CAGR of 22.2%, and is expected to reach
US$4,950.0 million in 2028, at a CAGR of 36.6% from 2023 to 2028. In particular, aging populations,
labor shortages and rising labor costs create growing demand for and incentivize the utilization of cobots,
and the development of sophisticated cobots as a key expression of AI technology also drives the growth
of the cobot market. Furthermore, propelled by industry-specific demands, customization for various
applications, technology integration such as AI and enhanced safety measures, there is a trend towards
diversification of downstream use cases of cobots. See “Industry Overview—Overview of the Global and
China’s Robot and Cobot Industries—Market Drivers of the Global Cobot Market” and “Industry
Overview—Overview of the Global and China’s Robot and Cobot Industries—Development Trends
Analysis of the Global Cobot Market.” We believe that we are well-positioned to capture such market
opportunity with our extensive cobot portfolio.
Our Ability to Enhance and Develop Our Products
Our cobot products are subject to diversified use cases and rapidly evolving customer demands, and
the global cobot industry we operate in is characterized by constant advancements in product innovations
and technology advancements. To maintain our leading position in the global cobot market and achieve
sustainable growth, we must continuously enhance our cobot products to keep pace with these changes in
a timely and effective manner. To that end, our ability to efficiently develop and launch new cobot
products and enhance our existing cobot products is critical to our growth prospects. We have a proven
track record in this regard, as demonstrated by our comprehensive product matrix catering to a wide array
of use cases. We aspire to continue to leverage our existing advantages in this regard and strengthen our
product matrix to drive our growth.
Our research and development capabilities are the backbone of our ability to enhance and develop
cobot products. We have invested and expect to continue to invest significant resources in our research
and development efforts. During the Track Record Period, our research and development expenses were
RMB46.9 million, RMB52.1 million, RMB70.5 million, RMB31.2 million and RMB31.4 million in 2021,
2022, 2023 and the six months ended June 30, 2023 and 2024, respectively, accounting for 26.9%, 21.6%,
24.6%, 28.4% and 26.1% of our total revenue in the same years/periods, respectively. In particular, in
light of the nature of the cobot industry and cobot products and the demands for talents in the related
disciplines, we believe that the ability to attract and retain a strong research and development team with
the relevant knowledge, expertise and acumen is fundamental to our long-term competitiveness.
Therefore, we expect to remain committed to our investment in talents. In addition, while we strive to
achieve efficiency with our research and development efforts, as similar initiatives in the cobot industry
are usually associated with uncertainties in the process and outcome, we may experience fluctuations in
research and development expenses and we may not predict the results of and return on such investment,
which, in turn, may affect our results of operations.
Our Commercialization and Sales and Marketing Capabilities
We have made proactive efforts in product commercialization and global market expansion, which
has contributed significantly to the expansion of our market reach and customer base, and, as a result, the
growth of our sales volume and revenue. In 2021, 2022, 2023 and the six months ended June 30, 2024, we
had 289, 411, 434 and 304 direct sale customers, respectively, and in the same years/period, we had 344,
387, 358 and 224 distributors, respectively. We believe that our dual approach to sales has enabled us to
tap into both the benefits of direct sales in customer engagement and product enhancements, and the
benefits of distributorship in market outreach and technical support. Our ability to strengthen our
customer base, expand market reach, generate sales, and achieve business growth in the future will
continue to rely on the efficiency and breadth of our sales network.
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As we are still at a relatively early stage of commercialization, we have devoted, and expect to
continue to devote, substantial resources to our sales and marketing initiatives to deepen our penetration
and achieve higher market recognition, especially in the overseas markets, for which we may incur higher
relevant sales and marketing expenses. During the Track Record Period, our selling and distribution
expenses were RMB63.6 million, RMB89.3 million, RMB127.4 million, RMB56.6 million and RMB62.5
million in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively, representing
36.5%, 37.0%, 44.4%, 51.5% and 51.9% of our total revenue in the same years/periods, respectively. The
increase was primarily due to our enhanced sales and marketing efforts, especially in connection with our
overseas business expansion in 2023. As we continue to scale up our business operations, we expect to
achieve greater cost efficiency with our sales and marketing initiatives.
Our Ability to Effectively Penetrate and Compete in the Global Market
As we operate in the global cobot market, we expect that our overseas market outreach and
penetration will continue to have a significant impact on our growth prospects. As part of our global
strategies, we have strategically established a sales network that integrates direct sales and
distributorship spanning both domestic and international markets with a global footprint in over 80
countries and regions. Our revenue from markets outside of China increased both in absolute amount and
as a percentage of our total revenue, accounting for 48.1%, 58.1%, 59.1% and 61.4% of our total revenue
in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively. Furthermore, our gross profit
margin in different markets could vary, and the change in our geographical sales contribution could in
turn affect our overall profitability. For instance, we generally had a higher gross profit margin in markets
outside of China during the Track Record Period. Our future success will depend both on our ability to
sustain our homegrown advantages in the domestic market and efficiently expand our market footprints
and deepen our penetration in the global market.
We face competition with international and domestic players with diverse capabilities, some of
which may have longer operating history, greater business scale and resources, higher market recognition
and more effective pricing strategies than us. As such, our ability to compete effectively is crucial to our
sales performance, market share and profitability. If the degree of market competition intensifies for us,
we may have to adjust our business strategies and invest significant resources in our business, which
would affect our results of operations.
Our Ability to Manage Our Costs and Expenses and Achieve Operational Efficiency
Our ability to achieve profitability and sustainable growth depends in part on our management of
cost of sales. In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our cost of sales was
RMB86.2 million, RMB142.8 million, RMB161.9 million, RMB67.0 million and RMB67.6 million,
respectively, accounting for 49.5%, 59.2%, 56.5%, 60.9% and 56.1% of our revenue for the same
years/periods, respectively. Our cost of sales primarily consists of cost of raw materials, overhead costs,
direct labor costs, and outsourced production costs. Changes in any major component of our cost of sales
and our overall cost structure could have an impact on our gross profit and gross profit margin. For
instance, our cost of raw materials accounted for 78.9%, 78.6%, 76.4%, 68.8% and 74.2% of our total
cost of sales in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively. The
procurement costs for such raw materials may fluctuate due to a number of factors beyond our control,
such as supply chain disruptions and inflation, and we are susceptible to significant changes in the
availability, price and standard of critical raw materials. We have implemented risk management
measures against such potential disruptions to our supply chain. In addition, our cost of sales and gross
margin may, from time to time, be affected by the write-down of obsolete or slow-moving inventories.
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Moreover, as we gradually shifted the production of our cobots to our own facilities in 2022, we
experienced a change in our cost structure during the Track Record Period, as demonstrated by the
decrease in outsourced production costs and the increases in overhead costs and direct labor costs
associated with our production facilities. We also experienced fluctuations in overhead costs and direct
labor costs associated with such shift. Going forward, as we further scale up our production capabilities
to empower our product matrix and business expansion, we expect to achieve higher cost efficiency
through the economies of scale and technology upgrades.
Our business and results of operations are also significantly affected by our operating expenses,
which primarily comprised selling and distribution expenses, administrative expenses and research and
development expenses during the Track Record Period. Our selling and distribution expenses and
research and development expenses may continue to increase and account for a significant portion of our
total operating expenses. We expect that our administrative expenses will remain relatively stable in
relation to revenue. For details of our measures to improve management of costs and expenses, see
“Business—Path to Profitability.”
Changes in Our Revenue Mix
During the Track Record Period, we primarily generated revenue from the sales of six-axis cobots
and four-axis cobots, and, to a much lesser extent, from the sales of integrated cobots. The gross profit
margins of different products tend to vary, and the gross profit margins of our products could change with
technology, product and manufacturing upgrades, and pricing factors. As such, our revenue mix has an
impact on our overall gross profit margin. For instance, revenue from six-axis cobots accounted for
14.9%, 43.5%. 46.8%, 47.9% and 53.0% of our total revenue in 2021, 2022, 2023 and the six months
ended June 30, 2023 and 2024, respectively, and revenue from four-axis cobots accounted for 68.8%,
41.9%, 34.7%, 36.8% and 30.5% of our total revenue in the same years/periods, respectively. The gross
profit margin of six-axis cobots was 44.1%, 37.0%, 47.2%, 44.9% and 47.3% in 2021, 2022, 2023 and the
six months ended June 30, 2023 and 2024, respectively, compared with 60.8%, 50.4%, 54.8%, 52.4% and
54.4% of four-axis cobots in the same years/periods, respectively. Furthermore, the gross profit margin
from different geographic markets also varied during the Track Record Period, primarily due to our
different pricing strategies in these markets based on their market conditions. As we launch new cobot
products, upgrade our cobot product matrix and adjust our market outreach in the future, we may
experience further fluctuations in the sales contribution of each category, and the gross profit margin of
different product lines and markets may continue to vary, which may have an impact on our results of
operations.
Government Policies Supporting the Cobot Industry
The cobot industry and we have benefited, and expect to continue to benefit, from favorable policies
supporting the cobot industry. For instance, according to the CIC Report, the PRC government in recent
years has been implementing a number of preferential policies and development plans to encourage the
development of the cobot industry, such as the 14th Five Year Plan for the Development of the Robot
Industry and the Implementation Plan for “Robot+” Application Action . During the Track Record Period,
we also received several government grants in connection with, among others, our research and
development efforts, business achievements and our production facilities, which in turn facilitated our
business expansion. However, to the extent that any such favorable government policies were
discontinued or reduced in the future, the cobot industry may be affected, which may also affect our
financial performance and growth prospects.
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Seasonality
We generally recognize a significant portion of our revenue in the fourth quarter of our fiscal year,
primarily because (1) certain of our customers, in particular those that use our cobot products in
industrial and education settings, tend to place their order and/or complete their inspection in the fourth
quarter in accordance with their own business practices, which causes such revenue to be recognized in
the fourth quarter according to relevant revenue recognition policy; and (2) our customers tend to
schedule their procurement in advance of the major holidays in China and overseas markets, many of
which are in the fourth quarter, to avoid potential supply chain issues associated with the holidays.
According to the CIC Report, such revenue seasonality is generally prevalent in the cobot industry, due to
the following reasons: (1) certain customers in the cobot industry, including many customers from the
industrial and education application settings, tend to schedule their purchase of equipment towards their
fiscal year end to maintain better control over their annual capital expenditure and realize their annual
budget; and (2) customers in the cobot industry tend to require that the order delivery be completed
before year end to avoid shipment disruptions and other logistic issues caused by holidays at the
beginning of a new year. Our revenue from fourth quarter accounted for 31.8%, 44.4% and 40.8% of our
total revenue in 2021, 2022 and 2023, respectively. In contrast, the first quarter is usually our low season.
The degree of seasonality may vary from year to year due to conditions in the industry and other
factors, which makes it difficult for us to predict the level of demand with precision. If seasonal demand
exceeds our expectation, we may not have sufficient stock or arrange for timely production and delivery.
If seasonal demand is lower than our expectation, we could be left with excess inventory, higher working
capital and liquidity requirements, as well as the risk of impairment losses on our inventory.
BASIS OF PREPARATION
The historical financial information has been prepared in accordance with the IFRSs. The historical
financial information has been prepared under the historical cost convention, except for certain financial
instruments which have been measured at fair value at the end of each of the relevant period.
The preparation of the historical financial information in conformity with IFRSs 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 3 to the Accountants’ Report in Appendix I to this prospectus.
All IFRSs effective for the accounting period commencing from January 1, 2023, together with the
relevant transitional provisions, have been adopted in the preparation of the historical financial
information during the Track Record Period.
CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTS
We have identified certain accounting policies that are significant to the preparation of our
consolidated financial statements. Some of our accounting policies require us to apply estimates and
assumptions as well as complex judgements related to accounting items. The estimates and assumptions
we use and the judgements we make in applying our accounting policies have a significant impact on our
financial position and operational results. Results may differ from these estimates under different
assumptions and conditions.
Our management continually evaluates such estimates, assumptions and judgements based on
historical experience and other assumptions which our management believes to be reasonable under the
circumstances.
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We set forth below accounting policies that we believe involve the most significant estimates,
assumptions and judgements used in the preparation of our financial statements. Our significant
accounting policies, as well as our key source of estimation uncertainties, which are important for
understanding our financial condition and results of operations, are set forth in Notes 2.3 and 3 to the
Accountants’ Report in Appendix I to this prospectus.
Revenue Recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which we expect to be entitled
in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which we will be entitled in exchange for transferring the goods or services to the customer.
The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when
the associated uncertainty with the variable consideration is subsequently resolved.
When the contract contains a financing component which provides the customer with a significant
benefit of financing the transfer of goods or services to the customer for more than one year, revenue is
measured at the present value of the amount receivable, discounted using the discount rate that would be
reflected in a separate financing transaction between us and the customer at contract inception. When the
contract contains a financing component which provides us with a significant financial benefit for more
than one year, revenue recognized under the contract includes the interest expense accreted on the
contract liability under the effective interest method. For a contract where the period between the
payment by the customer and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the practical
expedient in IFRS 15.
(a) Sale of products
Revenue from the sale of products is recognized at the point in time when control of the asset is
transferred to the customers, generally on delivery or acceptance of the products as agreed in the sales
contracts.
For some contracts, we provide installation and commissioning services that are bundled together
with the sale of products to the customers. The installation and commissioning services significantly
modify or customize the goods, and, therefore, the products and the services are highly interrelated and
instead combined as one single performance obligation which is satisfied at a point in time.
(b) Product related supporting services
Revenue from services is recognized at a point in time when the service is provided to and accepted
by the customer.
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Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on the
weighted average basis and, in the case of work in progress and finished goods, comprises direct
materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on
estimated selling prices less any estimated costs to be incurred to completion and disposal.
Provision against obsolete and slow-moving inventories
We review the condition of our inventories at the end of each reporting period and makes provisions
against obsolete and slow-moving inventory items which are identified as no longer suitable for sale or
use based on sales forecasts. Such sales forecasts are prepared based on agreements or orders on hand and
estimated sales in the foreseeable future based on historical experiences with our customers and current
market conditions of the robot industry. Management estimates the net realizable value for those obsolete
and slow-moving inventories based primarily on the latest invoice prices and current market conditions.
The estimation is reassessed at the end of each reporting period. The provision against obsolete and
slow-moving inventories requires the use of judgements and estimates. Where the actual outcome or
expectation in future is different from the original estimate, such difference will impact on the carrying
value of inventories and the write-down of inventories recognized in the periods in which such estimates
have been changed.
Share-based Payments
We operate share award schemes for the purpose of providing incentives and rewards to eligible
participants who contribute to the success of our operations. Employees (including directors) receive
remuneration in the form of share-based payments, whereby employees render services as consideration
for equity instruments (“equity-settled transactions”).
The cost of equity-settled transactions with employees is measured by reference to the fair value at
the date on which they are granted. The fair value of share awards is determined by an external valuer
using the probability weighted expected return method and valuation models.
The cost of equity-settled transactions is recognized in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are
fulfilled. The cumulative expense recognized for equity-settled transactions at the end of each of period
during the Track Record Period until the vesting date reflects the extent to which the vesting period has
expired and our best estimate of the number of equity instruments that will ultimately vest. The charge or
credit to profit or loss for a period represents the movement in the cumulative expense recognized as at
the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the
grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of our
best estimate of the number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other conditions attached to an award, but
without an associated service requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an immediate expensing of an award
unless there are also service and/or performance conditions.
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For awards that do not ultimately vest because non-market performance and/or service conditions
have not been met, no expense is recognized. Where awards include a market or non-vesting condition,
the transactions are treated as vesting irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as
if the terms had not been modified, if the original terms of the award are met. In addition, an expense is
recognized for any modification that increases the total fair value of the share-based payments, or is
otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognized for the award is recognized immediately.
Property, Plant and Equipment and Depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset to its
working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such
as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it
is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major
inspection is capitalized in the carrying amount of the asset as a replacement. Where significant parts of
property, plant and equipment are required to be replaced at intervals, we recognize such parts as
individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property,
plant and equipment to its residual value over its estimated useful life. The principal annual rates used for
this purpose are as follows:
Leasehold improvements Shorter of remaining lease terms and estimated useful lives
Buildings 3.17% to 4.75%
Furniture and fixtures 19% to 32%
Electronic equipment and others 9.5% to 32%
Motor vehicles 19% to 32%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that
item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual
values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at the
end of each period during the Track Record Period.
An item of property, plant and equipment including any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss on disposal or retirement recognized in the statement of profit or loss in the year the
asset is derecognized is the difference between the net sales proceeds and the carrying amount of the
relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is
reclassified to the appropriate category of property, plant and equipment when completed and ready for
use.
FINANCIAL INFORMATION
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Government Grants
Government grants are recognized at their fair value where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When the grant relates to an
expense item, it is recognized as income on a systematic basis over the periods that the costs, for which it
is intended to compensate, are expensed.
Where we receive grants of non-monetary assets, the grants are recorded at the fair value of the
non-monetary assets and released to the statement of profit or loss over the expected useful lives of the
relevant assets by equal annual instalments.
Impairment Testing of Certain Non-financial Assets
In accordance with IAS 36.12, we assess at the end of each reporting period whether there are any
indications that non-current assets (other than inventories, contract assets, deferred tax assets, financial
assets) may be impaired. If any such indication exists, we estimate the recoverable amount of the assets.
In 2021, 2022, 2023 and the six months ended June 30, 2024, we recorded net losses of RMB41.8
million, RMB52.5 million, RMB103.3 million and RMB59.9 million, respectively. Our losses were
mainly due to the fact that cobot industry is an emerging, technology-intensive sector characterized by
significant upfront research and development and market investment, which in turn mandates continual
research and development and market promotion. Our cobots have been launched in the market for a
relatively short period of time. Given our prolonged period of overall losses, there are indications of
impairment.
In accordance with IAS 36, we performed impairment tests at each period-end on non-current assets
(primarily including property, plant and equipment, right-of-use assets, intangible assets, and other
non-current assets) that show indications of impairment and estimate the recoverable amount of the
non-current asset. The recoverable amount is determined for the cash-generating unit to which the asset
belongs.
We are primarily engaged in the development, manufacturing, and commercialization of cobots. We
are highly centralized managed and our activities including research and development, procurement,
manufacture and production, sales are all governed and managed in headquarters and we only have one
operating segment. The non-current assets other than financial assets mainly include manufacturing
factories, plant and machinery, land use rights and leased properties. The entities that hold these assets
are highly inter-related and cannot be considered to generate cash inflows that are largely independent of
each other. Therefore, non-current assets, other than financial assets located in different entities, are all
allocated to the whole Group which is defined as the cash-generating unit (“CGU”) that generates cash
flows that are largely independent for impairment testing.
The recoverable amount of the CGU is determined based on a value in use calculation using cash
flow projections based on financial budgets approved by the management. The budgeted sales and
margins are estimated based on historical information achieved and the expected market development.
The discount rates used reflect specific risks relating to our Company. According to the impairment test
results, the recoverable amount of the CGU was larger than the carrying amount of the non-current assets
at the end of each reporting period, thus no impairment was required.
FINANCIAL INFORMATION
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RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statements of profit or loss items 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 ............. 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
Cost of sales .......... (86,234) (49.5) (142,796) (59.2) (161,905) (56.5) (66,978) (60.9) (67,618) (56.1)
Gross profit .......... 88,080 50.5 98,217 40.8 124,844 43.5 42,934 39.1 52,844 43.9
Other income and gains . . . 27,267 15.6 45,464 18.9 43,831 15.3 23,120 21.0 21,075 17.5
Selling and distribution
expenses ........... (63,630) (36.5) (89,274) (37.0) (127,389) (44.4) (56,560) (51.5) (62,519) (51.9)
Administrative expenses . . . (26,438) (15.2) (49,532) (20.6) (53,065) (18.5) (23,912) (21.8) (37,087) (30.8)
Research and development
expenses ........... (46,873) (26.9) (52,054) (21.6) (70,527) (24.6) (31,181) (28.4) (31,423) (26.1)
Other expenses ......... (3,001) (1.7) (3,408) (1.4) (5,537) (1.9) (4,552) (4.1) (1,772) (1.5)
Finance costs .......... (767) (0.4) (2,030) (0.8) (1,957) (0.7) (1,411) (1.3) (702) (0.6)
Share of profit of an
associate ........... 7 1 0 . 0 5 0 . 0 — — — — — —
Loss before tax ........ (25,291) (14.5) (52,612) (21.8) (89,800) (31.3) (51,562) (46.9) (59,584) (49.5)
Income tax (expense)/credit . (16,465) (9.4) 135 0.1 (13,481) (4.7) (125) (0.1) (299) (0.2)
Loss for the year/period .. (41,756) (24.0) (52,477) (21.8) (103,281) (36.0) (51,687) (47.0) (59,883) (49.7)
Non-IFRS Measure
To supplement our consolidated financial statements which are presented in accordance with the
IFRSs, we also use adjusted net loss (non-IFRS measure) as additional financial measure, which is not
required by, or presented in accordance with, the IFRSs. We believe that such non-IFRS measure
facilitate comparisons of operating performance from period to period and company to company by
eliminating potential impacts of certain items and provides useful information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as they help our
management. However, our presentation of adjusted net loss (non-IFRS measure) may not be comparable
to similarly titled measures presented by other companies. The use of such non-IFRS measure has
limitations as an analytical tool, and you should not consider them in isolation from, or as substitute for
analysis of, our results of operations or financial condition as reported under the IFRSs.
FINANCIAL INFORMATION
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We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted for share-based
payments expenses and listing expenses. Listing expenses are related to the Global Offering. Share-based
payments expenses are non-cash expenses arising from granting restricted share units and options to
senior management and employees. The following table sets out a reconciliation from adjusted net loss
(non-IFRS measure) to loss for the year/period which is presented in accordance with the IFRSs.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Loss for the year/period ............... (41,756) (52,477) (103,281) (51,687) (59,883)
Add:
Share-based payments expenses ........ (1,285) 12,579 21,464 5,845 13,665
Listing expenses .................... — — — — 11,242
Adjusted net loss (non-IFRS measure) ... (43,041) (39,898) (81,817) (45,842) (34,976)
KEY COMPONENTS OF OUR CONSOLIDATED INCOME STATEMENTS
Revenue
During the Track Record Period, we primarily generated revenue from the sales of six-axis cobots
and four-axis cobots, and, to a much lesser extent, from the sales of integrated cobots. In 2021, 2022,
2023 and the six months ended June 30, 2023 and 2024, our revenue was RMB174.3 million, RMB241.0
million, RMB286.7 million, RMB109.9 million and RMB120.5 million, respectively. The following table
sets forth a breakdown of our revenue by product type for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Six-axis cobots ........ 25,957 14.9 104,735 43.5 134,299 46.8 52,609 47.9 63,840 53.0
Four-axis cobots ........ 119,885 68.8 100,869 41.9 99,523 34.7 40,501 36.8 36,763 30.5
Integrated cobots ....... 16,095 9.2 31,596 13.1 34,306 12.0 11,989 10.9 14,713 12.2
Others (1) ............. 12,377 7.1 3,813 1.5 18,621 6.5 4,813 4.4 5,146 4.3
Total ............... 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
(1) Others primarily represent project-based solutions, such as STEAM education labs, as well as ancillary service fees
including technical service fees, training fees and maintenance fees in connection with our cobots.
FINANCIAL INFORMATION
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Our revenue increased during the Track Record Period, primarily driven by the increase in revenue
from six-axis cobots due to the increase in sales volume, as we enhanced the functions of our existing
six-axis cobots, launched new six-axis cobot products, and experienced an increase in market demand.
The following table sets forth the sales volume and ASP of our six-axis cobots, four-axis cobots and
integrated cobots during the Track Record Period.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
(RMB in thousands/unit for ASP)
Six-axis cobots ........ 3 9 4 65.9 1,707 61.4 2,374 56.6 898 58.6 1,354 47.1
Four-axis cobots ........ 14,626 8.2 12,524 8.1 11,782 8.4 4,918 8.2 4,464 8.2
Integrated cobots ....... 1,218 13.2 1,560 20.3 960 35.7 365 32.8 736 20.0
During the Track Record Period, we generated revenue from multiple countries and regions,
primarily including (1) mainland China, (2) European markets, which primarily include European and
certain Middle East countries and regions, (3) Americas, which primarily include the United States,
Brazil and Mexico, and (4) Asia-Pacific markets, which refer to Asian and Oceanian countries and
regions other than mainland China. The following table sets forth a breakdown of our revenue by
geographic market/country for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Mainland China ....... 90,457 51.9 100,893 41.9 117,221 40.9 39,181 35.6 46,543 38.6
European markets
Russia ............. 11,324 6.5 23,535 9.8 14,976 5.2 4,821 4.4 10,563 8.8
Germany ........... 11,185 6.4 7,191 3.0 7,200 2.5 5,173 4.7 3,389 2.8
Italy .............. 1,964 1.1 4,783 2.0 7,357 2.6 2,190 2.0 1,265 1.1
Netherlands ......... 1,595 0.9 1,425 0.6 4,431 1.5 1,421 1.3 2,051 1.7
Others ............. 14,530 8.4 29,030 12.0 34,349 12.0 18,280 16.6 11,044 9.2
Subtotal of European
markets ............ 40,598 23.3 65,964 27.4 68,313 23.8 31,885 29.0 28,312 23.6
Americas
U.S. .............. 12,595 7.2 13,079 5.4 23,541 8.2 9,177 8.3 9,955 8.3
Mexico ............ 6 5 9 0 . 4 3,735 1.5 4,842 1.7 3,683 3.4 3,028 2.5
Brazil ............. 6 8 3 0 . 4 7,960 3.3 3,090 1.1 1,619 1.5 779 0.6
Others ............. 2,482 1.4 5,934 2.5 6,085 2.1 2,634 2.4 2,529 2.1
Subtotal of Americas .... 16,419 9.4 30,708 12.7 37,558 13.1 17,113 15.6 16,291 13.5
Asia-Pacific Markets
Japan .............. 8,697 5.0 13,942 5.8 29,394 10.2 9,355 8.5 8,715 7.2
Thailand ........... 7,766 4.5 9,452 3.9 9,658 3.4 4,130 3.8 3,203 2.7
South Korea ......... 2,040 1.2 7,441 3.1 4,822 1.7 1,568 1.4 2,870 2.4
India .............. 4 8 2 0 . 3 1,376 0.6 4,426 1.5 1,386 1.3 7,010 5.8
Others ............. 7,855 4.4 11,237 4.6 15,357 5.4 5,294 4.8 7,518 6.2
Subtotal of Asia-Pacific
markets ............ 26,840 15.4 43,448 18.0 63,657 22.2 21,733 19.8 29,316 24.3
Total ............... 174,314 100.0 241,013 100.0 286,749 100.0 109,912 100.0 120,462 100.0
FINANCIAL INFORMATION
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--- page 312 ---
Our revenue from each geographic market above increased in absolute amount from 2021 to 2023,
primarily due to the expansion and enhancement of our cobot product matrix and increased sales and
marketing efforts, accompanied by the higher market acceptance and demand of our cobot products.
Specifically, (1) we recorded relatively higher revenue from Germany in 2021, as we concluded a major
contract with a customer in 2021 (see “Business—Customers” for details); (2) we recorded relatively
higher revenue from Russia in 2022, primarily due to the impact of the higher procurement from the
largest customer in 2022 (see “Business—Customers” for details); (3) we recorded relatively higher
revenue from Brazil in 2022, as we concluded a major contract with a customer in 2022 (see
“Business—Customers” for details); and (4) we experienced a decrease in revenue from South Korea in
2023, primarily due to the decrease in demand for cobots from customers in South Korea. Furthermore,
revenue from mainland China as a percentage of our total revenue decreased from 2021 to 2023,
compared with the overall increase of revenue from overseas markets as a percentage of our total revenue,
primarily due to our enhanced market penetration and sales network expansion in overseas markets from
2021 to 2023.
Our revenue from mainland China increased by 18.8% from RMB39.2 million in the six months
ended June 30, 2023 to RMB46.5 million in the six months ended June 30, 2024, primarily due to the
expansion and enhancement of our cobot product matrix, which captured the market demand from
Chinese customers. Our revenue from the European markets decreased by 11.2% from RMB31.9 million
in the six months ended June 30, 2023 to RMB28.3 million in the six months ended June 30, 2024, as we
were still building up the market awareness and acceptance of our new products in such market, which
typically took longer than such process in our domestic market, as well as the timing of revenue
recognition. Our revenue from the Americas decreased by 4.8% from RMB17.1 million in the six months
ended June 30, 2023 to RMB16.3 million in the six months ended June 30, 2024, primarily due to the
changes in procurement schedule of certain local customer. Our revenue from the Asia-Pacific markets
increased by 34.9% from RMB21.7 million in the six months ended June 30, 2023 to RMB29.3 million in
the six months ended June 30, 2024, primarily due to the expansion and enhancement of our cobot
product matrix, which captured the demand from certain local markets, especially cobot products of
higher profit margin.
In 2021 and 2022, the overseas sales were carried out primarily through our Company. In 2022 and
2023, we established overseas subsidiaries in the United States, Europe and Japan (hereinafter referred to
as the “Overseas Sales Entities”). Since then we began carrying out part of the overseas sales through the
Overseas Sales Entities. The transaction flow of these sales is that our Company first sells finished goods
to the Overseas Sales Entities, which then sell the products to third-party customers in the overseas
markets. We adopt the “resale minus” transfer pricing method to determine the transaction prices between
our Company and the respective Overseas Sales Entities. Under such transfer pricing policy, the Overseas
Sales Entities should retain a reasonable gross margin. As of the Latest Practicable Date, to the best
knowledge of and information available to our Directors after reasonable enquiries, none of the Overseas
Sales Entities has received any enquiries or written notices from relevant competent tax authorities
questioning the transfer pricing policy on the transactions between our Company and the Overseas Sales
Entities. The net loss position of the Overseas Sales Entities in 2023 were primarily due to the high costs
and low sales volume during the start up period. Therefore, our Directors believe that the risk exposure of
transfer pricing should be low.
FINANCIAL INFORMATION
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--- page 313 ---
Cost of Sales
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our cost of sales was
RMB86.2 million, RMB142.8 million, RMB161.9 million, RMB67.0 million and RMB67.6 million,
respectively, representing 49.5%, 59.2%, 56.5%, 60.9% and 56.1% of our revenue for the same
years/periods, respectively. Our cost of sales primarily consists of (1) raw materials, primarily including
various module components such as servos, motors, controllers, gear reducers and sensors; (2) overhead
costs, which primarily include depreciation charges of our production equipment, utilities fees for
production facilities and indirect labor costs; (3) direct labor costs, primarily related to our production
personnel; and (4) outsourced production costs, primarily representing outsourced production services
purchased from third-party manufacturing partners. 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
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Raw materials ......... 68,070 78.9 112,278 78.6 123,687 76.4 46,050 68.8 50,164 74.2
Overhead costs ........ — — 7,381 5.2 9,740 6.0 5,400 8.1 6,155 9.1
Direct labor costs ....... — — 3,146 2.2 3,720 2.3 2,129 3.2 2,259 3.3
Outsourced production
costs .............. 6,080 7.1 2,114 1.5 1,177 0.7 360 0.5 417 0.6
Others (1) ............. 6,661 7.7 9,251 6.5 6,510 4.1 2,795 4.1 2,090 3.1
Subtotal ............. 80,811 93.7 134,170 94.0 144,834 89.5 56,734 84.7 61,085 90.3
Write-down of inventories . 5,423 6.3 8,626 6.0 17,071 10.5 10,244 15.3 6,533 9.7
Total ............... 86,234 100.0 142,796 100.0 161,905 100.0 66,978 100.0 67,618 100.0
(1) Others primarily include other contract costs, such as technical service costs and delivery costs.
As we gradually shifted the production of our cobots to our in-house facilities, we experienced a
shift in our cost structure during the Track Record Period, as demonstrated by the decrease in outsourced
production costs and the increases in overhead costs and direct labor costs associated with our production
facilities, in particular in 2022. Along with the ramp-up of our in-house production activities, we began to
achieve higher cost efficiency in 2023 compared with 2022, which was partially offset by the increase in
the write-down of inventories in 2023.
FINANCIAL INFORMATION
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--- page 314 ---
Gross Profit and Gross Profit Margin
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our gross profit was
RMB88.1 million, RMB98.2 million, RMB124.8 million, RMB42.9 million and RMB52.8 million,
respectively, representing gross profit margin of 50.5%, 40.8%, 43.5%, 39.1% and 43.9%, respectively.
The following table sets forth a breakdown of our gross profit and gross profit margin by product type for
the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
(unaudited)
Six-axis cobots ........ 11,455 44.1 38,722 37.0 63,356 47.2 23,638 44.9 30,167 47.3
Four-axis cobots ........ 72,845 60.8 50,848 50.4 54,517 54.8 21,221 52.4 20,005 54.4
Integrated cobots ....... 5,335 33.1 16,372 51.8 18,206 53.1 5,946 49.6 6,928 47.1
Others ............... 3,868 31.3 901 23.6 5,836 31.3 2,373 49.3 2,277 44.2
Subtotal ............. 93,503 53.6 106,843 44.3 141,915 49.5 53,178 48.4 59,377 49.3
Less: write-down of
inventories ....... (5,423) (8,626) (17,071) (10,244) (6,533)
Total ............... 88,080 50.5 98,217 40.8 124,844 43.5 42,934 39.1 52,844 43.9
The following table sets forth a breakdown of our gross profit and gross profit margin by geographic
market for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%) Amount
Gross
profit
margin
(%)
(RMB in thousands, except for percentages)
(unaudited)
Mainland China ........ 49,373 54.6 38,652 38.3 48,383 41.3 15,248 38.9 18,711 40.2
European markets ....... 21,657 53.3 32,253 48.9 37,327 54.6 17,229 54.0 15,512 54.8
Americas ............. 8,848 53.9 14,839 48.3 20,987 55.9 9,468 55.3 8,908 54.7
Asia-Pacific markets ..... 13,625 50.8 21,099 48.6 35,218 55.3 11,233 51.7 16,246 55.4
Subtotal ............. 93,503 53.6 106,843 44.3 141,915 49.5 53,178 48.4 59,377 49.3
Less: write-down of
inventories ....... (5,423) (8,626) (17,071) (10,244) (6,533)
Total ............... 88,080 50.5 98,217 40.8 124,844 43.5 42,934 39.1 52,844 43.9
FINANCIAL INFORMATION
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--- page 315 ---
Our gross profit margin in mainland China was generally lower than those in the overseas markets in
2022, 2023 and the six months ended June 30, 2024, as we adopted pricing policies based on our
evaluation of the local market conditions, including the customer profiles and competitive landscape,
which resulted in a lower overall pricing level in the mainland China market.
Other Income and Gains
We recorded other income and gains of RMB27.3 million, RMB45.5 million, RMB43.8 million,
RMB23.1 million and RMB21.1 million in 2021, 2022, 2023 and the six months ended June 30, 2023 and
2024, respectively. Other income and gains primarily consist of government grants, investment income
from and fair value gains on financial assets at fair value through profit or loss (“FVTPL”), interest
income and foreign exchange gains, net. The following table sets forth a breakdown of our other income
and 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)
Other income
Interest income .................... 1,948 2,843 2,313 1,569 1,274
Government grants ................. 1 1,598 30,920 32,915 15,759 15,954
Investment income from financial assets
at FVTPL ...................... 7,045 7,391 2,657 2,059 647
Revenue from sales of raw materials (1) . 1,545 1,655 238 43 377
Others ........................... 2 5 8 3 6 1 4 1 9 1 5 3 1 5 6
Gains
Reversal of impairment losses on
financial and contract assets ( 2 ) ...... 3,178 — — — 1,067
Fair value gains on financial assets at
FVTPL ......................... 1,695 400 4,132 2,259 1,600
Gain on disposal of items of property,
plant and equipment .............. — 2———
Foreign exchange gains, net .......... — 1,892 1,157 1,278 —
Total ............................ 27,267 45,464 43,831 23,120 21,075
(1) Revenue from sales of raw materials primarily consist of the revenue from sales of obsolescent raw materials.
(2) Other gains in connection with the reversal of impairment losses on financial and contract assets in 2021 were
primarily related to the reversal of certain impairment provision previously recognized for trade receivables due from
one customer. Such trade receivables had previously been fully impaired prior to the Track Record Period, and we
recognized a partial loss reversal pursuant to the subsequent partial collection from such customer in 2021.
FINANCIAL INFORMATION
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--- page 316 ---
Government grants recognized under other income primarily represent subsidies granted by local
government authorities in connection with our research and development efforts, business achievements,
and our production facilities in Qingdao and Rizhao. Investment income from and fair value gains on
financial assets at FVTPL were primarily related to our structured deposits and certificate deposits. For
details, see “—Discussion of Certain Balance Sheet Items—Financial Assets at FVTPL.” The foreign
exchange gains, net during the Track Record Period were primarily related to our trade receivables
denominated in U.S. dollars.
The following table sets forth a breakdown of our government grants recognized under other income
by basis for granting during the Track Record Period.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
(RMB in thousands)
(unaudited)
Government grants
related to
– Production facilities in
Qingdao and Rizhao .... 2,469 15,225 21,752 10,869 9,137
– Research and development 8,945 15,266 10,331 4,708 5,944
– Talents .................. 1 0 4 3 7 8 5 6 3 1 8 2 4 8
– Others .................. 8 0 5 1 2 6 9 — 8 2 5
Total ..................... 11,598 30,920 32,915 15,759 15,954
Government grants recognized under other income increased from RMB11.6 million in 2021 to
RMB30.9 million in 2022, primarily due to (1) an increase in government grants related to research and
development efforts (including intellectual property) and business achievements, which primarily
consisted of several grants from Shenzhen government departments to support the growth of small and
medium-sized enterprises in high-tech sectors; and (2) the increase in government grants related to our
production facilities in Rizhao. Government grants recognized under other income further increased to
RMB32.9 million in 2023, primarily due to an increase in government grants related to our production
facilities in Rizhao. Government grants recognized under other income increased from RMB15.8 million
for the six months ended June 30, 2023 to RMB16.0 million for the six months ended June 30, 2024,
primarily due to an increase in government grants related to research and development efforts, in
connection with certain collaborative research and development projects.
FINANCIAL INFORMATION
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--- page 317 ---
Selling and Distribution Expenses
Our selling and distribution expenses primarily consist of (1) employee benefit expenses, which
primarily include the salaries, wages, bonuses and share-based payments expenses for our sales and
marketing personnel; (2) advertising and promotion expenses; (3) business development and traveling
expenses; (4) depreciation and amortization, which are primarily related to our property, plant and
equipment; (5) rental expenses, which primarily consist of the depreciation of right-of-use assets
representing our office leases; and (6) after-sales service fees. The following table sets forth a breakdown
of our selling and distribution expenses for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit expenses 39,068 61.4 57,044 63.9 69,020 54.2 33,266 58.8 41,405 66.3
Advertising and promotion
expenses ........... 8,530 13.4 8,439 9.5 17,609 13.8 5,701 10.1 4,542 7.3
Business development and
traveling expenses ..... 4,428 7.0 7,346 8.2 17,115 13.4 8,140 14.4 6,149 9.8
Depreciation and
amortization ......... 1,597 2.5 5,525 6.2 9,158 7.2 3,587 6.3 6,093 9.7
Rental expenses ........ 1,717 2.7 2,446 2.7 4,566 3.6 1,955 3.5 1,675 2.7
After-sales service fees . . . 4,662 7.3 3,087 3.5 3,033 2.4 676 1.2 389 0.6
Others
(1) ............. 3,628 5.7 5,387 6.0 6,888 5.4 3,235 5.7 2,266 3.6
Total ............... 63,630 100.0 89,274 100.0 127,389 100.0 56,560 100.0 62,519 100.0
(1) Others primarily include the cost of materials and consumables, delivery fees and utilities, offices and property
management expenses associated with our sales and marketing activities.
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our selling and distribution
expenses were RMB63.6 million, RMB89.3 million, RMB127.4 million, RMB56.6 million and RMB62.5
million, respectively, accounting for 36.5%, 37.0%, 44.4%, 51.5% and 51.9% of our revenue for the same
years/periods, respectively.
FINANCIAL INFORMATION
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--- page 318 ---
Administrative Expenses
Our administrative expenses primarily consist of (1) employee benefit expenses, which primarily
include the salaries, wages, bonuses and share-based payments expenses for our administrative
personnel; (2) professional service fees, which primarily include legal fees, audit fees, consulting service
fees and recruitment fees; (3) business development and traveling expenses; (4) depreciation and
amortization, which are primarily related to our property, plant and equipment; (5) rental expenses,
which primarily consist of the depreciation of right-of-use assets representing our office leases; (6)
utilities, office and property management expenses; and (7) tax and surcharges. The following table sets
forth a breakdown of our administrative expenses for the years/periods indicated.
Y ear ended December 31, Six months ended June 30,
2021 2022 2023 2023 2024
Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit expenses 10,314 39.0 29,409 59.4 32,364 61.0 13,078 54.7 17,957 48.4
Professional service fees . . 7,352 27.8 7,246 14.6 6,030 11.4 3,987 16.7 12,391 33.4
Business development and
traveling expenses ..... 1,497 5.7 1,835 3.7 2,219 4.2 1,363 5.7 1,487 4.0
Depreciation and
amortization ......... 1,558 5.9 4,329 8.7 4,709 8.9 1,673 7.0 2,265 6.1
Rental expenses ........ 1,785 6.8 1,712 3.5 938 1.7 1,145 4.8 86 0.2
Utilities, offices and
property management
expenses ........... 8 2 0 3 . 1 1,279 2.6 948 1.7 431 1.8 467 1.3
Tax and surcharges ...... 1,176 4.4 1,589 3.2 3,642 6.9 849 3.5 1,547 4.2
Others
(1) ............. 1,936 7.3 2,133 4.3 2,215 4.2 1,386 5.8 887 2.4
Total ............... 26,438 100.0 49,532 100.0 53,065 100.0 23,912 100.0 37,087 100.0
(1) Others primarily include the cost of materials and consumables, delivery fees and other third-party service fees
associated with our administrative activities.
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our administrative expenses
were RMB26.4 million, RMB49.5 million, RMB53.1 million, RMB23.9 million and RMB37.1 million,
respectively, representing 15.2%, 20.6%, 18.5%, 21.8% and 30.8% of our revenue for the same
years/periods, respectively.
FINANCIAL INFORMATION
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--- page 319 ---
Research and Development Expenses
Our research and development expenses primarily consist of (1) employee benefit expenses, which
primarily include the salaries, wages, bonuses and share-based payments expenses for our research and
development personnel; (2) professional service fees, which primarily consist of product certification and
testing fees and trademark and patent application fees; (3) materials and consumables for our research
and development initiatives; (4) depreciation and amortization, which are primarily related to our
property, plant and equipment; and (5) rental expenses, which primarily consist of the depreciation of
right-of-use assets representing our office leases. 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
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total Amount
%o f
Total
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit expenses 33,637 71.8 39,814 76.5 51,729 73.3 24,092 77.3 24,614 78.3
Professional service fees . . 5,534 11.8 3,427 6.6 3,992 5.7 1,339 4.3 1,525 4.9
Materials and consumables 3,057 6.5 4,201 8.1 8,614 12.2 3,224 10.3 2,013 6.4
Depreciation and
amortization ......... 1,559 3.3 1,679 3.2 1,709 2.4 568 1.8 1,317 4.2
Rental expenses ........ 1,768 3.8 1,499 2.9 1,438 2.1 924 3.0 1,300 4.1
Others
(1) ............. 1,318 2.8 1,434 2.7 3,045 4.3 1,034 3.3 654 2.1
Total ............... 46,873 100.0 52,054 100.0 70,527 100.0 31,181 100.0 31,423 100.0
(1) Others primarily include traveling expenses, delivery fees and utilities, offices and property management expenses
associated with our research and development activities.
In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our research and
development expenses were RMB46.9 million, RMB52.1 million, RMB70.5 million, RMB31.2 million
and RMB31.4 million, respectively, accounting for 26.9%, 21.6%, 24.6%, 28.4% and 26.1% of our
revenue for the same years/periods, respectively.
According to IAS 38.54, any expenditure on research or the research phase of an internal project
must be expensed as incurred. IAS 38.57 requires capitalization of expenditure incurred during the
development phase of an internal project, only when all of the criteria (as set out in the accounting
policies for research and development costs in Note 2.3 to the Accountants’ Report in Appendix I to this
prospectus) can be met. We determine that capitalization of development costs starts when the prototype
of the product is available and there are established demands for the product. There are only immaterial
development costs incurred after that point until the commercialization of the product, and therefore, no
research and development costs were capitalized for 2021, 2022, 2023 and the six months ended June 30,
2023 and 2024.
FINANCIAL INFORMATION
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--- page 320 ---
Other Expenses
Our other expenses primarily include impairment losses on financial and contract assets and
expense of sales of raw materials. We recorded other expenses of RMB3.0 million, RMB3.4 million,
RMB5.5 million, RMB4.6 million and RMB1.8 million in 2021, 2022, 2023 and the six months ended
June 30, 2023 and 2024, respectively.
Finance Costs
Our finance costs primarily consist of interest on bank loans, interest on lease liabilities and
accretion of interest expense. In 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, our
finance costs was RMB0.8 million, RMB2.0 million, RMB2.0 million, RMB1.4 million and RMB0.7
million, respectively.
Income Tax (Expense)/Credit
We recorded income tax expense of RMB16.5 million, income tax credit of RMB0.1 million and
income tax expense of RMB13.5 million in 2021, 2022 and 2023, respectively, and we recorded income
tax expenses of RMB0.1 million and RMB0.3 million in the six months ended June 30, 2023 and 2024,
respectively. We recognized income tax credit in 2022, primarily due to the increase in the deferred
income tax resulting from the temporary differences between tax base and carrying amount of our
financial assets at FVTPL and lease liabilities, as well as the decrease in taxable income such as relevant
taxable government grants in 2022. Our income tax primarily comprises current income tax.
The provision for corporate income tax in China is based on the statutory rate of 25% of the taxable
profits determined in accordance with the EIT Law. Our Company is qualified as a High-tech Enterprise
and was entitled to a preferential income tax rate of 15% during the Track Record Period. Shenzhen Qimo
Technology Co., Ltd., one of our PRC subsidiaries, is also qualified as a High-tech Enterprise and was
entitled to a preferential income tax rate of 15% in 2021 and 2022. The High-tech Enterprise qualification
is subject to review by the relevant tax authority every three years.
For details, see Note 10 to the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 321 ---
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 9.6% from RMB109.9 million in the six months ended June 30, 2023 to
RMB120.5 million in the six months ended June 30, 2024, primarily due to (1) the increase in revenue
from the sales of six-axis cobots; and (2) the increase in revenue from integrated cobots.
• Our revenue from six-axis cobots increased by 21.3% from RMB52.6 million in the six months
ended June 30, 2023 to RMB63.8 million in the six months ended June 30, 2024, primarily due
to the increase in the sales volume of our six-axis cobots driven by the launch of new six-axis
cobot products in mid 2023, which gained traction since then, as well as the steady increase in
the sales volume of other six-axis cobot products.
• Our revenue from four-axis cobots decreased by 9.2% from RMB40.5 million in the six months
ended June 30, 2023 to RMB36.8 million in the six months ended June 30, 2024, primarily due
to the decrease in the sales volume of certain four-axis cobot products, as we strategically
adjusted our product mix for education settings.
• Our revenue from integrated cobots increased by 22.7% from RMB12.0 million in the six
months ended June 30, 2023 to RMB14.7 million in the six months ended June 30, 2024,
primarily due to the increase in sales volume of certain integrated products, such as integrated
cobots for vocational training and palletizing, partially offset by the decrease in the ASP of
integrated cobots during the period.
Cost of sales
Our cost of sales remained relatively stable at RMB67.0 million and RMB67.6 million in the six
months ended June 30, 2023 and 2024, respectively.
Gross profit and gross profit margin
Our gross profit increased by 23.1% from RMB42.9 million in the six months ended June 30, 2023
to RMB52.8 million in the six months ended June 30, 2024, primarily due to the increase in gross profit
from six-axis cobots. Our gross profit margin increased from 39.1% in the six months ended June 30,
2023 to 43.9% in the six months ended June 30, 2024, primarily due to the increase in the gross profit
margin of our six-axis cobots for the reasons discussed below, as well as the impact of the decrease in
write-down of inventories in the six months ended June 30, 2024.
• Our gross profit from six-axis cobots (before write-down of inventories) increased by 27.6%
from RMB23.6 million in the six months ended June 30, 2023 to RMB30.2 million in the six
months ended June 30, 2024, primarily due to (1) the increase in revenue from six-axis cobots
for the reasons discussed above; and (2) the increase in gross profit margin of our six-axis
cobots (before write-down of inventories) from 44.9% in the six months ended June 30, 2023 to
47.3% in the six months ended June 30, 2024. The increase in gross profit margin was
primarily due to (i) the optimization of our supply chain, which led to lower procurement costs
of certain raw materials and components, such as reducers, motors and machine parts; and (ii)
the premium pricing of certain new six-axis cobots offered in 2024.
FINANCIAL INFORMATION
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• Our gross profit from four-axis cobots (before write-down of inventories) decreased by 5.7%
from RMB21.2 million in the six months ended June 30, 2023 to RMB20.0 million in the six
months ended June 30, 2024, primarily due to the decrease in revenue for the reasons discussed
above. Our gross profit margin of four-axis cobots (before write-down of inventories)
increased moderately from 52.4% in the six months ended June 30, 2023 to 54.4% in the six
months ended June 30, 2024, primarily due to the greater contribution of sales to overseas
markets for certain four-axis cobot products, for which we adopted a premium pricing in view
of the local market conditions.
• Our gross profit from integrated cobots (before write-down of inventories) increased by 16.5%
from RMB5.9 million in the six months ended June 30, 2023 to RMB6.9 million in the six
months ended June 30, 2024, primarily due to the increase in revenue from integrated cobots
for the reasons discussed above. The gross profit margin of our integrated cobots (before
write-down of inventories) decreased from 49.6% in the six months ended June 30, 2023 to
47.1% in the six months ended June 30, 2024, primarily because we incurred higher costs in
servicing a customer’s order for integrated cobots with a goal to integrate our products to such
customer’s production lines and ensure service quality, which led to a significant reduction in
gross profit for such order. Such customer order incurred higher costs, primarily in connection
with the personnel to install and configure the integrated cobots, which were newly launched,
to ensure their smooth operations and accumulate experience to further improve and promote
the implementation of such new products.
Other income and gains
Our other income and gains remained relatively stable at RMB23.1 million and RMB21.1 million in
the six months ended June 30, 2023 and 2024, respectively.
Selling and distribution expenses
Our selling and distribution expenses increased by 10.5% from RMB56.6 million in the six months
ended June 30, 2023 to RMB62.5 million in the six months ended June 30, 2024, primarily due to (1) an
increase in employee benefit expenses of RMB8.1 million, as a result of (i) an increase in share-based
payments expenses to our sales and marketing personnel of RMB2.8 million, and (ii) the recruitment of
certain sales and marketing personnel under multiple departments in the six months ended June 30, 2024,
such as those for branding, sector penetration and overseas markets; and (2) an increase in depreciation
and amortization expenses of RMB2.5 million, as we deployed more sample cobot products for marketing
purposes, partially offset by a decrease in business development and traveling expenses of RMB2.0
million, as we optimized relevant cost management, in particular for overseas trips.
Administrative expenses
Our administrative expenses increased by 55.1% from RMB23.9 million in the six months ended
June 30, 2023 to RMB37.1 million in the six months ended June 30, 2024, primarily (1) an increase in
employee benefit expenses of RMB4.9 million, primarily representing an increase in share-based
payments expenses of RMB4.1 million; and (2) an increase in professional service fees of RMB8.4
million due to the listing expenses incurred in 2024.
FINANCIAL INFORMATION
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Research and development expenses
Our research and development expenses remained relatively stable at RMB31.2 million and
RMB31.4 million in the six months ended June 30, 2023 and 2024, respectively.
Loss for the period
As a result of the foregoing, our loss for the period increased by 15.9% from RMB51.7 million in the
six months ended June 30, 2023 to RMB59.9 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 19.0% from RMB241.0 million in 2022 to RMB286.7 million in 2023,
primarily due to (1) the increase in revenue from the sales of six-axis cobots; and (2) the increase in
revenue from others, primarily attributable to the increase in the sales revenue of certain project-based
solutions due to the bounce-back from the impact of COVID-19 pandemic in 2022.
• Our revenue from six-axis cobots increased by 28.2% from RMB104.7 million in 2022 to
RMB134.3 million in 2023, primarily due to the increase in the sales volume of our six-axis
cobots driven by the expanded functions and use cases of our six-axis cobots, such as those for
3C and other industrial manufacturing settings, to capture the robust customer demand.
• Our revenue from four-axis cobots remained relatively stable at RMB100.9 million and
RMB99.5 million in 2022 and 2023, respectively.
• Our revenue from integrated cobots increased by 8.6% from RMB31.6 million in 2022 to
RMB34.3 million in 2023, as we sold proportionately more high-value integrated cobot
products in 2023, such as integrated cobots for vocational training and welding that enhanced
our ASP.
Cost of sales
Our cost of sales increased by 13.4% from RMB142.8 million in 2022 to RMB161.9 million in 2023,
primarily due to (1) an increase in raw material costs of RMB11.4 million, primarily due to the increase
in the sales volume of six-axis cobots; (2) an increase in overhead costs of RMB2.4 million as we scaled
up our production through our in-house facilities; and (3) an increase in the write-down of inventories of
RMB8.4 million in connection with certain early cobot models, partially offset by the decrease in
outsourced production costs of RMB0.9 million.
Gross profit and gross profit margin
Our gross profit increased by 27.1% from RMB98.2 million in 2022 to RMB124.8 million in 2023,
primarily due to the increase in gross profit from six-axis cobots and four-axis cobots. Our gross profit
margin increased from 40.8% in 2022 to 43.5% in 2023, primarily due to the increase in the gross profit
margin of our six-axis cobots and four-axis cobots due to the reasons discussed below, partially offset by
the impact of the increase in write-down of inventories in 2023.
FINANCIAL INFORMATION
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• Our gross profit from six-axis cobots (before write-down of inventories) increased by 63.6%
from RMB38.7 million in 2022 to RMB63.4 million in 2023, primarily due to (1) the increase
in revenue from six-axis cobots for the reasons discussed above; and (2) the increase in gross
profit margin of our six-axis cobots (before write-down of inventories) from 37.0% in 2022 to
47.2% in 2023. The increase in gross profit margin was primarily due to (i) the improvement in
our cost management and greater economies of scale of our production activities in 2023; and
(ii) the lower gross profit margin of certain newly launched six-axis cobots for 3C
manufacturing settings which we offered for trial purpose in 2022.
• Our gross profit from four-axis cobots (before write-down of inventories) increased by 7.2%
from RMB50.8 million in 2022 to RMB54.5 million in 2023, primarily due to the increase in
gross profit margin of four-axis cobots (before write-down of inventories) from 50.4% in 2022
to 54.8% in 2023, as a result of the decrease in raw material costs of certain four-axis cobot
products.
• Our gross profit from integrated cobots (before write-down of inventories) increased by 11.2%
from RMB16.4 million in 2022 to RMB18.2 million in 2023, primarily due to the increase in
revenue from integrated cobots. The gross profit margin of our integrated cobots (before
write-down of inventories) remained relatively stable at 51.8% and 53.1% in 2022 and 2023,
respectively.
Other income and gains
Our other income and gains remained relatively stable at RMB45.5 million and RMB43.8 million in
2022 and 2023, respectively.
Selling and distribution expenses
Our selling and distribution expenses increased by 42.7% from RMB89.3 million in 2022 to
RMB127.4 million in 2023, primarily due to (1) an increase in employee benefit expenses of RMB12.0
million, as a result of (i) an increase in share-based payments expenses to our sales and marketing
personnel of RMB3.9 million, and (ii) the addition of 36 sales personnel for overseas markets in 2023; (2)
an increase in advertising and promotion expenses of RMB9.2 million, driven by the increase in our
advertising and other promotional initiatives for overseas business expansion; (3) an increase in business
development and traveling expenses of RMB9.8 million, primarily due to the increase in our business
expansion initiatives in overseas markets; and (4) an increase in depreciation and amortization expenses
of RMB3.6 million, as we deployed more sample cobot products for marketing purposes. Our primary
business expansion activities in 2023 included participating in industry-related exhibitions and engaging
in advertising, sponsorship and online marketing campaigns. For instance, we participated in several
industry exhibitions in Japan, the United States and Europe in 2023. As we established our overseas
subsidiaries and enhanced our efforts to penetrate relevant overseas markets in 2023, we believe the
increase in relevant headcount and compensation to our sales personnel for overseas markets is
fundamental to establishing our local practice, building up our local presence and fostering our direct
connections with the relevant markets.
Administrative expenses
Our administrative expenses increased by 7.1% from RMB49.5 million in 2022 to RMB53.1 million
in 2023, primarily due to (1) an increase in employee benefit expenses of RMB3.0 million, primarily due
to an increase in the average salary of our administrative personnel; and (2) an increase in tax and
surcharges of RMB2.1 million, primarily related to value-added tax surcharges and property tax.
FINANCIAL INFORMATION
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Research and development expenses
Our research and development expenses increased by 35.5% from RMB52.1 million in 2022 to
RMB70.5 million in 2023, primarily due to (1) an increase in employee benefit expenses of RMB11.9
million, primarily due to (i) an increase in share-based payments expenses to our research and
development personnel of RMB4.7 million, and (ii) an increase in the headcount and average salary of
our research and development personnel; and (2) an increase in materials and consumables of RMB4.4
million to meet the needs of our research and development activities. Our research and development
activities in 2023 primarily included (1) developing new cobot products, such as Magician E6 and new
CR Series cobots; (2) upgrading the software and platforms for our cobots, such as those for controlling
our six-axis cobots and four-axis cobots; (3) developing process toolkits, such as palletizing and welding;
(4) continuing our research into cobot-related technologies, such as SafeSkin; and (5) continuing the
enhancement of existing cobot products. We have 157 research and development personnel as of
December 31, 2023, which increased moderately from 147 as of December 31, 2022. We believe that such
increased investment into our research and development personnel is necessary in 2023, in order to
support the above-mentioned various research and development initiatives in 2023 and harness our
research and development capabilities in a sustainable manner.
Income tax (expense)/credit
We recorded income tax credit of RMB0.1 million and income tax expense of RMB13.5 million in
2022 and 2023, respectively, primarily in relation to the taxable income of certain PRC subsidiaries
arising from the government grants received in 2023.
Loss for the year
As a result of the foregoing, our loss for the year increased by 96.8% from RMB52.5 million in 2022
to RMB103.3 million in 2023.
Y ear Ended December 31, 2022 Compared to Y ear Ended December 31, 2021
Revenue
Our revenue increased by 38.3% from RMB174.3 million in 2021 to RMB241.0 million in 2022,
primarily due to the increase in revenue from the sales of six-axis cobots and integrated cobots.
• Our revenue from six-axis cobots increased significantly from RMB26.0 million in 2021 to
RMB104.7 million in 2022, primarily due the increase in the sales volume of our six-axis
cobots driven by the launch of new six-axis cobot products in late 2021, which gained traction
in 2022.
• Our revenue from four-axis cobots decreased by 15.9% from RMB119.9 million in 2021 to
RMB100.9 million in 2022, as we concluded one major contract in 2021.
• Our revenue from integrated cobots increased by 96.3% from RMB16.1 million in 2021 to
RMB31.6 million in 2022, primarily due to the increase in the sales volume and ASP of our
integrated cobots driven by our product development efforts, in particular integrated cobots for
vocational training, as well as the increase in market demand.
FINANCIAL INFORMATION
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Cost of sales
Our cost of sales increased by 65.6% from RMB86.2 million in 2021 to RMB142.8 million in 2022,
primarily due to (1) an increase in raw material costs of RMB44.2 million in line with the general
increase of the sales volume of our six-axis cobots, which have more components; and (2) an increase in
overhead costs of RMB7.4 million and an increase in direct labor costs of RMB3.1 million, partially
offset by a decrease in outsourced production costs of RMB4.0 million, as we shifted the production of
our cobots to our in-house facilities in 2022.
Gross profit and gross profit margin
Our gross profit increased by 11.5% from RMB88.1 million in 2021 to RMB98.2 million in 2022,
primarily due to the increase in gross profit from six-axis cobots and integrated cobots. Our gross profit
margin decreased from 50.5% in 2021 to 40.8% in 2022, primarily due to the decrease in gross profit
margin of six-axis cobots and four-axis cobots. We shifted the cobot production to our in-house facilities
in 2022, which resulted in temporary cost fluctuations in that year that reduced the gross profit margin of
six-axis cobots and four-axis cobots. Specifically, during the period of initiating our in-house production
activities, we had a relatively low utilization rate of our production facilities in Rizhao at 58.6% and
32.9% for six-axis cobots and four-axis cobots in 2022, respectively, compared with that of 61.3% and
37.8% in 2023, respectively. As a result, we incurred higher overhead costs, direct labor costs and
relevant raw material costs, which were not fully offset by the decrease in outsourced manufacturing
costs in 2022.
• Our gross profit from six-axis cobots (before write-down of inventories) increased
significantly from RMB11.5 million in 2021 to RMB38.7 million in 2022, primarily driven by
the significant increase in revenue from six-axis cobots for the reasons discussed above,
partially offset by the decrease in gross profit margin of six-axis cobots (before write-down of
inventories) from 44.1% in 2021 to 37.0% in 2022. The decrease in gross profit margin was
primarily due to (1) the shift of cobot production to our in-house facilities in 2022, which
resulted in temporary cost fluctuations; and (2) the lower gross profit margin of certain newly
launched six-axis cobots for 3C manufacturing settings which we offered for trial purpose in
2022.
• Our gross profit from four-axis cobots (before write-down of inventories) decreased by 30.2%
from RMB72.8 million in 2021 to RMB50.8 million in 2022, primarily driven by (1) the
decrease in revenue from four-axis cobots for the reasons discussed above; and (2) the decrease
in gross profit margin of four-axis cobots (before write-down of inventories) from 60.8% in
2021 to 50.4% in 2022. The decrease in gross profit margin was primarily due to (i) the
premium pricing of certain four-axis product in 2021, as we met the requirements of a specific
customer; and (ii) the shift of cobot production to our in-house facilities in 2022, which
resulted in temporary cost fluctuations.
• Our gross profit from integrated cobots (before write-down of inventories) increased
significantly from RMB5.3 million in 2021 to RMB16.4 million in 2022, primarily driven by
(1) the increase in revenue from integrated cobots for the reasons discussed above; and (2) the
increase in gross profit margin (before write-down of inventories) from 33.1% in 2021 to
51.8% in 2022, primarily driven by the increase in the sales volume of high-value products,
such as certain integrated cobots for vocational training that enhanced our ASP.
FINANCIAL INFORMATION
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Other income and gains
Our other income and gains increased by 66.7% from RMB27.3 million in 2021 to RMB45.5 million
in 2022, primarily due to an increase in government grants of RMB19.3 million recognized in connection
with our research and development efforts, business achievements, and our production facilities in
Qingdao and Rizhao, partially offset by a decrease in the reversal of impairment losses of financial and
contract assets from RMB3.2 million in 2021 to nil in 2022.
Selling and distribution expenses
Our selling and distribution expenses increased by 40.3% from RMB63.6 million in 2021 to
RMB89.3 million in 2022, primarily due to (1) an increase in employee benefit expenses of RMB18.0
million, primarily due to (i) an increase in the headcount and average salary of our sales and marketing
personnel, and (ii) an increase in share-based payments expenses to our sales personnel of RMB2.5
million; (2) an increase in business development and traveling expenses of RMB2.9 million in connection
with our business expansion initiatives; and (3) an increase in depreciation and amortization expenses of
RMB3.9 million, as we deployed more sample cobot products for marketing purposes.
Administrative expenses
Our administrative expenses increased by 87.4% from RMB26.4 million in 2021 to RMB49.5
million in 2022, primarily due to an increase in employee benefit expenses of RMB19.1 million, as a
result of (1) a change in share-based payments expenses to our administrative personnel of RMB12.6
million, primarily due to the increase in share-based payments expenses in 2022 and the forfeiture of
certain previously granted awards due to termination of employment in 2021; and (2) an increase in the
headcount and average salary of our administrative personnel.
Research and development expenses
Our research and development expenses increased by 11.1% from RMB46.9 million in 2021 to
RMB52.1 million in 2022, primarily due to (1) an increase in employee benefit expenses of RMB6.2
million, primarily due to an increase in the average salary of our research and development personnel;
and (2) an increase in materials and consumables of RMB1.1 million to meet the needs of our research
and development activities, partially offset by a decrease in professional service fees of RMB2.1 million,
generally in line with the level of our demand for the relevant services.
Income tax (expense)/credit
We recorded income tax expense of RMB16.5 million and income tax credit of RMB0.1 million in
2021 and 2022, respectively, primarily in relation to the taxable income of certain PRC subsidiaries
arising from the government grants received in 2021.
Loss for the year
As a result of the foregoing, our loss for the year increased by 25.7% from RMB41.8 million in 2021
to RMB52.5 million in 2022.
FINANCIAL INFORMATION
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DISCUSSION OF CERTAIN BALANCE SHEET ITEMS
The following table sets forth our consolidated statements 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 ............... 107,396 194,448 189,770 185,422
Right-of-use assets ........................ 25,314 36,094 33,831 33,838
Other intangible assets ..................... 2,002 3,156 2,255 2,984
Deferred tax assets ........................ 5 1 0 6 1,902 2,427
Investment in an associate ................... 1,132 — — —
Prepayments, deposits and other receivables .... 1,441 829 5,278 7,470
Trade receivables .......................... 1,392 828 — —
Total non-current assets ................... 138,682 235,461 233,036 232,141
Current assets
Inventories ............................... 70,901 131,843 141,520 155,296
Trade and bills receivables .................. 15,046 39,608 41,608 33,040
Contract assets ............................ 2 2 8 8 2 3 2 5 4 1 6
Prepayments, deposits and other receivables .... 17,594 21,074 30,844 28,413
Financial assets at FVTPL .................. 272,720 190,400 174,383 145,983
Restricted bank deposits .................... 8 2 1 9,189 2,210 821
Cash and cash equivalents ................... 149,093 297,763 110,962 73,033
Total current assets ....................... 526,403 689,959 501,852 437,002
Current liabilities
Trade and bills payables .................... 18,275 30,894 30,907 29,707
Other payables and accruals ................. 94,176 183,368 41,792 39,291
Financial liabilities at FVTPL ............... — — 8 0 —
Interest-bearing bank loans .................. — 21,619 57,790 69,233
Lease liabilities ........................... 3,108 5,016 4,874 4,415
Contract liabilities ......................... 27,076 35,578 10,939 10,561
Tax payable .............................. 38,761 38,146 14,415 530
Total current liabilities .................... 181,396 314,621 160,797 153,737
Net current assets ........................ 345,007 375,338 341,055 283,265
Total assets less current liabilities ........... 483,689 610,799 574,091 515,406
Non-current liabilities
Deferred income .......................... 158,993 143,466 189,569 177,814
Deferred tax liabilities ...................... 2 7 2 1 0 5 5 9 8 4 5
Lease liabilities ............................ 5,283 5,731 4,533 4,832
Provision ................................. 3,490 6,558 6,127 4,983
Total non-current liabilities ................ 168,038 155,765 200,788 188,474
Net assets ................................ 315,651 455,034 373,303 326,932
Equity
Equity attributable to owners of the parent ......
Share capital .............................. — 360,000 360,000 360,000
Paid-in capital ............................ 9,538 — — —
Reserves ................................. 306,113 95,034 13,303 (33,068)
315,651 455,034 373,303 326,932
Non-controlling interests .................... ————
Total equity .............................. 315,651 455,034 373,303 326,932
FINANCIAL INFORMATION
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Property, Plant and Equipment
Our property, plant and equipment primarily consist of buildings, electronic equipment, furniture
and fixtures, construction in progress, and leasehold improvements. The following table sets forth the
carrying amount of our property, plant and equipment as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Buildings .................... — 138,884 134,638 132,182
Furniture and fixtures .......... 2,601 7,663 5,868 5,104
Motor vehicles ................ 9 2 4 6 4 5 3 9 3 2 6 7
Electronic equipment and others . 13,740 39,874 41,687 38,412
Leasehold improvements ....... 7 0 4 5,108 4,809 4,568
Construction in progress ....... 89,427 2,274 2,375 4,889
Total ........................ 107,396 194,448 189,770 185,422
Our property, plant and equipment increased from RMB107.4 million as of December 31, 2021 to
RMB194.4 million as of December 31, 2022, primarily due to (1) the increase in buildings due to (i) the
transfer of certain construction in progress as of December 31, 2021 into buildings in 2022 in accordance
with the construction progress of our production facilities in Rizhao and Qingdao, and (ii) the acquisition
of buildings in Qingdao as production facilities; (2) the additions to electronic equipment and others,
primarily due to the increase in sample cobots transferred from our inventories to support our marketing
initiatives; and (3) the increase in leasehold improvements related to the renovations of our offices and
production facilities, partially offset by the depreciation of our property, plant and equipment and the
decrease in construction in progress. Our property, plant and equipment remained relatively stable at
RMB189.8 million as of December 31, 2023. Our property, plant and equipment remained relatively
stable at RMB185.4 million as of June 30, 2024.
Right-of-use Assets
Our right-of-use assets primarily consist of buildings and leasehold land. Our right-of-use assets
increased from RMB25.3 million as of December 31, 2021 to RMB36.1 million as of December 31, 2022,
primarily due to (1) the renewal of our office leases; and (2) the increase in leasehold land in Qingdao,
partially offset by the depreciation of right-of-use assets. Our right-of-use assets decreased to RMB33.8
million as of December 31, 2023, primarily due to the depreciation of right-of-use assets, partially offset
by the impact of certain new office leases. Our right-of-use assets remained relatively stable at RMB33.8
million as of June 30, 2024.
Intangible Assets
Our intangible assets primarily consist of software. Our intangible assets increased from RMB2.0
million as of December 31, 2021 to RMB3.2 million as of December 31, 2022, primarily due to the
software procurement according to our business needs, partially offset by the amortization of software in
2022. Other intangible assets then decreased to RMB2.3 million as of December 31, 2023, primarily due
to the amortization of software in 2023. Other intangible assets increased to RMB3.0 million as of June
30, 2024, primarily due to our software procurement, partially offset by the amortization of software.
FINANCIAL INFORMATION
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Prepayments, Deposits and Other Receivables
Our prepayments, deposits and other receivables primarily consist of (1) value-added tax
recoverable; (2) prepayments, which primarily consist of prepayments for raw materials and third-party
services for our ordinary business operations; and (3) other receivables and deposit. The following table
sets forth the details of our prepayments, deposits and other receivables as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Current
Value-added tax recoverable .... 5,143 10,659 15,949 10,930
Deferred listing expenses ....... — — — 2,102
Prepayments .................. 7,482 7,480 12,339 13,387
Other receivables and deposit (1) . 5,684 3,308 2,987 2,386
Less: impairment of other
receivables and deposit ....... (715) (373) (431) (392)
17,594 21,074 30,844 28,413
Non-current
Value-added tax recoverable .... — — 4,090 3,997
Other receivables and deposits (1) . 783 535 1,076 1,557
Prepayments for property, plant
and equipment .............. 6 5 8 2 9 4 1 1 2 1,916
1,441 829 5,278 7,470
(1) Other receivables primarily consist of retention money and staff loans.
Our prepayments, deposits and other receivables increased from RMB19.0 million as of December
31, 2021 to RMB21.9 million as of December 31, 2022, primarily due to the increase in value-added tax
recoverable arising from the construction of our production facilities in Rizhao, partially offset by the
decrease in other receivables and deposit. Our prepayments, deposits and other receivables then increased
to RMB36.1 million as of December 31, 2023, primarily due to (1) an increase in value-added tax
recoverable arising from the construction of our production facilities in Qingdao and Rizhao; and (2) an
increase in prepayments, primarily due to the increase in our procurement of raw materials to meet our
growing business needs. Our prepayments, deposits and other receivables remained relatively stable at
RMB35.9 million.
FINANCIAL INFORMATION
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Inventories
We had inventories of RMB70.9 million, RMB131.8 million, RMB141.5 million and RMB155.3
million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. The following table sets
forth the details of our inventories as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Raw materials ................ 33,991 60,624 50,680 48,705
Work in process ............... 5,828 16,898 27,554 26,218
Finished goods ................ 20,647 34,414 53,895 72,798
Goods in transit ............... 10,435 19,907 9,391 7,575
Total ........................ 70,901 131,843 141,520 155,296
Our inventories increased from RMB70.9 million as of December 31, 2021 and RMB131.8 million
as of December 31, 2022 primarily due to (1) an increase in raw materials as we enhanced our
procurement in light of the production needs of our own production facilities in 2022; (2) an increase in
work in process as we shifted the production of our cobots to our own facilities in 2022; and (3) an
increase in finished goods and goods in transit primarily due to our business expansion and the increase
in our product shipment. Our inventories further increased to RMB141.5 million as of December 31,
2023, primarily due to the increase in finished goods to meet the needs of our overseas business
expansion, including the scale-up of our overseas warehouses, partially offset by a decrease in goods in
transit as of the end of relevant periods. Our inventories then increased to RMB155.3 million as of June
30, 2024, primarily due to the increases in finished goods to meet the needs of our overseas business
expansion, including our overseas warehouses.
The following table sets forth our inventory turnover days for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
Inventory turnover days (1) ...... 2 4 8 2 5 6 3 0 4 3 9 5
(1) The inventory turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of
inventories in that period by cost of sales for the corresponding period and then multiplying by the number of days in
that period (i.e., 360 days for a given year and 180 days for a six-month period).
We had relatively long inventory turnover days during the Track Record Period, as we have not
achieved a large business scale and have maintained a wide spectrum of cobot products and related
materials to effectively meet the needs of our customers. Our inventory turnover days were relatively
stable at 248 and 256 days in 2021 and 2022, respectively. Our inventory turnover days increased to 304
days in 2023, as we expanded our product lines and increased our stock for overseas business expansion.
In particular, we established overseas warehouses in 2023 for inventory storage and faster delivery to
meet the needs of local customers. Our inventory turnover days further increased to 395 days for the six
months ended June 30, 2024 primarily due to an increase in finished products of our latest CR series
products in anticipation of increased demand from overseas markets, as well as the impact of low season
for revenue recognition due to seasonality factors, which further prolonged the turnover days for the six
months ended June 30, 2024.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our inventories as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Within 1 year ...................... 74,162 135,052 137,338 145,874
1 to 2 years ....................... 4,876 7,512 22,258 31,813
2 to 3 years ....................... 3 1 9 2,283 1,949 4,057
Over 3 years ...................... 4 7 1 2 1 1,688 365
79,404 144,968 163,233 182,109
Less: Write-down of inventories ..... (8,503) (13,125) (21,713) (26,813)
Total ............................. 70,901 131,843 141,520 155,296
Our inventories increased continually from RMB79.4 million as of December 31, 2021 to
RMB182.1 million as of June 30, 2024, primarily due to the enlarged scale of business, including the
increase in revenue and product types. To support our rapid development, we stabilized our supply chain
by (1) constructing our own production facilities and gradually replacing outsourced manufacturing with
in-house production since 2022, and (2) stocking up key raw materials such as some harmonic reducers
and PCBA for different types of products. These factors increased the turnover days of inventories, with
the proportion of inventories with an age of more than 1 year to the gross inventory balance increased
from 7% to 20%. Despite such increase, our management monitored our inventories carefully and kept
the long-aged inventory in a relatively low level. The proportion of inventories with an age of more than
2 years was less than 3% which generally aligns with our management’s expectations.
In particular, we have considered the following factors to determine the write-down provision of our
inventories: (1) during the Tracking Record Period, our gross profit margin remained consistently above
40%. Raw materials generally have no expiration date and the upgrades of our products usually take long
period. In light of such nature of our raw materials and products, as well as the increasing market demand,
we consider that there is no significant recoverability issue for inventories; and (2) in accordance with
IAS 2, inventories are stated at the lower of cost and net realizable value (“NRV”). Our management
performed NRV tests at the end of each Track Record Period. When estimating NRV , we consider the
following: (a) the most reliable evidence available at the time the estimates are made; (b) fluctuation of
price or cost directly relating to events occurring after the end of the period to the extent that such events
confirm the conditions existing at the end of the period; and (c) the purpose for which the inventory is
held.
We also reviewed the condition of the inventories at the end of each reporting period and identified
obsolete and defective products. For those products, we estimated NRV on an item-by-item basis,
according to expected sales orders and current market conditions. For inventories under normal
conditions, NRV is estimated on product-type basis and provisions are made for the excess of cost over
the NRV .
Bases on the above considerations, as of December 31, 2021, 2022 and 2023 and June 30, 2024, the
write down provision of inventory was RMB8.5 million, RMB13.1 million, RMB21.7 million and
RMB26.8 million respectively, representing 11%, 9%, 13% and 15% of costs of inventories. Our
management believes that sufficient provision has been made at the end of each of the reporting periods.
FINANCIAL INFORMATION
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As of October 31, 2024, RMB73.9 million or approximately 47.6% of our inventories as of June 30,
2024 had been subsequently consumed or sold.
Trade and Bills Receivables
We had trade and bills receivables of RMB16.4 million, RMB40.4 million, RMB41.6 million and
RMB33.0 million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. The
following table sets forth the details of our trade and bills receivables as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Trade receivables
Third parties ................ 25,764 50,636 47,443 36,378
Less: impairment of trade
receivables ........... (9,347) (10,280) (6,876) (5,728)
Trade receivables, net ......... 16,417 40,356 40,567 30,650
Bills receivables .............. 2 1 8 0 1,041 2,390
Total ........................ 16,438 40,436 41,608 33,040
Analyzed into:
Current portion .............. 15,046 39,608 41,608 33,040
Non-current portion .......... 1,392 828 — —
The gross amount of our trade receivables increased from RMB25.8 million as of December 31,
2021 to RMB50.6 million as of December 31, 2022, generally in line with our business expansion and
sales growth. The gross amount of our trade receivables decreased slightly to RMB47.4 million as of
December 31, 2023, and further to RMB36.4 million as of June 30, 2024, primarily due to normal
fluctuations in our sales activities.
The credit period with our customers for sales on credit is generally 30 to 90 days. The following
table sets forth our trade receivables turnover days for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
Trade receivables turnover
days (1) ..................... 2 6 4 2 5 1 5 3
(1) The trade receivables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance
of our trade receivables in that period by revenue for the corresponding period and then multiplying by the number of
days in that period (i.e., 360 days for a given year and 180 days for a six-month period).
Our trade receivables turnover days increased during the Track Record Period, as we continued to
grow our customer base and granted credit periods to accommodate customers’ payment practices,
mainly for overseas customers.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our trade receivables based on invoice date and
net of loss allowance as of the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Within one year ............... 15,888 37,686 34,907 28,188
One to two years .............. 3 5 0 2,668 5,456 2,118
Two to three years ............. 1 7 9 2 2 0 4 3 4 4
Total ........................ 16,417 40,356 40,567 30,650
As of October 31, 2024, RMB22.1 million or approximately 60.8% of our trade receivables as of
June 30, 2024 had been settled. Our management believes that there is no material recoverability issue for
our trade receivables, and based on our subsequent settlement status, sufficient provision has been made
at the end of each of the reporting periods.
Impairment provision of trade receivables
We perform an impairment analysis at the end of each period using a provision matrix to measure the
Expected Credit Losses (“ECLs”) for our trade receivables and assess our credit risk exposure. As of
December 31, 2021, 2022 and 2023 and June 30, 2024, we recorded loss allowance for impairment of
trade receivables of RMB9.3 million, RMB10.3 million, RMB6.9 million and RMB5.7 million,
respectively. We take the simplified approach to calculate the ECLs on our trade receivables and
determine the ECLs on trade receivables by using a provision matrix analysis, based on days past due for
groupings of various customer segments with similar loss patterns. The provision matrix is initially based
on our historical observed default rates. We will calibrate the matrix to adjust the historical credit loss
experience with forward-looking information. At each reporting date, we update the historical observed
default rates and analyze changes in the forward-looking estimates. For details of our impairment
analysis for trade receivables, including our credit risk exposure on trade receivables using a provision
matrix, see Note 19 to the Accountants’ Report in Appendix I to this prospectus.
Financial Assets at FVTPL
Our financial assets at FVTPL during the Track Record Period primarily represented structured
deposits and certificate deposits that we purchased from major reputable banks in China. All of our
financial assets at FVTPL during the Track Record Period were principal-guaranteed. The interest rate of
such financial assets at FVTPL during the Track Record Period ranged from 2.85% to 3.60% per annum,
with a maturity profile ranging from one month to three years. We recorded a decreasing amount of
financial assets at FVTPL at RMB272.7 million, RMB190.4 million, RMB174.4 million and RMB146.0
million as of December 31, 2021, 2022 and 2023 and June 30, 2024, primarily due to the redemption of
relevant deposits, partially offset by new purchases.
Our financial assets at FVTPL are measured using level 2 of the fair value hierarchy, i.e., based on
valuation techniques for which the lowest level input that is significant to the fair value measurement is
observable, either directly or indirectly. For details of the fair value measurement of our financial assets
at FVTPL, see Note 21 to the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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According to our internal policies, we may purchase principal-guaranteed products to preserve our
funds in a prudent and flexible manner, but we may not purchase illegal or irregular high-interest
products. Our finance department will review our existing fund status and our budgets to determine the
amount that may be deployed in purchasing relevant products. Our finance department will then work
with the relevant banks to develop the terms of such products, which shall then be reported to our
financial director that has experience in reviewing similar products and oversees our overall financial
status, for approval. According to our Articles of Association, our Board shall also review and approve
the relevant transaction(s) if the value of such transaction(s) exceed certain numerical benchmarks. The
investment in such products after the Listing will be subject to compliance with Chapter 14 of the Listing
Rules.
Restricted Bank Deposits
Our restricted bank deposits during the Track Record Period were primarily related to (1) bank
guarantees and other escrow payments that we received from certain customers prior to their inspection
and/or acceptance of relevant products; and (2) the deposits for the construction projects of our
production facilities. The balance of our restricted bank deposits increased from RMB0.8 million as of
December 31, 2021 to RMB9.2 million as of December 31, 2022, primarily due to (1) certain bank
deposits restricted in 2022 as a result of a commercial dispute, all of which was subsequently released in
2023; and (2) the increase in escrow payment from certain customer, which was subsequently released in
2023. Our restricted bank deposits then decreased to RMB2.2 million as of December 31, 2023, primarily
due to the above-mentioned releases of restricted bank deposits. Our restricted bank deposits further
decreased to RMB0.8 million as of June 30, 2024, primarily due to the release of escrow payment from
certain customer.
Trade and Bills Payables
We had trade and bills payables of RMB18.3 million, RMB30.9 million, RMB30.9 million and
RMB29.7 million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. The increase
in our trade payables from that as of December 31, 2021 to that as of December 31, 2022 was primarily in
connection with the increase in procurement as we scaled up our production activities.
Our suppliers typically grant us credit periods for sales on credit of no more than three months. The
following table sets forth our trade payables turnover days for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
Trade payables turnover days (1) . 8 86 26 98 1
(1) The trade payables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of
trade payables in that period by cost of sales for the corresponding period and then multiplying by the number of days
in that period (i.e., 360 days for a given year and 180 days for a six-month period).
Our trade payables turnover days were 88, 62, 69 and 81 days in 2021, 2022, 2023 and the six
months ended June 30, 2024, respectively, which were within our credit period.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our trade payables based on invoice dates as of
the dates indicated.
As of December 31, As of June 30,
20242021 2022 2023
(RMB in thousands)
Within one year ................ 18,080 30,685 30,907 29,216
Over one year ................. 1 9 5 2 0 9 — 4 9 1
Total ........................ 18,275 30,894 30,907 29,707
As of October 31, 2024, RMB28.6 million or approximately 96.2% of our trade payables as of June
30, 2024 had been settled.
Other Payables and Accruals
Our other payables and accruals during the Track Record Period primarily consisted of payroll
payable, other tax payables and payables for non-current assets. The following table sets forth the details
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 payable ............... 19,106 24,523 25,314 17,433
Other tax payables ............. 3,260 11,387 3,113 3,009
Payables for non-current
assets (1) .................... 66,230 139,330 3,702 3,936
Others ........................ 5,580 8,128 9,663 14,913
Total ........................ 94,176 183,368 41,792 39,291
(1) Payables for non-current assets primarily represent payables for property, plant and equipment. The balance as of
December 31, 2022 included a payable of RMB70.8 million to Qingdao local government for asset acquisition. For
details, see “—Capital Expenditures and Commitments—Capital Expenditures.”
Our other payables and accruals increased from RMB94.2 million as of December 31, 2021 to
RMB183.4 million as of December 31, 2022, primarily due to (1) an increase in payables for non-current
assets in connection with our procurement for the construction project of our production facilities in
Rizhao and Qingdao; (2) an increase in payroll payable due to the increase in our employee headcount
and compensation level; and (3) an increase in other tax payables as a result of the fluctuations of
value-added tax payable in the ordinary course of our sales activities.
Our other payables and accruals then decreased to RMB41.8 million as of December 31, 2023,
primarily due to (1) a decrease in payables for non-current assets as the construction of our production
facilities in Rizhao and Qingdao was completed and the relevant amount was settled; and (2) a decrease in
other tax payables as a result of the fluctuations of value-added tax payable in the ordinary course of our
sales activities.
FINANCIAL INFORMATION
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Our other payables and accruals further decreased to RMB39.3 million as of June 30, 2024,
primarily due to the decrease in payroll payable as a result of the payment of bonuses to employees,
partially offset by an increase in others representing certain listing expenses payable.
As of October 31, 2024, RMB28.5 million or approximately 72.6% of our other payables and
accruals as of June 30, 2024 had been subsequently settled.
Contract Liabilities
Our contract liabilities primarily represent the advance consideration received from our customers
before we transfer the related goods or services. Our contract liabilities increased from RMB27.1 million
as of December 31, 2021 to RMB35.6 million as of December 31, 2022 and then decreased to RMB10.9
million as of December 31, 2023, as the delivery and revenue recognition progress of our sales contracts
varied, which resulted in fluctuations in our contract liabilities as of the end of the relevant periods. Our
contract liabilities remained relatively stable at RMB10.6 million as of June 30, 2024.
As of October 31, 2024, RMB8.4 million or approximately 79.6% of our contract liabilities as of
June 30, 2024 had been subsequently recognized as revenue.
Tax Payable
Our tax payable during the Track Record Period represents the income tax payable for the taxable
income of certain PRC subsidiaries arising from government grants received. Our tax payable remained
relatively stable at RMB38.8 million and RMB38.1 million as of December 31, 2021 and 2022,
respectively. Our tax payable then decreased to RMB14.4 million as of December 31, 2023, as we paid for
certain tax payable in 2023, partially offset by the new income tax obligations in 2023. Our tax payable
further decreased to RMB0.5 million as of June 30, 2024, as we paid for certain tax payable.
Deferred Income
Deferred income during the Track Record Period represents government grants, which were
primarily received for our research and development and production projects in cobot-related areas and
are credited to profit or loss on a straight-line basis over the expected lives of the related assets or
recognized as income on a systematic basis over the periods that the costs, which they are intended to
compensate, are expensed. We recorded deferred income of RMB159.0 million, RMB143.5 million,
RMB189.6 million and RMB177.8 million as of December 31, 2021, 2022 and 2023 and June 30, 2024,
respectively. Such fluctuations were primarily due to the joint impact of new grants received and the
amount released to profit or loss during the relevant periods.
Provision
We generally provide warranties of 12 to 18 months to customers on certain of our products for
general repairs of defects occurring during the warranty period. The amount of the provision for the
warranties is estimated based on sales volumes and past experience of the level of repairs and returns. The
estimation basis is reviewed on an ongoing basis and revised where appropriate. We recorded provision
for product warranties of RMB3.5 million, RMB6.6 million, RMB6.1 million and RMB5.0 million as of
December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, due to the impact of our sales growth
during the relevant periods, partially offset by the improvement in our product quality, which reduced the
relevant provision rate.
FINANCIAL INFORMATION
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LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of cash are to fund our procurement of raw material, research and development and
sales activities, construction of our production facilities and other operational needs. During the Track
Record Period, we financed our capital expenditures and working capital requirements principally with
funds from equity financing, cash generated from our operations and bank borrowings. After the Global
Offering, we believe that our liquidity requirements will continue to be satisfied with a combination of
these sources and net proceeds from the Global Offering. As of December 31, 2021, 2022 and 2023 and
June 30, 2024, we had cash and cash equivalents of RMB149.1 million, RMB297.8 million, RMB111.0
million and RMB73.0 million, respectively. As of December 31, 2021, 2022 and 2023, June 30, 2024 and
the Latest Practicable Date, we had utilized bank facilities of nil, RMB22.0 million, RMB8.0 million,
RMB30.0 million and RMB49.0 million, respectively, and our remaining bank facilities available for use
were nil, RMB78.0 million, nil, RMB40.0 million and RMB120.0 million, respectively. As of the Latest
Practicable Date, our unutilized banking facilities were committed and unrestricted. These banking
facilities have been approved and formally confirmed by the relevant banks in the relevant agreements,
and may only be adjusted or revoked in rare circumstances, such as material and significant adverse
change in our operations and financial condition or liquidation, which we consider are unlikely to occur.
Therefore, our Directors and our PRC Legal Advisor are of the view that these banking facilities are
highly certain. The expiration dates for our banking facilities (i.e., the end of the periods specified in the
relevant agreements during which we can apply to utilize the credit facilities and withdraw funds) range
from March 2025 to March 2026. The specific borrowing periods will generally be detailed in separate
loan agreements under these banking facilities, generally one year to 18 months from the date of fund
withdrawal. We typically will seek to renew these credit facilities upon expiration considering our needs.
Given our strong relationship with the banks and our historical track record of compliance with no
defaults and successful renewals, and drawdowns under multiple facilities from multiple banks, coupled
with our longstanding relationship of not less than six years with the majority of our lender banks, as well
as our financial assets at FVTPL of RMB146.0 million as at June 30, 2024 primarily comprising
structured deposits and certificate deposits that we purchased from major reputable banks in China,
which we believe could serve as additional comfort of our creditworthiness to lender banks, our Directors
are of the view that the likelihood of continued cooperation with these banks is high. We do not anticipate
any changes to the availability of financing to fund our operations in the future.
Taking into account the financial resources available to us, including our cash and cash equivalents,
future cash flow from operating activities, financial assets at FVTPL, available bank facilities and the
estimated net proceeds from the Global Offering, our Directors are of the view that we have sufficient
working capital to meet our present requirements and for the next 12 months from the date of this
prospectus.
Our cash burn rate refers to the average monthly (1) net cash used in operating activities, (2)
payments for property, plant and equipment, intangible assets and other capital expenditures, and (3)
payments of lease liabilities. Our historical cash burn rate was RMB3.5 million, RMB12.1 million and
RMB20.6 million in 2021, 2022 and 2023 and RMB11.1 million for the 12 months ended June 30, 2024,
respectively. We had a relatively high cash burn rate in 2023, primarily due to capital expenditure for
asset acquisition of RMB71.5 million in 2023 in connection with the construction of our Qingdao
production facilities. See Note 34 to the Accountants’ Report included in Appendix I to this prospectus
for details. Our historical cash burn rate in 2023 after deducting such capital expenditure would have
been RMB14.6 million. We had cash and cash equivalents and financial assets at FVTPL of RMB219.0
million in aggregate as of June 30, 2024. We estimate that we will receive net proceeds of approximately
HK$719.6 million after deducting the estimated underwriting commissions and other fees and expenses
FINANCIAL INFORMATION
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paid and payable by us in connection with the Global Offering, assuming no Over-allotment Option is
exercised and assuming an Offer Price of HK$19.80 per Offer Share, being the mid-point of the indicative
Offer Price range as set out in this prospectus. Assuming that the average cash burn rate going forward
will be RMB20.6 million, similar to the cash burn rate level in 2023, we estimate that our cash and cash
equivalents and financial assets at FVTPL as of June 30, 2024 will be able to maintain our financial
viability for approximately 10.6 months or, if we take into account 10% of the estimated net proceeds
from the Listing (namely, the portion allocated for our working capital and other general corporate
purposes), approximately 13.9 months or, if we take into account the estimated net proceeds from the
Listing, approximately 43.0 months. Assuming that the average cash burn rate going forward will be
RMB14.6 million, similar to the cash burn rate level after deducting the capital expenditure for asset
acquisition in 2023 as mentioned above, we estimate that our cash and cash equivalents and financial
assets at FVTPL as of June 30, 2024 will be able to maintain our financial viability for approximately
15.0 months or, if we take into account 10% of the estimated net proceeds from the Listing (namely, the
portion allocated for our working capital and other general corporate purposes), approximately 19.5
months or, if we take into account the estimated net proceeds from the Listing, approximately 60.5
months. Assuming that the average cash burn rate going forward will be RMB11.1 million, similar to the
cash burn rate level in the 12 months ended June 30, 2024, we estimate that our cash and cash equivalents
and financial assets at FVTPL as of June 30, 2024 will be able to maintain our financial viability for
approximately 19.8 months or, if we take into account 10% of the estimated net proceeds from the Listing
(namely, the portion allocated for our working capital and other general corporate purposes),
approximately 25.8 months or, if we take into account the estimated net proceeds from the Listing,
approximately 79.9 months. We will continue to monitor our cash flows from operations closely and
expect to raise our next round of financing, if needed, with a minimum buffer of 12 months.
Cash Flows
The following table sets forth a summary of our cash flows 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 ........................ (25,801) (15,177) (19,708) (22,108) (26,472)
Working capital changes .................. 32,168 (100,487) (99,537) (56,164) (30,356)
Cash generated from/(used in) operations ..... 6,367 (115,664) (119,245) (78,272) (56,828)
Income tax paid ......................... — ( 8 4 7 ) (38,455) (36,817) (13,586)
Net cash from/(used in) operating activities . . . 6,367 (116,511) (157,700) (115,089) (70,414)
Net cash (used in)/from investing activities .... (271,879) 69,480 (57,864) (52,034) 24,856
Net cash from financing activities ........... 275,012 193,973 28,137 3,292 7,816
Cash and cash equivalent at beginning of the
year/period ........................... 139,879 149,093 297,763 297,763 110,962
Effects of exchange rate changes on cash and
cash equivalents ....................... ( 2 8 6 ) 1,728 626 1,385 (187)
Cash and cash equivalent at end of the
year/period ........................... 149,093 297,763 110,962 135,317 73,033
FINANCIAL INFORMATION
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Net cash from/(used in) operating activities
Net cash used in operating activities was RMB70.4 million in the six months ended June 30, 2024,
primarily due to loss before tax of RMB59.6 million minus income tax paid of RMB13.6 million, as
adjusted for (1) certain non-cash or non-operating items, primarily including interest income of RMB1.3
million, depreciation of property, plant and equipment of RMB13.4 million, write-down of inventories to
net realizable value of RMB6.5 million, depreciation of right-of-use assets of RMB2.9 million, fair value
gains on financial assets at FVTPL of RMB1.6 million and equity-settled share-based payments of
RMB13.7 million, (2) changes in the working capital that negatively affected the cash flow from
operating activities, primarily including (i) an increase in inventories of RMB23.1 million; and (ii) a
decrease in deferred income of RMB11.8 million, partially offset by (3) changes in working capital that
positively affected the cash flow from operating activities, primarily including a decrease in trade and bill
receivables of RMB9.7 million.
Net cash used in operating activities was RMB157.7 million in 2023, primarily due to loss before
tax of RMB89.8 million minus income tax paid of RMB38.5 million, as adjusted for (1) certain non-cash
or non-operating items, primarily including finance costs of RMB2.0 million, interest income of RMB2.3
million, depreciation of property, plant and equipment of RMB25.6 million, impairment of trade
receivables of RMB3.9 million, write-down of inventories to net realizable value of RMB17.1 million,
depreciation of right-of-use assets of RMB7.0 million, fair value gains on financial assets at FVTPL of
RMB4.1 million, investment income from financial assets at FVTPL of RMB2.7 million and
equity-settled share-based payments of RMB21.5 million, (2) changes in the working capital that
negatively affected the cash flow from operating activities, primarily including (i) an increase in
inventories of RMB29.3 million; (ii) an increase in prepayments, deposits and other receivables of
RMB10.6 million; (iii) a decrease in contract liabilities of RMB24.6 million; (iv) a decrease in other
payables and accruals of RMB19.5 million; (v) a decrease in deferred income of RMB17.1 million; and
(vi) an increase in trade and bills receivables of RMB5.1 million, partially offset by (3) changes in
working capital that positively affected the cash flow from operating activities, primarily including a
decrease in restricted bank deposits of RMB7.0 million.
Net cash used in operating activities was RMB116.5 million in 2022, primarily due to loss before
tax of RMB52.6 million minus income tax paid of RMB0.8 million, as adjusted for (1) certain non-cash
or non-operating items, primarily including finance costs of RMB2.0 million, interest income of RMB2.8
million, depreciation of property, plant and equipment of RMB16.2 million, write-down of inventories to
net realizable value of RMB8.6 million, depreciation of right-of-use assets of RMB6.0 million,
investment income from financial assets at FVTPL of RMB7.4 million and equity-settled share-based
payments of RMB12.6 million, (2) changes in the working capital that negatively affected the cash flow
from operating activities, primarily including (i) an increase in inventories of RMB83.2 million; (ii) an
increase in restricted bank deposits of RMB8.4 million; (iii) an increase in trade and bills receivables of
RMB25.0 million; and (iv) a decrease in deferred income of RMB15.5 million, partially offset by (3)
changes in working capital that positively affected the cash flow from operating activities, primarily
including (i) an increase in trade and bills payables of RMB12.6 million; (ii) an increase in contract
liabilities of RMB8.5 million; and (iii) an increase in other payables and accruals of RMB13.7 million.
Net cash from operating activities was RMB6.4 million in 2021, primarily due to loss before tax of
RMB25.3 million, as adjusted for (1) certain non-cash or non-operating items, primarily including
interest income of RMB1.9 million, depreciation of property, plant and equipment of RMB3.5 million,
reversal of impairment of trade receivables of RMB3.4 million, write-down of inventories to net
realizable value of RMB5.4 million, depreciation of right-of-use assets of RMB4.7 million, fair value
FINANCIAL INFORMATION
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gains on financial assets at FVTPL of RMB1.7 million, investment income from financial assets at
FVTPL of RMB7.0 million and equity-settled share-based payments of RMB1.3 million, (2) changes in
working capital that positively affected the cash flow from operating activities, primarily including (i) an
increase in contract liabilities of RMB6.0 million; and (ii) an increase in deferred income representing
government grants of RMB66.8 million, partially offset by (3) changes in the working capital that
negatively affected the cash flow from operating activities, primarily including (i) an increase in
inventories of RMB33.0 million; and (ii) a decrease in trade and bills payables of RMB5.5 million.
Net cash (used in)/from investing activities
Net cash from investing activities was RMB24.9 million in the six months ended June 30, 2024,
primarily due to proceeds from disposal of financial assets at FVTPL of RMB32.4 million, partially
offset by purchases of items of property, plant and equipment of RMB7.6 million.
Net cash used in investing activities was RMB57.9 million in 2023, primarily due to (1) purchases of
items of property, plant and equipment of RMB11.3 million; (2) purchases of financial assets at FVTPL
of RMB370.3 million representing our purchases of structured deposits and certificate deposits; and (3)
asset acquisition through the acquisition of equity interest in Qingdao Yuejiang Robotics Co., Ltd.
(“Qingdao Yuejiang Robotics”) of RMB71.5 million, partially offset by proceeds from disposal of
financial assets at FVTPL of RMB392.5 million as we redeemed relevant deposits.
Net cash from investing activities was RMB69.5 million in 2022, primarily due to proceeds from
disposal of financial assets at FVTPL of RMB735.1 million, partially offset by (1) purchase of financial
assets at FVTPL of RMB645.0 million representing our purchases of structured deposits and certificate
deposits; and (2) purchases of items of property, plant and equipment of RMB21.5 million.
Net cash used in investing activities was RMB271.9 million in 2021, primarily due to (1) purchase
of items of property, plant and equipment of RMB42.5 million; and (2) purchase of financial assets at
FVTPL of RMB1,055.0 million representing our purchases of structured deposits and certificate
deposits, partially offset by proceeds from disposal of financial assets at FVTPL of RMB825.7 million as
we redeemed relevant deposits.
Net cash from financing activities
Net cash from financing activities was RMB7.8 million in the six months ended June 30, 2024,
primarily due to new bank and other loans of RMB69.2 million, partially offset by repayment of bank
loans of RMB57.8 million.
Net cash from financing activities was RMB28.1 million in 2023, primarily due to new bank loans
obtained of RMB57.8 million, partially offset by (1) repayment of bank loans of RMB21.6 million; and
(2) payments of lease liabilities of RMB6.5 million.
Net cash from financing activities was RMB194.0 million in 2022, primarily due to (1) capital
contribution by Shareholders of RMB183.5 million; and (2) new bank loans obtained of RMB21.6
million, partially offset by (1) payments of lease liabilities of RMB5.2 million; and (2) share issuance
expenses of RMB4.3 million.
Net cash from financing activities was RMB275.0 million in 2021, primarily due to capital
contribution by Shareholders of RMB309.1 million, partially offset by repayment of bank loans of
RMB23.0 million.
FINANCIAL INFORMATION
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Current Assets and Current Liabilities
The following table sets forth our current assets and 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 .................... 7 0 ,901 131,843 141,520 155,296 157,903
Trade and bills receivables ........ 1 5 ,046 39,608 41,608 33,040 57,403
Contract assets ................. 2 2 8 8 2 3 2 5 4 1 6 4 4 7
Prepayments, deposits and other
receivables .................. 1 7 ,594 21,074 30,844 28,413 29,504
Financial assets at FVTPL ........ 2 7 2 , 7 2 0 190,400 174,383 145,983 116,232
Restricted bank deposits .......... 8 2 1 9,189 2,210 821 2,321
Cash and cash equivalents ........ 1 4 9 , 0 9 3 297,763 110,962 73,033 81,324
Total current assets ............. 526,403 689,959 501,852 437,002 445,134
Current liabilities
Trade and bills payables .......... 1 8 ,275 30,894 30,907 29,707 40,720
Other payables and accruals ....... 9 4 ,176 183,368 41,792 39,291 36,717
Financial liabilities at FVTPL ..... — — 8 0 — —
Interest-bearing bank loans ........ — 21,619 57,790 69,233 61,472
Lease liabilities ................. 3,108 5,016 4,874 4,415 4,625
Contract liabilities .............. 2 7 ,076 35,578 10,939 10,561 7,119
Tax payable .................... 3 8 ,761 38,146 14,415 530 935
Total current liabilities .......... 181,396 314,621 160,797 153,737 151,588
Net current assets .............. 345,007 375,338 341,055 283,265 293,546
Our net current assets increased from RMB345.0 million as of December 31, 2021 to RMB375.3
million as of December 31, 2022, primarily due to the increase in our cash and cash equivalents and
inventories, partially offset by the increase in other payables and accruals due to the increases in payables
for non-current assets, payroll payable and other tax payables, and the decrease in financial assets at
FVTPL as we redeemed relevant deposits. Our net current assets then decreased to RMB341.1 million as
of December 31, 2023, primarily due to the decrease in cash and cash equivalents, partially offset by the
decrease in other payables and accruals due to the decreases in payables for non-current assets and other
tax payables. Our net current assets then decreased to RMB283.3 million as of June 30, 2024, primarily
due to the decreases in our cash and cash equivalents and financial assets at FVTPL. Our net current
assets remained relatively stable at RMB293.5 million as of October 31, 2024.
FINANCIAL INFORMATION
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CASH OPERATING COSTS
The following table sets forth key information relating to our cash operating costs for the
years/periods indicated.
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
(RMB in thousands)
Workforce employment (1) ....... 72,218 124,583 129,753 82,144
Research and development
costs
(2)
...................... 12,291 10,213 18,172 10,152
Direct production costs,
including materials (3) ........ 152,720 214,228 201,645 109,590
Product marketing (4) ........... 28,161 26,723 60,241 20,487
Contingency allowances ........ ————
Non-income taxes and other
charges .................... 5,459 7,623 11,404 1,582
Total ........................ 270,849 383,370 421,215 223,955
(1) Cash operating costs relating to workforce employment represent the sum of employee benefit expenses under
research and development expenses, administrative expenses, costs of sales and selling and distribution expenses
(excluding share-based payments expenses which are non-cash in nature) adjusted by changes in working capital
relating to employee benefit expenses as of previous and current year/period end under the above operating expenses.
(2) Research and development costs under cash operating costs represent research and development expenses (excluding
employee benefit expenses and non-cash items under research and development expenses) adjusted by changes in
working capital relating to research and development activities as of the previous and current year/period end.
(3) Cash operating costs relating to direct service and production costs, including materials, represent the costs of sales
(excluding employee benefit expenses and non-cash items under contract fulfillment costs) adjusted by changes in
working capital relating to service and production as of the previous and current year/period end.
(4) Cash operating costs relating to product marketing represent the selling and distribution expenses (excluding
employee benefit expenses and non-cash items under selling and distribution expenses) adjusted by changes in
working capital relating to sales and distribution activities as of the previous and current year/period end.
FINANCIAL INFORMATION
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INDEBTEDNESS
Our indebtedness during the Track Record Period primarily consisted of interest-bearing bank loans
and lease liabilities. The following table 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
Amounts due to related parties—
non-trade .................... 1 0 8 ————
Interest-bearing bank loans ........ — 2 1 ,619 57,790 69,233 61,472
Lease liabilities ................. 3,108 5,016 4,874 4,415 4,625
Total current .................. 3,216 26,635 62,664 73,648 66,097
Non-current
Interest-bearing bank loans ........ — — — — 17,100
Lease liabilities ................. 5,283 5,731 4,533 4,832 3,947
Total non-current .............. 5,283 5,731 4,533 4,832 21,047
Total indebtedness ............. 8,499 32,366 67,197 78,480 87,144
Interest-bearing Bank Loans
We had interest-bearing bank loans of nil, RMB21.6 million, RMB57.8 million and RMB69.2
million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively, all of which were
repayable within one year on demand. The effective interest rate of our interest-bearing bank loans was
1.83% as of December 31, 2022, and ranged between 1.22% and 1.83% and between 1.40% and 2.42% as
of December 31, 2023 and June 30, 2024, respectively. As of June 30, 2024, interest-bearing bank loans
of RMB39.8 million were secured by our certificate deposits of RMB40.0 million.
Our bank loans contain standard terms, conditions and covenants that are customary for commercial
bank loans in China. Our Directors confirmed that we did not experience any difficulty in obtaining bank
loans or other borrowings, default in payment of bank loans or other borrowings or breach of covenants
during the Track Record Period and up to the Latest Practicable Date.
Lease Liabilities
Our lease liabilities were primarily related to our office leases. Our lease liabilities were RMB8.4
million, RMB10.7 million, RMB9.4 million and RMB9.2 million as of December 31, 2021, 2022 and
2023 and June 30, 2024, respectively, changes of which were primarily due to our new or renewed office
leases, partially offset by our lease payments.
FINANCIAL INFORMATION
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Save as disclosed above, as of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31,
2024, we had no bank loans or other borrowings, or any other loan capital issued and outstanding or
agreed to be issued, bank overdrafts, borrowings or similar indebtedness, liabilities under acceptance
(other than normal trade bills) or acceptance credits, debentures, mortgages, charges, hire purchases,
guarantees or other material contingent liabilities.
Since October 31, 2024 and up to the date of this prospectus, there had not been any material change
in our indebtedness.
CONTINGENT LIABILITIES
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we did not have any material
contingent liability, guarantee or any litigation or claim of material importance, pending or threatened
against us or any member of our Group that is likely to have a material and adverse effect on our business,
financial condition and result of operations.
RESEARCH AND DEVELOPMENT EXPENDITURE AND TOTAL OPERATING EXPENDITURE
During the Track Record Period, we did not capitalize internal development costs as intangible
assets. The following table sets forth our annual and total research and development expenditure for the
years indicated.
Y ear ended December 31,
2021 2022 2023
(RMB in thousands)
Research and development expenses ..... 46,873 52,054 70,527
Adjustments:
Add: intangible assets acquired from third
parties and capitalized
(1) .......... 2 2 0 1 2 8 —
Less: amortization expense of capitalized
intangible assets included in
research and development
expenditure
(1) ................... (24) (91) (120)
Annual research and development
expenditure .......................... 47,069 52,091 70,407
Total research and development
expenditure for the three financial years
prior to the Listing ................... 169,567
(1) Primarily related to software procured from third parties for our research and development activities.
FINANCIAL INFORMATION
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The following table sets forth our annual and total operating expenditure for the years indicated:
Y ear ended December 31,
2021 2022 2023
(RMB in thousands)
Research and development expenses ..... 46,873 52,054 70,527
Selling and distribution expenses ........ 63,630 89,274 127,389
Administrative expenses ................ 26,438 49,532 53,065
Adjustments:
Add: intangible assets acquired from third
parties and capitalized
(1) .......... 2 2 0 1 2 8 —
Less: amortization expense of capitalized
intangible assets included in
research and development
expenditure
(1) .................... (24) (91) (120)
Annual total operating expenditure ...... 137,137 190,897 250,861
Total operating expenditure for the three
financial years prior to the Listing ..... 578,895
(1) Primarily related to software procured from third parties for our research and development activities.
The following table sets forth our annual research and development expenditure ratio and total
research and development expenditure ratio for the years indicated.
Y ear ended December 31,
2021 2022 2023
Annual research and development
expenditure ratio (1) ................... 34.3% 27.3% 28.1%
Total research and development
expenditure ratio (2) ................... 29.3%
(1) Calculated by dividing annual research and development expenditure by annual total operating expenditure.
(2) Calculated by dividing total research and development expenditure for the three financial years prior to the Listing by
total operating expenditure for the three financial years prior to the Listing.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURES AND COMMITMENTS
Capital Expenditures
Our capital expenditures during the Track Record Period primarily consisted of expenditures on
acquisition of property, plant and equipment and land use rights, as well as purchase of intangible assets.
The following table sets forth our capital expenditure for the years/period indicated.
Y ear ended December 31, Six months
ended June 30,
20242021 2022 2023
(RMB in thousands)
Purchases of items of property,
plant and equipment .......... 42,478 21,525 11,306 7,640
Purchase of intangible assets .... 2,121 2,062 52 1,213
Asset acquisition (1) ............ — — 71,540 —
Total ........................ 44,599 23,587 82,898 8,853
(1) Represents the asset acquisition in connection with the construction of our Qingdao production facilities through the
acquisition of equity interests of Qingdao Yuejiang Robotics. See Note 34 to the Accountants’ Report included in
Appendix I to this prospectus for details.
We expect to incur additional capital expenditure in 2024 primarily for the purchase of property,
plant and equipment, and intangible assets. We plan to fund such planned capital expenditures through
our existing cash and cash generated from our operating activities. After the Listing, we expect to finance
our capital expenditure through a combination of existing cash, cash flows generated from our operating
activities, bank borrowings and net proceeds from the Global Offering. See “Future Plans and Use of
Proceeds” for the portion of capital expenditures to be funded by the proceeds from the Global Offering.
We may adjust our capital expenditures for any given period according to our development plans or in
light of market conditions, regulatory environment and other factors we believe to be appropriate.
Capital Commitments
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:
– Purchase of items of
property, plant and
equipment ................ 26,017 — 1,624 2,565
In addition, we recorded short-term lease commitments of RMB0.1 million, RMB0.1 million,
RMB0.4 million and RMB0.2 million as of December 31, 2021, 2022 and 2023 and June 30, 2024,
respectively.
FINANCIAL INFORMATION
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OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet transaction.
LISTING EXPENSES
We recorded listing expenses of nil, nil, nil and RMB13.3 million (including deferred listing
expenses) in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively. We expect to incur
a total of approximately RMB67.0 million (HK$72.4 million) of listing expenses in connection with the
Global Offering, representing approximately 9.1% of the gross proceeds from the Global Offering
(assuming an Offer Price of HK$19.80, being the mid-point of the indicative Offer Price range between
HK$18.80 and HK$20.80, and assuming that the Over-allotment Option is not exercised), including (1)
underwriting commissions, sponsor fees, SFC transaction levy, Stock Exchange trading fees and AFRC
transaction levy for all Offer Shares of approximately RMB39.1 million (HK$42.2 million), and (2)
non-underwriting related expenses of approximately RMB27.9 million (HK$30.2 million), which consist
of (i) fees and expenses of legal advisors and accountants of approximately RMB17.9 million (HK$19.3
million), and (ii) other fees and expenses of approximately RMB10.0 million (HK$10.8 million).
Approximately RMB30.2 million (HK$32.7 million) is expected to be charged to our consolidated
statements of profit or loss, and approximately RMB36.8 million (HK$39.7 million) is expected to be
deducted from equity. The listing expenses above are the best estimate as of the Latest Practicable Date
and for reference only. The actual amount may differ from this estimate.
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time during our ordinary course of
business and on terms comparable to the terms of transactions with other entities that are not related
parties. See Note 38 to the Accountants’ Report included in Appendix I to this prospectus for details. Our
Directors are of the view that our related party transactions during the Track Record Period were
conducted in the ordinary course of business at arm’s length with reference to normal commercial terms,
and would not distort our track record results or make our historical results not reflective of our future
performance.
KEY FINANCIAL RATIOS
As of/for the year ended December 31,
As of/for the six months
ended June 30,
2021 2022 2023 2023 2024
(unaudited)
Profitability:
Gross profit margin (1) .................. 50.5% 40.8% 43.5% 39.1% 43.9%
Liquidity:
Current ratio
(2) ....................... 2 . 9 2 . 2 3 . 1 N / A 2 . 8
Quick ratio (3) ........................ 2 . 5 1 . 8 2 . 2 N / A 1 . 8
(1) The calculation of gross profit margin is based on gross profit for the period divided by revenue for the respective
period and multiplied by 100.0%.
(2) The calculation of current ratio is based on current assets divided by current liabilities as of period end.
(3) The calculation of quick ratio is based on current assets less inventories divided by current liabilities as of period end.
FINANCIAL INFORMATION
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Analysis of Key Financial Ratios
Gross profit margin
See “—Period to Period Comparison of Results of Operations” for a discussion of the factors
affecting our gross profit margin during the Track Record Period.
Current ratio and quick ratio
Our current ratio and quick ratio decreased from 2.9 and 2.5 as of December 31, 2021, respectively,
to 2.2 and 1.8 as of December 31, 2022, respectively, primarily due to the increase in current liabilities
resulting from the increases in other payables and accruals, interest-bearing bank loans, trade and bills
payables and contract liabilities.
Our current ratio and quick ratio increased from 2.2 and 1.8 as of December 31, 2022, respectively,
to 3.1 and 2.2 as of December 31, 2023, respectively, primarily due to the decrease in current liabilities
resulting from the decreases in other payables and accruals, contract liabilities and tax payable, partially
offset by the increase in interest-bearing bank loans.
Our current ratio and quick ratio decreased from 3.1 and 2.2 as of December 31, 2023, respectively,
to 2.8 and 1.8 as of June 30, 2024, respectively, primarily due to the decrease in current assets resulting
from the decreases in cash and cash equivalents and financial assets at FVTPL.
QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISKS
Our principal financial instruments comprise interest-bearing bank and other borrowings, financial
assets at FVTPL and cash and short-term deposits. The main purpose of these financial instruments is to
fund our operations. We have various other financial assets and liabilities such as trade receivables and
trade payables, which arise directly from our operations.
The main risks arising from our financial instruments are foreign currency risk, credit risk and
liquidity risk. Our Directors review and determine the policies for managing each of these risks. For
details of our financial risk management, see Note 41 to the Accountants’ Report in Appendix I to this
prospectus.
FINANCIAL INFORMATION
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Foreign Currency Risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates.
Fluctuations in exchange rates between Renminbi and other currencies in which we conduct our business
may affect our financial condition and results of operations.
The following table demonstrates the sensitivity at the relevant dates to a reasonably possible
change in foreign currency exchange rates, with all other variables held constant, of our loss before tax
(due to changes in the fair value of monetary assets and liabilities) and our equity.
Increase/
(decrease) in
basis points
Increase/
(decrease) in
profit before tax
(Decrease)/
increase in
equity
% RMB in thousands
Y ear ended December 31, 2021
If Renminbi weakens against
the U.S. dollars ........................ 5 1,435 1,435
If Renminbi strengthens against
the U.S. dollars ........................ 5 (1,435) (1,435)
Y ear ended December 31, 2022
If Renminbi weakens against
the U.S. dollars ........................ 5 2,367 2,367
If Renminbi strengthens against
the U.S. dollars ........................ 5 (2,367) (2,367)
Y ear ended December 31, 2023
If Renminbi weakens against
the U.S. dollars ........................ 5 3,357 3,357
If Renminbi strengthens against
the U.S. dollars ........................ 5 (3,357) (3,357)
Six months ended June 30, 2024
If Renminbi weakens against
the U.S. dollars ........................ 5 1,865 1,865
If Renminbi strengthens against
the U.S. dollars ........................ 5 (1,865) (1,865)
Credit Risk
We trade with recognized and creditworthy parties, and all customers who wish to trade on credit
terms are subject to credit verification procedures. Receivable balances are monitored on an ongoing
basis and our exposure to bad debts is not significant. The credit risk of our other financial assets, which
comprise cash and cash equivalents and financial assets included in prepayments, other receivables and
other assets, arises from default of the counterparty, with a maximum exposure equal to the carrying
amounts of these instruments.
FINANCIAL INFORMATION
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For other receivables and other assets, our management makes periodic collective assessment as
well as individual assessment on the recoverability of other receivables based on historical settlement
records and past experience. Our Directors believe that there is no material credit risk inherent in our
outstanding balance of other receivables.
Liquidity Risk
We monitor our risk to a shortage of funds using a recurring liquidity planning tool. This tool
considers the maturity of both our financial instruments and financial assets (e.g., trade receivables) and
projected cash flows from operations. For details of our liquidity risk, including the maturity profile of
our financial liabilities, see Note 41 to the Accountants’ Report in Appendix I to this prospectus.
DIVIDENDS
We are a holding company incorporated under PRC laws. During the Track Record Period and up to
the Latest Practicable Date, we did not declare or pay any dividends, nor did we have any dividend policy
in place. Pursuant to our Articles of Association, our Board will formulate the dividends distribution plan
after taking into account our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restriction and other factors which our Directors consider relevant. Any
declaration and payment as well as the amount of dividends will be subject to our Articles of Association,
applicable PRC law and approval by our Shareholders. Our Shareholders in a general meeting may
approve any declaration of dividends, which must not exceed the amount recommended by our Board. As
advised by our PRC Legal Advisor, no dividend shall be declared or payable, unless we have profits and
reserves lawfully available for distribution. Any future net profit that we make will have to be first
applied to make up for our historically accumulated losses, after which we will be obliged to allocate 10%
of our net profit to our statutory common reserve fund until such fund has reached more than 50% of our
registered capital.
DISTRIBUTABLE RESERVES
As of June 30, 2024, we had no distributable reserves.
DISCLOSURE REQUIRED UNDER CHAPTER 13 OF THE LISTING RULES
Our Directors have confirmed that, as of the Latest Practicable Date, there were no circumstances
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this prospectus, there has been no material adverse
change in our financial or trading position since June 30, 2024 (being the date on which the latest audited
consolidated financial information of our Group was prepared) and there is no event since June 30, 2024
which would materially affect the information shown in our consolidated financial statements included in
the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets has been prepared in
accordance with Rule 4.29 of the Listing Rules and with reference to Accounting Guideline 7
“Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the
HKICPA, and is to illustrate the effect of the Global Offering on our consolidated net tangible assets as of
June 30, 2024 as if it had taken place on that date.
Our unaudited pro forma adjusted consolidated net tangible assets have been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the
financial position of our Group had the Global Offering been completed as of June 30, 2024 or any future
date. It is prepared based on our consolidated net tangible assets as of June 30, 2024 as set out in the
Accountants’ Report in Appendix I to this prospectus, and adjusted as described below.
Consolidated net
tangible assets
attributable to
owners of our
Company as of
June 30, 2024 (1)
Estimated net
proceeds from
the Global
Offering (4)
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of our
Company as of
June 30, 2024
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of our
Company per Share
as of June 30,
2024 (3)
(RMB in thousands) RMB HK$ (4)
Based on an Offer Price of
HK$18.80 per H Share ........ 323,948 641,731 965,679 2.41 2.60
Based on an Offer Price of
HK$19.80 per H Share ....... 323,948 677,073 1,001,021 2.50 2.70
Based on an Offer Price of
HK$20.80 per H Share ....... 323,948 712,415 1,036,363 2.59 2.80
(1) The consolidated net tangible assets of our Group attributable to owners of our Company as of June 30, 2024 were
equal to the audited net assets attributable to owners of our Company as of June 30, 2024 of RMB326,932,000 after
deducting of intangible assets of RMB2,984,000 as of June 30, 2024 set out in the Accountants’ Report in Appendix I
to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$18.80, HK$19.80 or
HK$20.80 per Share, after the deduction of the underwriting fees and other related expenses payable by our Company
(excluding the listing expenses that have been charged to profit or loss during the Track Record Period) and do not take
into account any shares which may be issued upon exercise of the Over-allotment Option.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company per Share is
arrived at after adjustments referred to in the preceding paragraphs and on the basis that 400,000,000 Shares are in
issue assuming the Global Offering were completed on June 30, 2024 but takes no account of any Shares which may be
allotted and issued pursuant to the exercise of the Over-allotment Option or any Shares which may be issued or
repurchased by our Company.
(4) For the purpose of the unaudited pro forma adjusted consolidated net tangible assets, the estimated net proceeds from
the Global Offering are converted from Hong Kong dollars into Renminbi at an exchange rate of HK$1.00 to
RMB0.92526 and the unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our
Company per Share is converted from Renminbi into Hong Kong dollars at the same exchange rate. No representation
is made that Renminbi amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa,
at that rate.
(5) No adjustment has been made to reflect any trading result or other transactions of our Group entered into subsequent
to June 30, 2024.
(6) No dividend was paid or declared by our Company subsequent to June 30, 2024 and up to the Latest Practicable Date.
FINANCIAL INFORMATION
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FUTURE PLANS
See “Business—Growth Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that the net proceeds of the Global Offering, after deducting the estimated underwriting
commissions and other fees and expenses paid and payable by us in connection with the Global Offering,
will be approximately HK$719.6 million, assuming an Offer Price of HK$19.80 per H Share (being the
mid-point of the indicative range of the Offer Price of HK$18.80 to HK$20.80 per H Share), and that the
Over-allotment Option is not exercised.
We currently intend to use the net proceeds from the Global Offering for the purposes and in the
amounts as set out below:
• approximately 40.0% of the net proceeds, or HK$287.8 million, will be used for cutting-edge
technology development for intelligent cobots from 2025 to 2029. We will increase our efforts
on research and development for more advanced cobot products to raise our market share and
visibility, allowing us to maintain our leading edge in the cobot industry. More specifically:
(i) approximately 4.0% of the net proceeds, or approximately HK$28.8 million, to be used
for the research and development of proprietary key components of cobots, which include
projects for (1) encoder-based hardware circuits and key encoder algorithms, (2)
permanent magnet synchronous motors, (3) next-generation power devices, and (4)
controller systems;
(ii) approximately 4.0% of the net proceeds, or approximately HK$28.8 million, to be used
for (1) improving our motion control algorithms to elevate our cobots’ overall motion
performance, (2) further updating our ready-made process toolkits and enriching the
process toolkit library, and (3) supporting more third-party accessories and equipment;
(iii) approximately 4.0% of the net proceeds, or approximately HK$28.8 million, to be used
for the development of perception and interaction technologies. We believe that the
advancement in such technology allows our cobots to be used in more collaborative
scenarios, such as consumer facing industries where humans and cobots have more
frequent interactions. These research and development projects will cover a new
generation of SafeSkin technology, and multi-modal human-robot interaction
technology;
(iv) approximately 8.0% of the net proceeds, or approximately HK$57.6 million, to be used
for product developments for more models of our cobots, which may include (1)
lightweight models for existing product series, (2) the next-generation CR series which
will be equipped with cutting-edge robotic drivetrain solutions, structural design and
control systems, and (3) a new product series targeting the medical and healthcare sector;
and
FUTURE PLANS AND USE OF PROCEEDS
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(v) approximately 20.0% of the net proceeds, or approximately HK$136.7 million, to be used
for research and development projects for embodied AI, which may allow our cobots to
interact with and learn from a physical environment.
The following table sets forth a breakdown of our implementation plan to develop cutting-edge
technologies for intelligent cobots from 2025 to 2029, based on our current estimation, which
is subject to changes based on our actual needs and market conditions at the relevant time.
For the year ending December 31,
2025 2026 2027 2028 2029
(HK$ in million)
Research and development of
proprietary key components ... 5.6 6.5 12.8 11.7 12.1
Encoder-based hardware circuits
and key encoder algorithms .... 1 . 1 1 . 3 2 . 5 2 . 4 2 . 4
Permanent magnet synchronous
motors ..................... 2 . 0 2 . 3 4 . 4 4 . 1 4 . 3
Next-generation power devices
and controller systems ........ 2 . 5 2 . 9 5 . 8 5 . 2 5 . 4
Improvement of algorithms,
process toolkits and accessories
compatibility ............... 4.4 3.4 10.6 11.6 13.7
Motion control algorithms ....... 2 . 2 1 . 7 5 . 4 5 . 9 6 . 6
Ready-made process toolkits ..... 1 . 8 1 . 4 4 . 1 4 . 5 5 . 9
Third-party accessories and
equipment compatibility ....... 0 . 4 0 . 3 1 . 2 1 . 2 1 . 3
Development of perception and
interaction technologies ...... 4.0 3.5 9.6 11.4 12.0
New generation of SafeSkin
technology .................. 2 . 8 2 . 5 8 . 0 9 . 3 9 . 8
Multi-modal human-robot
interaction technology ........ 1 . 2 1 . 0 1 . 6 2 . 1 2 . 2
Product developments for
more cobot models .......... 7.9 11.9 25.8 22.3 22.8
Lightweight models for existing
product series ............... 2 . 3 3 . 6 7 . 7 6 . 7 6 . 9
Next-generation CR series ....... 4 . 4 6 . 5 14.2 12.2 12.6
New product series targeting the
medical and healthcare sector . . . 1.2 1.8 3.9 3.4 3.3
Research and development for
embodied AI ............... 19.3 22.5 60.6 62.5 61.4
Total ........................ 41.2 47.8 119.4 119.5 122.0
FUTURE PLANS AND USE OF PROCEEDS
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• approximately 27.0% of the net proceeds, or HK$194.3 million, will be used for the
development of our production lines and manufacturing capabilities from 2025 to 2029. More
specifically:
(i) approximately 4.0% of the net proceeds, or approximately HK$28.8 million, to be used
for the development of our own surface mount production lines, a highly automated
manufacturing system that assembles surface mount technology components onto printed
circuit boards. This would allow us to improve our product performance and reliability,
reducing failure rates and maintenance costs;
(ii) approximately 2.0% of the net proceeds, or approximately HK$14.4 million, to be used
for the development of our own machining capabilities to further improve our standard
production capabilities;
(iii) approximately 2.0% of the net proceeds, or approximately HK$14.4 million, to be used
for flexible production lines for the next-generation CR series to improve production
efficiency and capacity; and
(iv) approximately 19.0% of the net proceeds, or approximately HK$136.7 million, to be used
for the mass production of cobots with embodied AI functions.
The following table sets forth a breakdown of our implementation plan to develop our
production lines and manufacturing capabilities from 2025 to 2029, based on our current
estimation, which is subject to changes based on our actual needs and market conditions at the
relevant time.
For the year ending December 31,
2025 2026 2027 2028 2029
(HK$ in million)
Development of surface mount production
lines ............................ – 11.1 4.5 2.3 –
Development of machining capabilities . . . 16.0 – 3.3 3.3 3.3
Development of flexible production lines . 27.4 – 5.6 5.6 5.6
Mass production of cobots with embodied
AI functions ...................... – 25.9 121.6 93.8 –
Total ............................. 43.4 37.0 135.0 105.0 8.9
FUTURE PLANS AND USE OF PROCEEDS
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• approximately 16.0% of the net proceeds, or HK$115.1 million, will be used to selectively
pursue strategic alliances, investment and acquisition opportunities both domestically and
overseas in the downstream of the cobot industry, i.e., cobot integrators, that may help us
acquire new technologies, expand sales channels and tap into new industries where most of
potential customers have their designated cobot integrators or suppliers. When assessing the
investment or acquisition opportunities, we will primarily consider targets that are
complementary to our product offerings and are in line with our corporate philosophy and
growth strategies. More specifically, the criteria we consider when it comes to such investment
and/or acquisition include the cobot integration capabilities, the scale of business, existing
distribution channels and relevant experiences in certain industries such as healthcare and
public services. The target should have an annual revenue of at least RMB5.0 million. The
non-exhaustive examples of desired targets include (1) cobot integrators in the medical and
healthcare sector, particularly those with integration expertise for cobots with moxibustion and
massage functions, (2) cobot integrators in the commercial sector, particularly those with
integration expertise for cobots with coffee and milk tea making functions, and (3) cobot
integrators in household chores application. According to the CIC Report, there are
approximately 40 and 30 potential targets which satisfy our criteria in China and certain
overseas markets (i.e., the United States, South Korea and Denmark), respectively. We expect
that the successful investment and/or acquisition of desired targets can further improve our
cobot integration capabilities and increase our sales volume in new industries. As of the Latest
Practicable Date, we had not identified any investment or acquisition target or enter into any
definitive investment or acquisition agreement.
• approximately 7.0% of the net proceeds, or HK$50.4 million, will be used for overseas sales
channel building in an effort to enhance our distribution and sales capabilities from 2025 to
2029. More specifically, we plan to establish three overseas subsidiaries in Thailand, Mexico
and United Arab Emirates, and expand our overseas marketing team.
• approximately 10.0% of the net proceeds, or HK$72.0 million, to be used for working capital
and other general corporate purposes.
The above allocation of the proceeds will be adjusted on a pro rata basis in the event that the Offer
Price is fixed below or above the mid-point of the indicative price range. If the Offer Price is set at
HK$20.80 per H Share, which is the high end of our indicative Offer Price range, the net proceeds from
the Global Offering will increase by approximately HK$38.2 million. If the Offer Price is set at
HK$18.80 per H Share, which is the low end of our indicative Offer Price range, the net proceeds from the
Global Offering will decrease by approximately HK$38.2 million. Any additional proceeds received from
the exercise of the Over-allotment Option will also be allocated to the above purposes on a pro rata basis.
In the event that the Over-allotment Option is exercised in full, we will receive net proceeds of HK$869.7
million (after deducting the estimated underwriting commissions and other fees and expenses paid and
payable by us in connection with the Global Offering and assuming an Offer Price of HK$19.80 per H
Share, being the mid-point of our indicative Offer Price range).
To the extent that the net proceeds are not immediately applied to the above purposes, we will only
deposit the net proceeds into short-term interest-bearing accounts with 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.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Guotai Junan Securities (Hong Kong) Limited
ABCI Securities Company Limited
China PA Securities (Hong Kong) Company Limited
Shenwan Hongyuan Securities (H.K.) 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 2,000,000 Hong
Kong Offer Shares (subject to re-allocation described below) for subscription by the public in Hong Kong
on, and subject to, the terms and conditions set out in this prospectus and the Hong Kong Underwriting
Agreement at the Offer Price.
Subject to:
(a) the Listing Committee granting the listing of, and permission to deal in, our H Shares in issue
and to be issued 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 the Overall Coordinators (for themselves
and on behalf of the other Underwriters) and our Company),
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 the Overall
Coordinators (for themselves and on behalf of the other Hong Kong Underwriters) and our Company, 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 entered into and becoming unconditional and not having been
terminated.
UNDERWRITING
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--- page 358 ---
If there is any change to the offer size due to change in the number of Offer Shares initially offered
in the Global Offering (other than pursuant to the exercise of the Over-allotment Option and/or
reallocation mechanism as disclosed in this prospectus), or change to the Offer Price which leads to the
resulting price falling outside the indicative Offer Price range as stated in this prospectus, or if our
Company becomes aware that there has been a significant adverse change affecting any matter contained
in this prospectus or a significant new matter has arisen, the inclusion of information in respect of which
would have been required to be in this prospectus if it had arisen before this prospectus was issued, after
the issue of this prospectus and before the commencement of dealings in our H Shares as prescribed under
Rule 11.13 of the Listing Rules, we are required to cancel the Global Offering and relaunch the offer on
FINI and issue a supplemental prospectus or a new prospectus.
Grounds for termination
The respective obligations of the Hong Kong Underwriters to subscribe for, or procure subscribers
for, the Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject to
termination. The Joint Sponsors, the Sponsor-OCs, the Overall Coordinators and the Joint Global
Coordinators (for themselves and on behalf of the Hong Kong Underwriters and the Capital Market
Intermediaries) may, in their sole and absolute discretion terminate the Hong Kong Underwriting
Agreement with immediate effect by notice in writing to our Company from the Joint Sponsors, the
Sponsor-OCs, the Overall Coordinators and/or the Joint Global Coordinators (for themselves and on
behalf of the Hong Kong Underwriters and the Capital Market Intermediaries) at any time prior to 8:00
a.m. on the Listing Date (the “Termination Time”) if any of the following events shall occur prior to the
Termination Time:
(a) there develops, occurs, exists or comes into effect:
(i) any change or prospective change (whether or not permanent) in the business or in the
financial or trading position of our Group; or
(ii) any event, circumstance, or series of events, in the nature of force majeure (including,
without limitation, any acts of government, declaration of a local, national, regional or
international emergency or war, political change, calamity, crisis, epidemic, pandemic,
outbreaks, escalation, adverse mutation or aggravation of diseases (including, without
limitation, COVID-19 (and such related/mutated form), Severe Acute Respiratory
Syndrome (SARS), swine or avian flu, H5N1, H1N1, H7N9, Ebola virus, Middle East
respiratory syndrome and such related/mutated forms), comprehensive sanctions, strikes,
lock-outs, other industrial actions, fire, explosion, flooding, earthquake, tsunami,
volcanic eruption, civil commotion, riots, rebellion, public disorder, acts of war, outbreak
or escalation of hostilities (whether or not war is declared), acts of God, acts of terrorism
(whether or not responsibility has been claimed), paralysis in government operations,
interruptions or accidents or delay in transportation) or other state of emergency in
whatever form, in or affecting, directly or indirectly Hong Kong, China, the United
States, Germany, the United Kingdom, the European Union (as a whole) and Japan (each
a “Relevant Jurisdiction” and collectively, the “Relevant Jurisdictions”); or
UNDERWRITING
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--- page 359 ---
(iii) any change or development involving a prospective change or development, or any event,
circumstance or series of events likely to result in or representing any change or
development involving a prospective change, in local, national, regional or international
financial, economic, political, military, industrial, fiscal, legal, regulatory, currency,
credit or market matters or conditions, equity securities 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 Relevant Jurisdictions; or
(iv) any moratorium, suspension or restriction (including, without limitation, any imposition
of or requirement for any minimum or maximum price limit or price range) in or on
trading in securities generally on the Stock Exchange, the New York Stock Exchange, the
NASDAQ Global Market, the Shenzhen Stock Exchange and the Shanghai Stock
Exchange; or
(v) any general moratorium on commercial banking activities in Hong Kong (imposed by the
Financial Secretary or the Hong Kong Monetary Authority or any other competent
administrative, governmental or regulatory commission, board, body, authority or
agency, or any stock exchange (including, without limitation, the Stock Exchange, the
SFC, the CSRC), self-regulatory organization 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 or foreign, of any
jurisdictions relevant to any member of our Group and/or the Global Offering, including,
without limitation, Hong Kong, China and the United States (each an “Authority” and
collectively, the “Authorities”)), New York (imposed at Federal or New York State level or
by other competent Authority), or any of the other Relevant Jurisdictions, or any
disruption in commercial banking or foreign exchange trading or securities settlement or
clearance services, procedures or matters in or affecting any of the Relevant
Jurisdictions; or
(vi) any and all new national, central, federal, provincial, state, regional, municipal, local,
domestic or foreign laws (including, without limitation, any common law or case law),
statutes, ordinances, codes, regulations or rules (including, without limitation, any and all
regulations, rules, orders, judgments, decrees, rulings, opinions, guidelines, notices,
policies, consents, 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) of any Authority) of all jurisdictions
relevant to any member of our Group and/or the Global Offering (including, without
limitation, Hong Kong, China and the United States), each as amended, supplemented or
otherwise modified from time to time (the “Laws”) or any change or development
involving a prospective change in existing Laws or any event or circumstance resulting in
a change or development involving a prospective change in the interpretation or
application thereof by any court or other competent Authority in or affecting any of the
Relevant Jurisdictions; or
(vii) the imposition of economic sanctions, 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 Relevant Jurisdictions; or
UNDERWRITING
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(viii) any change or development involving a prospective change or amendment in or affecting
all forms of taxation whenever (present or future) created, imposed or arising and whether
of Hong Kong, China, the United States or of any other part of the world and, without
prejudice to the generality of the foregoing, includes all forms of taxation on or relating
to profits, salaries, interest and other forms of income, taxation on capital gains, sales and
value added taxation, business tax, estate duty, death duty, capital duty, stamp duty,
payroll taxation, withholding taxation, rates and other taxes or charges relating to
property, customs and other import and excise duties, and generally any taxation, fee,
assessment, duty, impost, levy, rate, charge or any amount payable to taxing, revenue,
customs or fiscal Authorities whether of Hong Kong, China, the United States or of any
other part of the world, whether by way of actual assessment, withholding, loss of
allowance, deduction or credit available for relief or otherwise, and including all interest,
additions to tax, penalties or similar liabilities arising in respect of any taxation or
exchange control, currency exchange rates or foreign investment regulations (including,
without limitation, a material devaluation of the United States dollar, the Renminbi
and/or Hong Kong dollar or a change in the system under which the value of the Hong
Kong dollar is linked to that of the United States dollar or Renminbi is linked to any
foreign currency or currencies), or the implementation of any exchange control, in any of
the Relevant Jurisdictions or affecting an investment in the Offer Shares; or
(ix) any litigation, dispute, legal action, claim, regulatory investigation or legal proceeding or
action being threatened or instigated or announced against any member of our Group, any
executive Director, our Company or our Controlling Shareholders; or
(x) any executive Director of our Company is being charged with an indictable offence or is
prohibited by operation of law or otherwise disqualified from taking part in the
management of a company; or
(xi) any contravention by any member of our Group or any executive Director of any Laws
applicable to any member of the Group and/or the Global Offering; or
(xii) any demand by creditors for repayment of indebtedness or a valid and effective order or
petition for the winding up or liquidation of any member of the Company or any principal
subsidiary of the Company or any composition or arrangement made by the Company or
any principal subsidiary of the Company with its creditors or a scheme of arrangement
entered into by the Company or any principal subsidiary of the Company or any
resolution for the winding-up of the Company or any principal subsidiary of the Company
or the appointment of a provisional liquidator, receiver or manager over all or part of the
assets or undertaking of the Company or any principal subsidiary of the Company or
anything analogous thereto occurring in respect of the Company or any principal
subsidiary of the Company; or
(xiii) any materialization of any of the risks set out in “Risk Factors”; or
(xiv) the issue or requirement to issue by our Company of any supplement or amendment to this
prospectus (or to any other documents used in connection with the contemplated offer and
sale of the H Shares) pursuant to the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance or the Listing Rules or any other applicable
Laws or any requirement or request of the Stock Exchange, the SFC and/or the CSRC; or
UNDERWRITING
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--- page 361 ---
(xv) there is a breach of any of the obligations imposed upon any of the Company or the
Controlling Shareholders under the Hong Kong Underwriting Agreement or the
International Underwriting Agreement (including any supplement or amendment
thereto), as applicable; or
(xvi) the general manager, chief financial officer, or any executive Director, of our Company is
vacating his office;
which, individually or in the aggregate, in the opinion of the Joint Sponsors, the Sponsor-OCs,
the Overall Coordinators, the Joint Global Coordinators (for themselves and on behalf of the
Hong Kong Underwriters and the Capital Market Intermediaries) or any of them: (1) has or will
or could reasonably expected to have any material adverse change or effect, or any
development involving a prospective material adverse change or effect, in or affecting (i) the
assets, liabilities, business, properties, general affairs, management, prospects, shareholders’
equity, profits, losses, results of operations, position or condition (financial, operational or
otherwise) or performance of our Group, and (ii) the ability of our Company to perform its
obligations under the Hong Kong Underwriting Agreement, the International Underwriting
Agreement and the Operative Agreements (as defined in the Hong Kong Underwriting
Agreement), including the issuance and sale of the Offer Shares, or to consummate the
transactions contemplated under this prospectus (collectively “Material Adverse Change”); or
(2) has or will have or could reasonably expected to have a Material Adverse Change on the
success or marketability of the Global Offering or the level of applications under the Hong
Kong Public Offering or the level of interest or the distribution of material part of the Offer
Shares under the International Offering; or (3) makes or will make or may make it inadvisable
or inexpedient or impracticable or incapable or not commercially viable for the Global
Offering to proceed or to market the Global Offering or the delivery or distribution of the Offer
Shares on the terms and in the manner contemplated by the Offering Documents (as defined in
the Hong Kong Underwriting Agreement); or (4) has or will have or could reasonably expected
to have the effect of making any material part of the Hong Kong Underwriting Agreement
(including underwriting) incapable of performance in accordance with its terms or preventing
or delaying the processing of any material part of applications and/or payments pursuant to the
Global Offering or pursuant to the underwriting thereof; or
(b) any of the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators and the Joint Global
Coordinators (for themselves and on behalf of the Hong Kong Underwriters and the Capital
Market Intermediaries) shall become aware of the fact that, or have reasonable cause to believe
that:
(i) any statement contained in any of this prospectus, the disclosure package, the preliminary
offering circular, the final offering circular, the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement), the formal notice, and/or in any notices, announcements,
advertisements, communications or other documents (including any announcement,
circular, document or other communication pursuant to the Hong Kong Underwriting
Agreement) which our Company has approved for issue or use by or on behalf of our
Company in connection with the Global Offering (including any supplement or
amendment thereto) (the “Offer Related Documents”) was, when it was issued, or has
become, untrue, incorrect or incomplete in any material respect, misleading or deceptive,
UNDERWRITING
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--- page 362 ---
or that any forecast, estimate, expression of opinion, intention or expectation contained in
any such documents is not fair and honest and based on reasonable assumptions or
reasonable grounds; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material omission
from, or material misstatement in, any of Offer Related Documents; or
(iii) there is a material breach of, or any event or circumstance rendering untrue, incorrect or
incomplete in any material respect or misleading, any of the warranties given by our
Company or our Controlling Shareholders in the Hong Kong Underwriting Agreement or
the International Underwriting Agreement (including any supplement or amendment
thereto), as applicable; or
(iv) the approval by the Listing Committee of the Stock Exchange of the listing of, and
permission to deal in, the H Shares to be issued or sold (including any additional H Shares
that may be issued or sold pursuant to the exercise of the Over-allotment Option) under
the Global Offering is refused or not granted, other than subject to customary conditions,
on or before the date of the Listing, or if granted, the approval is subsequently withdrawn,
cancelled, qualified (other than subject to customary conditions), revoked or withheld; or
(v) the CSRC Filings (as defined in the Hong Kong Underwriting Agreement) and the
published filing results in respect of the CSRC Filings (as defined in the Hong Kong
Underwriting Agreement) on its website have been revoked, withdrawn, rejected or
terminated; or
(vi) our Company withdraws this prospectus, the preliminary offering circular, the final
offering circular or the Global Offering; or
(vii) any experts (other than the Joint Sponsors) described under “Statutory and General
Information—5. Other Information—G. Qualification of Experts” in Appendix IV to this
prospectus has withdrawn its consent to the issue of this prospectus with the inclusion of
its report, letters, and/or opinions (as the case may be) and references to its name included
in the form and context in which it respectively appears; or
(viii) there is a prohibition on our Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares (including pursuant to any exercise of the
Over-allotment Option) pursuant to the terms of the Global Offering; or
(ix) a significant portion of the orders placed or confirmed in the book building process have
been withdrawn, terminated or canceled.
UNDERWRITING
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Undertakings given to the Stock Exchange pursuant to the Listing Rules
By our Controlling Shareholders
Pursuant to Rules 10.07 and 18C.13 of the Listing Rules, each of our Controlling Shareholders has
irrevocably and unconditionally undertaken to us and to the Stock Exchange that except pursuant to the
Global Offering, or the Over-allotment Option, it/he shall not and shall procure that the relevant
registered Shareholder(s) controlled by it/him shall not, in the period commencing on the date by
reference to which disclosure of its/his shareholdings in our Company is made in this prospectus and
ending on the date which is 12 months from the Listing Date, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances (save as pursuant to a pledge
or charge as security in favor of an authorized institution (as defined in the Banking Ordinance (Chapter
155 of the Laws of Hong Kong) for a bona fide commercial loan) in respect of, any of our securities that
it/he is shown to beneficially own in this prospectus.
Each of our Controlling Shareholders has further irrevocably and unconditionally undertaken to us
and the Stock Exchange that, within the period commencing on the date by reference to which disclosure
of its/his shareholdings in our Company is made in this prospectus and ending on the date which is 12
months from the Listing Date, it/he will:
(a) when it/he pledges or charges any securities in our Company beneficially owned by it/him in
favor of an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)) for a bona fide commercial loan pursuant to Note (2) to Rule 10.07(2) of
the Listing Rules, immediately inform us in writing of such pledge or charge together with the
number of our securities 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/him will be disposed of,
immediately inform us in writing of such indications.
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 by any of our Controlling Shareholders and make a public disclosure
in relation to such information by way of an announcement in accordance with the Listing Rules.
UNDERWRITING
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By the Key Persons
Pursuant to Rule 18C.14(1) of the Listing Rules, each of the key persons and their close associates
(the “Key Persons”), comprising Mr. Liu, Yuejiang LP, Qinmo LP, Mr. Lang Xulin and Mr. Wu Zhiwen,
has irrevocably and unconditionally undertaken to us and to the Stock Exchange that except pursuant to
the Global Offering, or the Over-allotment Option, it/he/she shall not and shall procure that its/his/her
respective close associates and the relevant registered Shareholder(s) controlled by it/him/her shall not,
in the period commencing on the date by reference to which disclosure of its/his/her shareholdings (or
its/his/her respective close associate’s shareholdings, if applicable) in our Company is made in this
prospectus and ending on the date which is 12 months from the Listing Date, dispose of, nor enter into
any agreement to dispose of or otherwise create any options, rights, interests or encumbrances (save as (i)
pursuant to a pledge or charge as security in favor of an authorized institution (as defined in the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong) for a bona fide commercial loan, or (ii) disposing any
interest in such securities of our Company in the circumstances provided under Rule 18C.15 of the
Listing Rules) in respect of, any of our securities that it/he/she (or its/his/her respective close associate,
if applicable) is shown to beneficially own in this prospectus.
In accordance with Note 2 to Rule 18C.14 of the Listing Rules, each of the Key Persons has further
irrevocably and unconditionally undertaken to us and the Stock Exchange, and shall procure its/his/her
respective close associates, that within the period commencing on the date by reference to which
disclosure of its/his/her shareholdings (or its/his/her respective close associate’s shareholdings, if
applicable) in our Company is made in this prospectus and ending on the date which is 12 months from
the Listing Date, it/he/she will:
(a) when it/he/she (or its/his/her respective close associate) pledges or charges any securities in
our Company beneficially owned by it/him/her (or by its/his/her respective close associate) in
favor of an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)), immediately inform us in writing of such pledge or charge together with
the number of our securities so pledged or charged; and
(b) when it/he/she (or its/his/her respective close associate) receives indications, either verbal or
written, from the pledgee or chargee that any of our pledged or charged securities beneficially
owned by it/him/her (or by its/his/her respective close associate) will be disposed of,
immediately inform us in writing of such indications.
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 by any of the Key Persons and make a public disclosure in relation to
such information by way of an announcement in accordance with the Listing Rules.
UNDERWRITING
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By Pathfinder SIIs
Pursuant to Rule 18C.14(2) of the Listing Rules, each of the Pathfinder SIIs has irrevocably and
unconditionally undertaken to us and to the Stock Exchange that except pursuant to the Global Offering,
or the Over-allotment Option, it shall not, and shall procure that the relevant registered holder(s) shall
not, 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 6 months from the Listing Date,
dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or
encumbrances (save as (i) pursuant to a pledge or charge as security in favor of an authorized institution
(as defined in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) for a bona fide
commercial loan, or (ii) disposing any interest in such securities of our Company in the circumstances
provided under Rule 18C.15 of the Listing Rules) in respect of, any of our securities that it is shown to
beneficially own in this prospectus.
In accordance with Note 2 to Rule 18C.14 of the Listing Rules, each of the Pathfinder SIIs has
further irrevocably and unconditionally undertaken to us and the Stock Exchange that, within 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 6 months from the Listing Date, it will:
(a) when it pledges or charges any securities in our Company beneficially owned by it in favor of
an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the Laws of
Hong Kong)), immediately inform us in writing of such pledge or charge together with the
number of our securities so pledged or charged; and
(b) when it 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 in writing of such indications.
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 by any of the Pathfinder SIIs and make a public disclosure in relation
to such information by way of an announcement in accordance with the Listing Rules.
UNDERWRITING
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Undertakings given to the Hong Kong Underwriters
Undertakings by our Company
Our Company has undertaken to each of the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong
Kong Underwriters and the Capital Market Intermediaries that except for the offer and sale of the Offer
Shares pursuant to the Global Offering (including pursuant to the Over-allotment Option), during the
period commencing on the date of the Hong Kong Underwriting Agreement and ending on, and including,
the date that is 6 months after the Listing Date (the “First Six-Month Period”), we will not, without the
prior written consent of the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators and the Joint
Global 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) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to allot,
issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option, warrant,
contract or right to subscribe for or purchase, grant or purchase any option, warrant, contract or
right to allot, issue or sell, or otherwise transfer or dispose of or create a mortgage, charge,
pledge, lien or other security interest or any option, restriction, right of first refusal, right of
pre-emption or other third party claim, right, interest or preference or any other encumbrance
of any kind (“Encumbrance”) over, or agree to transfer or dispose of or create an Encumbrance
over, either directly or indirectly, conditionally or unconditionally, any H Shares or any other
securities of our Company, as applicable, or any interest in any of the foregoing (including,
without limitation, any securities convertible into or exchangeable or exercisable for or that
represent the right to receive, or any warrants or other rights to purchase, any H Shares or any
shares or other securities of our Company; 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 H Shares or any other shares or securities of our
Company, as applicable, or any interest in any of the foregoing (including, without limitation,
any securities convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to purchase, any H Shares or any shares or other
securities of our Company); or
(c) enter into any transaction with the same economic effect as any transaction specified in (a) or
(b) above; or
(d) offer to or agree to or announce any intention to effect any transaction specified in (a), (b) or
(c) above.
UNDERWRITING
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in each case, whether any of the transactions specified in (a), (b) or (c) above is to be settled by delivery
of H Shares or such other securities of our Company, or in cash or otherwise (whether or not the issue of
H Shares or such other securities will be completed within the First Six-Month Period).
In the event that, during the period of six months commencing on the date on which the First
Six-Month Period expires (the “Second Six-Month Period”), our Company enters into any of the
transactions specified in (a), (b) or (c) above or offers to or agrees to or announces any intention to effect
any such transaction, our Company shall ensure that it will not create a disorderly or false market in the
securities of our Company. The warrantors (being our Controlling Shareholders and other than our
Company) undertakes to each of the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and
the Capital Market Intermediaries to procure our Company to comply with the undertakings in the Hong
Kong Underwriting Agreement.
By our Controlling Shareholders
Our Controlling Shareholders have undertaken to each of our Company, the Joint Sponsors, the
Sponsor-OCs, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Hong Kong Underwriters and the Capital Market Intermediaries that, except as
pursuant to the Global Offering (including the issue of H Shares pursuant to the exercise of the
Over-allotment Option) without the prior written consent of the Joint Sponsors, the Sponsor-OCs, the
Overall Coordinators and the Joint Global 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 (including Rule 10.07(3) of the Listing Rules and Note (2) to Rule 10.07(2) of the
Listing Rules), it/he will not, and will procure that the relevant registered holder(s) will not, at any time
during the 12 months from the Listing Date,
(a) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant
or sell any option, warrant, contract or right to purchase, grant or purchase any option, warrant,
contract or right to sell, or otherwise transfer or dispose of or create any mortgage, charge,
pledge, lien or other security interest or any option, restriction, right of first refusal, right of
pre-emption or other third party claim, right, interest or preference or any other encumbrance
of any kind (an “Encumbrance”) over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indirectly, conditionally or unconditionally, any H Shares
or any 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 H Shares, or any such other securities
or any interest in any of the foregoing, as applicable) (the “Relevant H Shares”) or any interest
in any company or entity holding, directly or indirectly, any of the Relevant H Shares (the
“Holding Entity”);
(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 H Shares or the interest in any
Holding Entity;
(c) enter into any transaction with the same economic effect as any transaction specified in (a) or
(b) above; or
UNDERWRITING
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--- page 368 ---
(d) offer 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 H Shares or such other securities of our Company, as applicable, or in
cash or otherwise (whether or not the issue of H Shares or such other securities will be
completed within the aforesaid period).
Notwithstanding anything to the contrary contained in the above, our Controlling Shareholders shall
not be prevented from conducting any of the actions in relation to any Relevant H Shares as set out in the
above if it/he would remain as the sole beneficial owner (whether direct or indirect) of such Relevant H
Shares as a result of any such action.
Each of our Controlling Shareholders has further undertaken to each of our Company, the Joint
Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries that, within the period commencing on the date of this prospectus and ending on the date
which is 12 months after the Listing Date, it/he will immediately inform our Company, the Joint
Sponsors, the Sponsor-OCs, the Overall Coordinators and the Joint Global Coordinators of:
(i) any pledges or charges of any H Shares or other securities (including any interests therein) of
our Company beneficially owned by it/him, together with the number of H Shares or other
securities (including any interests therein) of our Company so pledged or charged and the
purpose for which such pledge or charge is to be created; and
(ii) any indication received by it/him, either verbal or written, from the pledgee or chargee of any
H Shares or other securities (including any interests therein) of our Company pledged or
charged that such H Shares or other securities (including any interests therein) of our Company
so pledged or charged will be disposed of.
Notwithstanding anything to the contrary contained in the above, our Controlling Shareholders shall
not be prevented from the disposal of any of the Shares in respect of which it/he is shown in this
prospectus to be a beneficial owner (whether direct or indirect) in the following circumstances: (i)
pursuant to a pledge or charge in favor of any authorised institution (as defined in the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong)), as security for a bona fide commercial loan; (ii) pursuant to a
power of sale under the pledge or charge (granted pursuant to (i) above); or (iii) in any other exceptional
circumstances to which the Stock Exchange has given its prior approval.
Underwriters’ interest in our Group
Save for their respective obligations under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement, 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 H Shares as a result of fulfilling their respective obligations under the
Hong Kong Underwriting Agreement and International Underwriting Agreement.
UNDERWRITING
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The Joint Sponsors’ Independence
Each of the Joint Sponsors satisfies the independence criteria set out in Rule 3A.07 of the Listing
Rules.
The International Offering
International Underwriting Agreement
In connection with the International Offering, 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 Offer Shares or procure
purchasers for the International Offer Shares initially being offered pursuant to the International
Offering. See “Structure and Conditions of the Global Offering—The International Offering” in this
prospectus.
Under the International Underwriting Agreement, we intend to grant to the International
Underwriters and the Capital Market Intermediaries 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 and the Joint
Global Coordinators (for themselves and 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 6,000,000 additional Offer Shares, representing
15.0% 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 Offering, if any.
Total Commission and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting commission
equal to 2.5% of the aggregate Offer Price of all the Offer Shares, including Offer Shares to be issued
pursuant to the Over-Allotment Option (the “Fixed Fees”). Our Company may, at our sole and absolute
discretion, pay to all the Underwriters and the Capital Market Intermediaries an incentive fee not
exceeding 2.0% of the Offer Price of all the Offer Shares (including Offer Shares to be issued pursuant to
the Over-Allotment Option) (collectively, the “Discretionary Fees”).
The ratio of Fixed Fees and Discretionary Fees payable to all Underwriters and the Capital Market
Intermediaries is therefore approximately 56:44. For unsubscribed Hong Kong Offer Shares reallocated
to the International Offering, we will pay an underwriting commission at the rate applicable to the
International Offering and such commission will be paid to the relevant International Underwriters (and
not the Hong Kong Underwriters). No additional fee will be payable by our Company to the Underwriters
and the Capital Market Intermediaries. The Joint Sponsors will, in addition, receive a fee acting as the
sponsor to the Listing and will be reimbursed for their expenses.
Assuming the Over-Allotment Option, if any, is not exercised and based on an Offer Price of
HK$19.80 (being the mid-point of the stated range of the Offer Price between HK$18.80 and HK$20.80),
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, payable by our Company relating to the Global Offering, are
estimated to amount in aggregate to HK$72.4 million in total and are payable by us.
UNDERWRITING
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--- page 370 ---
Indemnity
We have undertaken to indemnify and keep indemnified on demand (on an after-tax basis) and hold
harmless each of the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the
Capital Market Intermediaries (for themselves and on trust for its directors, supervisors, officers,
employees, agents, assignees and affiliates) from and against certain losses which they may suffer,
including liabilities under the U.S. Securities Act, losses arising from their performance of their
obligations under the Underwriting Agreements and any breach by us of the Underwriting Agreements, as
the case may be.
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.
Over-Allotment and Stabilization
Details of the arrangements relating to the stabilization and Over-allotment Option, if any, are set
forth in “Structure and Conditions of the Global Offering—Stabilization,” and “Structure and Conditions
of the Global Offering—Over-allotment Option.”
Activities by Syndicate Members
The Hong Kong Underwriters and the International Underwriters (together, the “Syndicate
Members”) and their respective affiliates may each individually undertake a variety of activities (as
further described below) which do not form part of the underwriting or stabilizing process.
The Syndicate Members and their respective 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 or 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 of our
Company and/or persons and entities in relation 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.
UNDERWRITING
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In relation to the H Shares, the activities of the Syndicate Members or their respective 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 (the
financing of which 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 or 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 the Syndicate Members or their respective affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any other stock
exchange, the rules of the stock exchange may require the issuer of those securities (or one of its affiliates
or agents) to act as a market maker or liquidity provider in the security, and this will also result in hedging
activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period as described in
the section headed “Structure and Conditions of the Global Offering” in this prospectus. Such activities
may affect the market price or value of the H Shares, the liquidity or trading volume in the H Shares and
the volatility of the price of the H Shares, and the extent to which this occurs from day to day cannot be
estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members or their
respective affiliates will be subject to certain restrictions, including the following:
(a) the Syndicate Members or their respective affiliates (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 or their respective affiliates must comply with all applicable laws and
regulations, including the market misconduct provisions of the SFO which includes the
provisions prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
The Syndicate Members or their respective affiliates have provided from time to time, and expect to
provide in the future, investment banking, derivative and other services to us and our affiliates, for which
the 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 2,000,000 Offer Shares (subject to reallocation as
mentioned below) in Hong Kong as described below in the paragraph headed “The Hong Kong
Public Offering”; and
• the International Offering of initially 38,000,000 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 as described below in the paragraph headed “The International Offering.”
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public Offering or
indicate an interest, if qualified to do so, for the International Offer Shares under the International
Offering, but may not do both.
The 40,000,000 Offer Shares in the Global Offering will represent 10.0% 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 11.3% 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
Hong Kong 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 2,000,000 Offer Shares,
representing 5.0% of the total number of Offer Shares initially available under the Global Offering.
Subject to the reallocation of Offer Shares between the International Offering and the Hong Kong Public
Offering, the number of Offer Shares offered under the Hong Kong Public Offering will represent 0.5% of
our enlarged issued share capital immediately after completion of the Global Offering, assuming the
Over-allotment Option is not exercised.
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.”
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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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 (subject to the reallocation of the Offer Shares between
the Hong Kong Public Offering and the International Offering referred to below):
• 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 1,000,000
Hong Kong Offer Shares will be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the International
Offering is subject to reallocation under the Listing Rules. Paragraph 4.2 of Practice Note 18 of the
Listing Rules (as modified by Rule 18C.09 of the Listing Rules) requires a clawback mechanism to be put
in place which would have the effect of increasing the number of Offer Shares under the Hong Kong
Public Offering to a certain percentage of the total number of Offer Shares offered under the Global
Offering if the International Offer Shares are fully subscribed or over-subscribed and certain prescribed
total demand levels are reached. In accordance with paragraph 4.2 of Practice Note 18 of the Listing
Rules (as modified by Rule 18C.09 of the Listing Rules), if the number of Shares validly applied for
under the Hong Kong Public Offering represents (i) 10 times or more but less than 50 times, and (ii) 50
times or more, of the number of Offer Shares initially available under the Hong Kong Public Offering, the
total number of Offer Shares available under the Hong Kong Public Offering will be increased to
4,000,000 Offer Shares and 8,000,000 Offer Shares, respectively, representing 10.0% (in the case of (i))
and 20.0% (in the case of (ii)), respectively, of the total number of Offer Shares initially available
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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under the Global Offering (before any exercise of the Over-allotment Option). In each case, the number of
Offer Shares to be allocated to the International Offering will be correspondingly reduced and the
additional Offer Shares will be allocated between Pool A and Pool B in such manner as the Overall
Coordinators deem appropriate.
The Overall Coordinators may, at their discretion, reallocate Offer Shares initially allocated for the
International Offering to the Hong Kong Public Offering to satisfy valid applications in Pool A and Pool
B in accordance with Chapter 4.14 of the Guide as follows: if (i) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed irrespective of
the number of times; or (ii) the International Offer Shares are fully subscribed or oversubscribed and the
Hong Kong Offer Shares are oversubscribed by less than 10 times of the number of Offer Shares initially
available under the Hong Kong Public Offering, provided that the Offer Price would be fixed at HK$18.80
per Offer Share, the low-end of the Offer Price range stated in this Prospectus, up to 2,000,000 Offer
Shares may be reallocated to the Hong Kong Public Offering from the International Offering, so that the
total number of the Offer Shares available under the Hong Kong Public Offering will be increased to
4,000,000 Offer Shares, representing 10.0% of the number of the Offer Shares initially available under
the Global Offering.
The Offer Shares to be offered in the Hong Kong Public Offering and the International Offering may
be reallocated as between these offerings at the discretion of the Overall Coordinators (for themselves
and on behalf of the Underwriters). The Overall Coordinators may reallocate Offer Shares from the
International Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong
Kong Public Offering, in such proportions as the Overall Coordinators may, in their sole and absolute
discretion, determine, subject to the requirements under Chapter 4.14 of the Guide.
If the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators may reallocate
all or any unsubscribed Hong Kong Offer Shares to the International Offering, in such proportions as the
Overall Coordinators may, in their sole and absolute discretion, determine.
Where the International Offer Shares are undersubscribed, if the Hong Kong Offer Shares are also
undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe or
procure subscribers for their respective applicable proportions of the Offer Shares being offered which
are not taken up under the Global Offering on the terms and conditions of this Prospectus and the
Underwriting Agreements.
Applications
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 Offer Shares under the International Offering, 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 Offer Shares
under the International Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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Applicants under the Hong Kong Public Offering may be required to pay, on application (subject to
application channels), maximum price of HK$20.80 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$4,201.96 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$20.80 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, without interest. For further details, see “How to Apply for Hong Kong Offer Shares”.
THE INTERNATIONAL OFFERING
Number of Offer Shares Initially Offered
We will be initially offering for subscription under the International Offering 38,000,000 Offer
Shares, representing 95.0% of the Offer Shares under the Global Offering. Subject to the reallocation of
Offer Shares between the International Offering and the Hong Kong Public Offering, the number of Offer
Shares offered under the International Offering will represent 9.5% of our enlarged issued share capital
immediately after completion of the Global Offering, assuming the Over-allotment Option is not
exercised.
Allocation
The International Offer 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 Offer Shares under the International
Offering they would be prepared to acquire either at different prices or at a particular price. This process,
known as “ book-building ,” is expected to continue up to the Price Determination Date.
Allocation of the International Offer Shares pursuant to the International Offering 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. Such allocation is intended to result in a
distribution of the International Offer Shares on a basis which would lead to the establishment of a solid
professional and institutional shareholder base to the benefit of our Company and our Shareholders as a
whole.
The Overall Coordinators 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
Offering 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 AND CONDITIONS OF THE GLOBAL OFFERING
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Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering 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 and the Joint Global 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
6,000,000 H Shares, representing 15.0% of the Offer Shares initially available under the Global Offering,
at the Offer Price under the International Offering to, among other things (such as effecting the permitted
stabilizing actions as set out in the section headed “Stabilization” below), cover over-allocations in the
International Offering, 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 its affiliates 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 its affiliates or any person acting for it) to conduct any such
stabilizing action. Such stabilizing action, if taken, (a) will be conducted at the absolute discretion of the
Stabilizing Manager (or its affiliates or any person acting for it) and in what the Stabilization Manager
reasonably regards as the best interest of our Company, (b) may be discontinued at any time, and (c) is
required to be brought to an end within 30 days of the last day for lodging applications under the Hong
Kong Public Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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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 its affiliates 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 its affiliates or any person acting for it) will maintain such a long position;
• liquidation of any such long position by the Stabilizing Manager (or its affiliates 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 Friday,
January 17, 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.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up to an
aggregate of 6,000,000 H Shares, representing up to 15% of the initial Offer Shares, through delayed
delivery arrangements with investors who have been allocated Offer Shares in the International Offering.
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 consideration for the Offer Shares allocated to such
investor will be settled before the Listing Date. Both the size of such cover and the extent to which the
Over-allotment Option can be exercised will depend on whether arrangements can be made with investors
such that a sufficient number of H Shares can be delivered on a delayed basis. If no investor in the
International Offering agrees to the delayed delivery arrangements, no stabilizing actions will be
undertaken by the Stabilizing Manager and the Over-allotment Option will not be exercised.
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.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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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.
PRICING AND ALLOCATION
Our Company, the Overall Coordinators and the Joint Global 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 Thursday, December 19, 2024.
The Offer Price will not be more than HK$20.80 per Offer Share and is expected to be not less than
HK$18.80 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 pay the maximum price of HK$20.80 per
Offer Share (subject to application channels), plus brokerage of 1.0%, SFC transaction levy of 0.0027%,
AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565%, amounting to a total of
HK$4,201.96 for one board lot of 200 H Shares.
If the Offer Price, as finally determined in the manner described below, is lower than HK$20.80, 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. We will not pay interest on
any refunded amounts. For more details, see “How to Apply for Hong Kong Offer Shares”.
The International Underwriters will be soliciting from prospective investors indications of interest
in acquiring Offer Shares in the International Offering. Prospective professional and institutional
investors will be required to specify the number of Offer Shares under the International Offering they
would be prepared to acquire either at different prices or at a particular price. This process, known as
“book-building,” is expected to continue up to, and to cease on or around, the last day for lodging
applications under the Hong Kong Public Offering.
The Overall Coordinators and the Joint Global 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 and publish an announcement or supplemental prospectus on the website of the Stock
Exchange at www.hkexnews.hk and our websites at www.dobot.cn (with respect to Chinese version) and
www.dobot-robots.com (with respect to English version) (the contents of the websites do not form a part
of this prospectus). Upon issue of such an announcement, 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. Our Company will also, as soon as practicable following the decision to
make such change, issue a supplemental prospectus updating investors of the change in the number of
Offer Shares being offered under the Global Offering and/or the Offer Price. The Global Offering must
first be canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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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 use of proceeds, the Global Offering statistics as currently set out in “Summary”, and any other
financial information which may change as a result of such reduction. In the absence of any such notice
so published, the number of Offer Shares will not be reduced and the Offer Price, if agreed upon with the
Company, the Overall Coordinators and the Joint Global 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.
The final Offer Price, the level of indication of interest in the International Offering, the basis of
allotment of Offer Shares available under the Hong Kong Public Offering and the Hong Kong
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 Hong
Kong Offer Shares—B. Publication of Results”.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares is conditional on:
• the Listing Committee 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 Offer Shares
which may be issued pursuant to the exercise of the Over-allotment Option);
• the Offer Price having been agreed between us, the Overall Coordinators and the Joint Global
Coordinators (for themselves and 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 Sunday, January 12,
2025, being the 30th day after the date of this prospectus.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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If, for any reason, the Offer Price is not agreed between the Overall Coordinators and the Joint
Global Coordinators (for themselves and on behalf of the Underwriters) and us on or before Thursday,
December 19, 2024, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International Offering is
conditional upon, 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 the website of the Stock Exchange at www.hkexnews.hk and our websites at www.dobot.cn
(with respect to Chinese version) and www.dobot-robots.com (with respect to English version) on the
next day following such lapse. In such an event, all application monies will be returned, without interest,
on the terms set out in “How to Apply for 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, the Overall
Coordinators and the Joint Global Coordinators (for themselves and on behalf of the Underwriters) and us
agreeing on the Offer Price on the Price Determination Date.
We expect to enter into the International Underwriting Agreement relating to the International
Offering 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”.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the Offer
Shares being offered under the Global Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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ADMISSION OF THE H SHARES INTO CCASS
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and our Company
complies with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible
securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of
commencement of dealings in the H Shares on the Stock Exchange or any other date HKSCC chooses.
Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS
on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in
Hong Kong on Monday, December 23, 2024, it is expected that dealings in our H Shares on the Stock
Exchange will commence at 9:00 a.m. on Monday, December 23, 2024.
The H Shares will be traded in board lots of 200 H Shares each.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk under
the “HKEXnews > New Listings > New Listing Information” section, and our websites at
www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com (with respect to
English version).
The contents of this prospectus are identical to the prospectus as registered with the Registrar
of Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
• are 18 years of age or older; and
• have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer Shares if you or
the person(s) for whose benefit you are applying for:
• are an existing Shareholder or close associates; or
• are a Director, supervisor or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Friday, December 13, 2024 and
end at 12:00 noon on Wednesday, December 18, 2024 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO service .. www.eipo.com.hk Investors who would like to
receive a physical H Share
certificate. Hong Kong Offer
Shares successfully applied
for will be allotted and issued
in your own name.
From 9:00 a.m. on Friday,
December 13, 2024 to
11:30 a.m. on Wednesday,
December 18, 2024, Hong
Kong time. The latest time for
completing full payment of
application monies will be
12:00 noon on Wednesday,
December 18, 2024, Hong
Kong time.
HKSCC EIPO channel .... Y o u r broker or custodian who
is a HKSCC Participant will
submit electronic application
instructions 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 White Form eIPO service and the HKSCC EIPO channel are facilities subject to capacity
limitations and potential service interruptions and you are advised not to wait until the last day of the
application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment in respect of
any application instructions given by you or for your benefit through the White Form eIPO 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 White Form eIPO 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 384 ---
If you apply through the White Form eIPO service, you are deemed to have authorized the White
Form eIPO Service Provider to apply on the terms and conditions in this prospectus, as supplemented
and amended by the terms and conditions of the White Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you jointly and
severally) are deemed to have instructed and authorized HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to apply for Hong Kong Offer Shares on your behalf and
to do on your behalf all the things stated in this prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed to have
been made for any application instructions given by you or for your benefit to HKSCC (in which case an
application will be made by HKSCC Nominees on your behalf) provided such application instruction has
not been withdrawn or otherwise invalidated before the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor HKSCC
Nominees shall be liable to you or any other person in respect of any actions taken by HKSCC or HKSCC
Nominees on your behalf to apply for Hong Kong Offer Shares or for any breach of the terms and
conditions of this prospectus.
3. Information Required to Apply
You must provide the following information with your application:
For Individual Applicants For Corporate Applicants
• Full name(s) 2 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. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
• Identity document number
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 385 ---
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail address, a
contact telephone number and a Hong Kong address. You are also required to declare that the identity information
provided by you follows the requirements as described in Note 2 below. In particular, where you cannot provide a
HKID number, you must confirm that you do not hold a HKID card. The number of joint applicants may not exceed
four. If you are a firm, the applicant must be in the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used. 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.
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
(Note) 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.
Note: Subject to change, if our Articles of Association and applicable company law prescribe a lower cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 386 ---
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size ......................... 2 0 0H Shares
Permitted number of Hong Kong Offer Shares
for application and amount payable on
application/
successful allotment ...................
Hong Kong Offer Shares are available for
application in specified board lot sizes only.
Please refer to the amount payable associated
with each specified board lot size in the table
below.
The maximum Offer Price is HK$20.80 per H
Share.
If you are applying through the HKSCC EIPO
channel, you are required to prefund your
application based on the amount specified by
your broker or custodian, as determined based
on the applicable laws and regulations in
Hong Kong.
By instructing your broker or custodian to
apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel,
you (and, if you are joint applicants, each of
you jointly and severally) are deemed to have
instructed and authorized HKSCC to cause
HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange
payment of the final Offer Price, brokerage,
SFC transaction levy, the Stock Exchange
trading fee and the AFRC transaction levy by
debiting the relevant nominee bank account at
the Designated Bank for your broker or
custodian.
If you are applying through the White Form
eIPO service, you may refer to the table
below for the amount payable for the number
of H Shares you have selected. You must pay
the respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 387 ---
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
HK$ HK$ HK$ HK$
200 4,201.96 3,000 63,029.30 40,000 840,390.72 300,000 6,302,930.40
400 8,403.90 4,000 84,039.07 50,000 1,050,488.40 350,000 7,353,418.80
600 12,605.87 5,000 105,048.85 60,000 1,260,586.08 400,000 8,403,907.20
800 16,807.81 6,000 126,058.61 70,000 1,470,683.75 450,000 9,454,395.60
1,000 21,009.77 7,000 147,068.38 80,000 1,680,781.45 500,000 10,504,884.00
1,200 25,211.72 8,000 168,078.14 90,000 1,890,879.12 600,000 12,605,860.80
1,400 29,413.68 9,000 189,087.91 100,000 2,100,976.80 700,000 14,706,837.60
1,600 33,615.63 10,000 210,097.68 150,000 3,151,465.20 800,000 16,807,814.40
1,800 37,817.59 20,000 420,195.35 200,000 4,201,953.60 900,000 18,908,791.20
2,000 42,019.53 30,000 630,293.05 250,000 5,252,442.00 1,000,000
(1) 21,009,768.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer Shares
initially offered
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in
the Listing Rules) or to the White Form eIPO Service Provider (for applications made through the application channel
of the White Form eIPO Service Provider) while the SFC transaction levy, the Stock Exchange trading fee and the
AFRC transaction levy will be paid to the SFC, the Stock Exchange and the AFRC, respectively.
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own benefit, except
where you are a nominee and provide the information of the underlying investor in your application as
required under “—A. Application for Hong Kong Offer Shares—3. Information Required to Apply”. 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 White Form eIPO service, (ii) HKSCC EIPO
channel, or (iii) both channels concurrently are prohibited and will be rejected. If you have made an
application through the White Form eIPO service or HKSCC EIPO channel, you or the person(s) for
whose benefit you have made the application shall not apply further for any Offer Shares in the Global
Offering.
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6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or HKSCC EIPO
channel, you (or as the case may be, HKSCC Nominees will do the following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the Overall
Coordinator, as our agents, to execute any documents for you and to do on your behalf all
things necessary to register any Hong Kong Offer Shares allocated to you in your name or in
the name of HKSCC Nominees as required by the Articles of Association, and (if you are
applying through the HKSCC EIPO channel) to deposit the allotted Hong Kong Offer Shares
directly into CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(ii) confirm that you have read and understand the terms and conditions and application procedures
set out in this prospectus and the designated website of the White Form eIPO service (or as
the case may be, the agreement you entered into with your broker or custodian), and agree to be
bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or custodian
and HKSCC and observe the General Rules of HKSCC and the HKSCC Operational
Procedures for giving application instructions to apply for Hong Kong Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have made the
application;
(v) confirm that you have read this prospectus and any supplement to it and have relied only on the
information and representations contained therein in making your application (or as the case
may be, causing your application to be made) and will not rely on any other information or
representations;
(vi) agree that the Relevant Persons
Note , 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 “—G. Personal
Data—3. Purposes” and “—G. Personal Data—4. Transfer of personal data”;
(viii) agree (without prejudice to any other rights which you may have once your application (or as
the case may be, HKSCC Nominees’ application) has been accepted) that you will not rescind
it because of an innocent misrepresentation;
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(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your behalf
cannot be revoked once it is accepted, which will be evidenced by the notification of the result
of the ballot by the H Share Registrar by way of publication of the results at the time and in the
manner as specified in “—B. Publication of Results”;
(x) confirm that you are aware of the situations specified in “—C. Circumstances In Which You
Will Not Be Allocated Hong Kong Offer Shares”;
(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,
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,
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 H Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong Kong Offer
Shares to you and 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 White Form eIPO Service Provider or
by any one as your agent or by any other person; and
HOW TO APPLY FOR HONG KONG OFFER SHARES
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(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 and the White Form eIPO Service Provider and (2) you
have due authority to give electronic application instructions on behalf of that other person as
its agent.
Note: The Relevant Persons would include the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, any of their or the Company’s respective directors, supervisors,
officers, employees, partners, agents, advisers and any other parties involved in the Global Offering.
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through the White
Form eIPO service or
HKSCC EIPO channel:
Website ..............
The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a “search
by ID Number” function.
The full list of (i) wholly or partially successful
applicants using the White Form eIPO service and
HKSCC EIPO channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted to them,
among other things, will be displayed on the
“Allotment Results” page of the White Form eIPO
service at www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
24 hours, from 11:00 p.m. on Friday,
December 20, 2024 to 12:00 midnight
on Thursday, December 26, 2024
(Hong Kong time)
The Stock Exchange’s website at www.hkexnews.hk
and our websites at www.dobot.cn (with respect to
Chinese version) and www.dobot-robots.com (with
respect to English version) which will provide links
to the above mentioned websites of the H Share
Registrar.
No later than 11:00 p.m. on Friday,
December 20, 2024 (Hong Kong time)
Telephone ............. +852 2862 8555—the allocation results telephone
enquiry line provided by the H Share Registrar
between 9:00 a.m. and 6:00 p.m., from
Monday, December 23, 2024 to
Monday, December 30, 2024 (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 Thursday, December 19, 2024 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, December 19, 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 International Offering, the level of applications in the Hong Kong Public Offering and the basis
of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk
and our websites at www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com
(with respect to English version) by no later than 11:00 p.m. on Friday, December 20, 2024 (Hong
Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG OFFER
SHARES
You should note the following situations in which Hong Kong Offer Shares will not be allocated to
you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be revoked
pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees
have full discretion to reject or accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the H Shares either:
• within three weeks from the closing date of the application lists; or
• within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
• you make multiple applications or suspected multiple applications. You may refer to
“—A. Application for Hong Kong Offer Shares—5. Multiple Applications Prohibited” 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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• the Underwriting Agreements do not become unconditional or are terminated;
• we or the Overall Coordinators believe that by accepting your application, it or we would
violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants
will be required to hold sufficient application funds on deposit with their Designated Bank before
balloting. After balloting of Hong Kong Offer Shares, the Receiving Bank will collect the portion of
these funds required to settle each HKSCC Participant’s actual Hong Kong Offer Share allotment
from their Designated Bank.
There is a risk of money settlement failure . In the extreme event of money settlement failure
by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in settling payment
for your allotted shares, HKSCC will contact the defaulting HKSCC Participant and its Designated
Bank to determine the cause of failure and request such defaulting HKSCC Participant to rectify or
procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected Hong
Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the settlement
failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares due to the money
settlement failure by such HKSCC Participant. None of us, the Relevant Persons, the H Share
Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to you due to
the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you under the
Hong Kong Public Offering (except pursuant to applications made through the HKSCC EIPO channel
where the H Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will be issued
for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on Monday, December 23, 2024 (Hong
Kong time), provided that the Global Offering has become unconditional and the right of termination
described in “Underwriting” has not been exercised. Investors who trade H Shares prior to the receipt of
H Share certificates or the H Share certificates becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus application
monies pending clearance of application monies.
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The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
For physical share certificates of
500,000 or more Offer Shares issued
under your own name ...........
Collection in person at the H Share
Registrar, Computershare Hong Kong
Investor Services Limited at Shops
1712-1716, 17th Floor, Hopewell Centre,
183 Queen’s Road East, Wan Chai, Hong
Kong.
Time: 9:00 a.m. to 1:00 p.m. on Monday,
December 23, 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 H Share
certificate(s) personally within the time
above, it/they will be sent to the address
specified in your application instructions
by ordinary post at your own risk
For physical share certificates of less
than 500,000 Offer Shares issued
under your own name ...........
Your H Share certificate(s) will be sent to
the address specified in your application
instructions by ordinary post at your own
risk
Date: Friday, December 20, 2024
HOW TO APPLY FOR HONG KONG OFFER SHARES
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White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date ....................... Monday, December 23, 2024 Subject to the arrangement between
you and your broker or custodian
Responsible party ............. H Share Registrar Your broker or custodian
Application monies paid through
single bank account ............
White Form e-Refund payment
instructions to your designated bank
account
Your broker or custodian will arrange
refund to your designated bank account
subject to the arrangement between you
and it
Application monies paid through
multiple bank accounts ..........
Refund cheque(s) will be despatched to the
address as specified in your application
instructions by ordinary post at your own
risk
Note: Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or an
“extreme conditions” announcement issued after a super typhoon in force in Hong Kong in the morning on Friday,
December 20, 2024 rendering it impossible for the relevant H Share certificates to be dispatched to HKSCC in a timely
manner, the Company shall procure the H Share Registrar to arrange for delivery of the supporting documents and H
Share certificates in accordance with the contingency arrangements as agreed between them. You may refer to “—E.
Severe Weather Arrangements”.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, December 18, 2024 if, there is/are:
• a tropical cyclone warning signal number 8 or above;
• a black rainstorm warning; and/or
• Extreme Conditions, (collectively, “Severe Weather Signals”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, December 18,
2024.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on the
next business day which does not have Severe Weather Signals in force at any time between 9:00
a.m. and 12:00 noon.
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 “Expected Timetable”, an announcement will be made and published on the Stock
Exchange’s website at www.hkexnews.hk and our websites at www.dobot.cn (with respect to
Chinese version) and www.dobot-robots.com (with respect to English version) of the revised
timetable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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If a Severe Weather Signal is hoisted on Friday, December 20, 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 Monday, December 23,
2024.
If a Severe Weather Signal is hoisted on Friday, December 20, 2024, the despatch of physical H
Share certificates of less than 500,000 Offer Shares issued under your own name will be made by
ordinary post when the post office re-opens after the Severe Weather Signal is lowered or cancelled
(e.g. in the afternoon of Friday, December 20, 2024 or on Monday, December 23, 2024).
If a Severe Weather Signal is hoisted on Monday, December 23, 2024, physical H Share
certificates of 500,000 Offer Shares or more issued under your own name are available for collection
in person at the H Share Registrar’s office after the Severe Weather Signal is lowered or cancelled
(e.g. in the afternoon of Monday, December 23, 2024 or on Tuesday, December 24, 2024).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F . ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the date of commencement of dealings in the H Shares or any other date HKSCC chooses.
Settlement of transactions between Exchange Participants is required to take place in CCASS on the
second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.
You should seek the advice of your broker or other professional advisor for details of the settlement
arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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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 banks and the Relevant Persons about you in
the same way as it applies to personal data about applicants other than HKSCC Nominees. This personal
data may include client identifier(s) and your identification information. By giving 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
Your personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
• processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of allocation of
Hong Kong Offer Shares;
• compliance with applicable laws and regulations in Hong Kong and elsewhere;
• registering new issues or transfers into or out of the names of the holders of the H Shares
including, where applicable, HKSCC Nominees;
• maintaining or updating the register of members of the Company;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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• verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
• facilitating Hong Kong Offer Shares balloting;
• establishing benefit entitlements of holders of the H Shares, such as dividends, rights
issues, bonus issues, etc.;
• distributing communications from the Company and its subsidiaries;
• compiling statistical information and profiles of the holder of the H Shares;
• disclosing relevant information to facilitate claims on entitlements; and
• any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which applicants
and holders of the H Shares may from time to time agree.
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 banks and overseas
principal share registrar;
• HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or procedures
and operating FINI and CCASS (including where applicants for the Hong Kong Offer
Shares request a deposit into CCASS);
• any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which the
personal data were collected. Personal data which is no longer required will be destroyed or dealt
with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether the
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to
correct any data that is inaccurate. The Company and the H Share Registrar have the right to charge
a reasonable fee for the processing of such requests. All requests for access to data or correction of
data should be addressed to the Company and the H Share Registrar, at their registered address
disclosed in “Corporate information” or as notified from time to time, for the attention of the
company secretary, or the H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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The following is the text of a report, prepared for the purpose of incorporation in this document,
received from the independent reporting accountants, Ernst & Young, Certified Public Accountants, Hong
Kong.
۱
ਸ਼छଳ
垹
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Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHENZHEN DOBOT CORP LTD, GUOTAI JUNAN CAPITAL LIMITED AND
ABCI CAPITAL LIMITED
INTRODUCTION
We report on the historical financial information of SHENZHEN DOBOT CORP LTD (the
“Company ”) and its subsidiaries (together, the “ Group ”) set out on pages I-3 to I-81, which comprises
the consolidated statements of profit or loss and other comprehensive income, statements of changes in
equity and statements of cash flows of the Group for each of the years ended 31 December 2021, 2022,
2023 and the six months ended 30 June 2024 (the “ Relevant Periods ”), and the consolidated statements
of financial position of the Group and the statements of financial position of the Company as at 31
December 2021, 2022, 2023 and 30 June 2024 and material accounting policy information and other
explanatory information (together, the “ Historical Financial Information ”). The Historical Financial
Information set out on pages I-3 to I-81 forms an integral part of this report, which has been prepared for
inclusion in the prospectus of the Company dated 13 December 2024 (the “ Prospectus ”) in connection
with the initial listing of the shares of the Company on the Main Board of The Stock Exchange of Hong
Kong Limited (the “ Stock Exchange ”).
DIRECTORS’ RESPONSIBILITY FOR THE HISTORICAL FINANCIAL INFORMATION
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in note 2.1
to the Historical Financial Information, and for such internal control as the directors determine is
necessary to enable the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
REPORTING ACCOUNTANTS’ RESPONSIBILITY
Our responsibility is to express an opinion on the Historical Financial Information and to report our
opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular
Reporting Engagements 200 Accountants’ Reports on Historical Financial Information in Investment
Circulars issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”). This standard
requires that we comply with ethical standards and plan and perform our work to obtain reasonable
assurance about whether the Historical Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and disclosures in
the Historical Financial Information. The procedures selected depend on the reporting accountants’
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 accountants
consider internal control relevant to the entity’s preparation of the Historical Financial Information that
gives a true and fair view in accordance with the basis of preparation set out in note 2.1 to the Historical
Financial Information, in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 400 ---
OPINION
In our opinion, the Historical Financial Information gives, for the purposes of the accountants’
report, a true and fair view of the financial position of the Group and the Company as at 31 December
2021, 2022, 2023 and 30 June 2024 and of the financial performance and cash flows of the Group for each
of the Relevant Periods in accordance with the basis of preparation set out in note 2.1 to the Historical
Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which comprises the
consolidated statement of profit or loss and other comprehensive income, statement of changes in equity
and statement of cash flows for the six months ended 30 June 2023 and other explanatory information (the
“Interim Comparative Financial Information ”). The directors of the Company are responsible for the
preparation of the Interim Comparative Financial Information in accordance with the basis of preparation
set out in notes 2.1 to the Historical Financial Information. Our responsibility is to express a conclusion
on the Interim Comparative Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued by the HKICPA. 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 Hong Kong 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 Interim Comparative Financial Information, for the purposes of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of preparation
set out in notes 2.1 to the Historical Financial Information.
REPORT ON MATTERS UNDER THE RULES GOVERNING THE LISTING OF SECURITIES
ON THE STOCK EXCHANGE AND THE COMPANIES (WINDING UP AND MISCELLANEOUS
PROVISIONS) ORDINANCE
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying Financial
Statements as defined on page I-3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which states that no dividends have been
paid by the Company in respect of the Relevant Periods.
Certified Public Accountants
Hong Kong
13 December 2024
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 401 ---
I HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical Financial
Information is based, were audited by Ernst & Young in accordance with Hong Kong Standards on
Auditing issued by the HKICPA (the “ Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB”) and all values are rounded
to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 402 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Y ear ended 31 December Six months ended 30 June
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
REVENUE .................... 5 174,314 241,013 286,749 109,912 120,462
Cost of sales ................... (86,234) (142,796) (161,905) (66,978) (67,618)
Gross profit .................... 88,080 98,217 124,844 42,934 52,844
Other income and gains ......... 5 27,267 45,464 43,831 23,120 21,075
Selling and distribution expenses . (63,630) (89,274) (127,389) (56,560) (62,519)
Administrative expenses ......... (26,438) (49,532) (53,065) (23,912) (37,087)
Research and development
expenses .................... (46,873) (52,054) (70,527) (31,181) (31,423)
Other expenses ................. (3,001) (3,408) (5,537) (4,552) (1,772)
Finance costs .................. 6 (767) (2,030) (1,957) (1,411) (702)
Share of profit of an associate .... 7 1 5 — — —
LOSS BEFORE TAX ............ 7 (25,291) (52,612) (89,800) (51,562) (59,584)
Income tax (expense)/credit ...... 10 (16,465) 135 (13,481) (125) (299)
LOSS FOR THE YEAR/PERIOD . (41,756) (52,477) (103,281) (51,687) (59,883)
Attributable to:
Owners of the parent ............ (41,558) (52,477) (103,281) (51,687) (59,883)
Non-controlling interests ........ (198) — — — —
(41,756) (52,477) (103,281) (51,687) (59,883)
LOSS PER SHARE
ATTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE PARENT
Basic and diluted (RMB) ........ (0.13) (0.15) (0.29) (0.14) (0.17)
LOSS FOR THE YEAR/PERIOD . (41,756) (52,477) (103,281) (51,687) (59,883)
OTHER COMPREHENSIVE
INCOME
Other comprehensive income that
may be reclassified to profit or
loss in subsequent periods:
Exchange differences on
translation of foreign
operations ................. — — 8 6 2 6 6 (153)
TOTAL COMPREHENSIVE LOSS
FOR THE YEAR/PERIOD ..... (41,756) (52,477) (103,195) (51,421) (60,036)
Attributable to:
Owners of the parent ............ (41,558) (52,477) (103,195) (51,421) (60,036)
Non-controlling interests ........ (198) — — — —
(41,756) (52,477) (103,195) (51,421) (60,036)
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 403 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December As at 30 June
2024Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ........ 13 107,396 194,448 189,770 185,422
Right-of-use assets ................. 15 25,314 36,094 33,831 33,838
Other intangible assets .............. 14 2,002 3,156 2,255 2,984
Deferred tax assets ................. 18 5 106 1,902 2,427
Investment in an associate ........... 16 1,132 — — —
Prepayments, deposits and other
receivables ...................... 20 1,441 829 5,278 7,470
Trade receivables ................... 19 1,392 828 — —
Total non-current assets ............. 138,682 235,461 233,036 232,141
CURRENT ASSETS
Inventories ........................ 17 70,901 131,843 141,520 155,296
Trade and bills receivables ........... 19 15,046 39,608 41,608 33,040
Contract assets ..................... 22 228 82 325 416
Prepayments, deposits and
other receivables ................. 20 17,594 21,074 30,844 28,413
Financial assets at fair value through
profit or loss ..................... 21 272,720 190,400 174,383 145,983
Restricted bank deposits ............. 23 821 9,189 2,210 821
Cash and cash equivalents ........... 23 149,093 297,763 110,962 73,033
Total current assets ................. 526,403 689,959 501,852 437,002
CURRENT LIABILITIES
Trade and bills payables ............. 24 18,275 30,894 30,907 29,707
Other payables and accruals ......... 25 94,176 183,368 41,792 39,291
Financial liabilities at fair value
through profit or loss ............. 21 ——8 0—
Interest-bearing bank loans .......... 26 — 21,619 57,790 69,233
Lease liabilities .................... 15 3,108 5,016 4,874 4,415
Contract liabilities .................. 27 27,076 35,578 10,939 10,561
Tax payable ........................ 38,761 38,146 14,415 530
Total current liabilities .............. 181,396 314,621 160,797 153,737
NET CURRENT ASSETS ........... 345,007 375,338 341,055 283,265
TOTAL ASSETS LESS CURRENT
LIABILITIES .................... 483,689 610,799 574,091 515,406
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 404 ---
As at 31 December As at 30 June
2024Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Deferred income ................... 28 158,993 143,466 189,569 177,814
Deferred tax liabilities .............. 18 272 10 559 845
Lease liabilities .................... 15 5,283 5,731 4,533 4,832
Provision .......................... 29 3,490 6,558 6,127 4,983
Total non-current liabilities .......... 168,038 155,765 200,788 188,474
Net assets ......................... 315,651 455,034 373,303 326,932
EQUITY
Equity attributable to owners of
the parent
Share capital ....................... 30 — 360,000 360,000 360,000
Paid-in capital ..................... 30 9,538 — — —
Reserves .......................... 31 306,113 95,034 13,303 (33,068)
315,651 455,034 373,303 326,932
Non-controlling interests ............. ————
Total equity ........................ 315,651 455,034 373,303 326,932
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 405 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2021
Attributable to owners of the parent
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses Total
Non-
controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 31) (note 32)
As at 1 January 2021 ....... 7,850 190,521 43,299 (184,745) 56,925 (898) 56,027
Loss for the year ........... — — — (41,558) (41,558) (198) (41,756)
Total comprehensive loss
for the year .............. — — — (41,558) (41,558) (198) (41,756)
Share-based payments
(note 32) ................ — — (1,285) — (1,285) — (1,285)
Purchase of interests of
non-controlling
shareholders ............. — (1,153) — — (1,153) 1,153 —
Disposal of a subsidiary
(note 33) ................ — — — — — (57) (57)
Capital contribution by
shareholders ............. 1,688 301,034 — — 302,722 — 302,722
As at 31 December 2021 .... 9,538 490,402* 42,014* (226,303)* 315,651 — 315,651
Y ear ended 31 December 2022
Share
capital
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 32)
As at 1 January 2022 ........... — 9,538 490,402 42,014 (226,303) 315,651
Loss for the year ............... — — — — (52,477) (52,477)
Total comprehensive loss
for the year .................. — — — — (52,477) (52,477)
Share-based payments (note 32) . . — — — 12,579 — 12,579
Capital contribution by
shareholders .................. — 5 1 6 178,765 — — 179,281
Conversion into a joint stock
company .................... 360,000 (10,054) (565,867) — 215,921 —
As at 31 December 2022 ........ 360,000 — 103,300* 54,593* (62,859)* 455,034
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 406 ---
Y ear ended 31 December 2023
Share
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 31) (note 32)
As at 1 January 2023 ................. 3 60,000 103,300 54,593 (62,859) — 455,034
Loss for the year ..................... — — — (103,281) — (103,281)
Exchange differences on translation of
foreign operations .................. — — — — 8 6 8 6
Total comprehensive loss
for the year ....................... — — — (103,281) 86 (103,195)
Share-based payments (note 32) ......... — — 2 1,464 — — 21,464
As at 31 December 2023 .............. 3 60,000 103,300 76,057 (166,140) 86 373,303
Six months ended 30 June 2024
Share
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 31) (note 32)
As at 1 January 2024 ................. 3 60,000 103,300 76,057 (166,140) 86 373,303
Loss for the period .................... — — — (59,883) — (59,883)
Exchange differences on translation of
foreign operations ................... — — — — (153) (153)
Total comprehensive loss
for the period ...................... — — — (59,883) (153) (60,036)
Share-based payments (note 32) .......... — — 1 3,665 — — 13,665
As at 30 June 2024 ................... 3 60,000 103,300* 89,722* (226,023)* (67)* 326,932
* The reserve accounts comprise the consolidated reserves of RMB306,113,000, RMB95,034,000, RMB13,303,000 and
RMB(33,068,000) in the consolidated statements of financial position as at 31 December 2021, 2022, 2023 and 30 June 2024,
respectively.
Six months ended 30 June 2023 (Unaudited)
Share
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 ................. 3 60,000 103,300 54,593 (62,859) — 455,034
Loss for the period .................... — — — (51,687) — (51,687)
Exchange differences on translation of
foreign operations ................... — — — — 2 6 6 2 6 6
Total comprehensive loss
for the period ...................... — — — (51,687) 266 (51,421)
Share-based payments (note 32) .......... — — 5,845 — — 5,845
As at 30 June 2023 ................... 3 60,000 103,300 60,438 (114,546) 266 409,458
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 407 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December Six months ended 30 June
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss before tax .................. (25,291) (52,612) (89,800) (51,562) (59,584)
Adjustments for:
Finance costs .................... 6 767 2,030 1,957 1,411 702
Interest income .................. 5 (1,948) (2,843) (2,313) (1,569) (1,274)
Loss/(gain) on disposal of items of
property, plant and equipment ..... 7 5 (2) 404 — 4
Loss on disposal of
intangible assets ............... 7 — 281 195 195 —
Depreciation of property, plant and
equipment .................... 7 3,518 16,163 25,556 11,498 13,419
Amortisation of intangible assets .... 7 119 627 758 367 484
Impairment/(reversal of impairment)
of trade receivables .............. 7 (3,411) 979 3,909 2,943 (1,095)
Impairment/(reversal of impairment)
of contract assets ............... 7 7 (8) 35 21 67
Impairment/(reversal of impairment)
of other receivables ............. 7 226 (342) 58 51 (39)
Impairment losses on investment in an
associate ..................... 7 — 1,138 — — —
Loss on disposal of a subsidiary ..... 7 1 6 3 —— ——
Write-down of inventories to net
realisable value ................. 7 5,423 8,626 17,071 10,244 6,533
Depreciation of right-of-use assets . . . 15 4,717 6,003 7,016 2,766 2,893
Investment income from financial
assets at fair value through profit or
loss .......................... 5 (7,045) (7,391) (2,657) (2,059) (647)
Fair value gains on financial assets at
fair value through profit or loss .... 5 (1,695) (400) (4,132) (2,259) (1,600)
Fair value losses on financial
liabilities at
fair value through profit or loss .... — — 7 7 1 — —
Share of profit of an associate ....... ( 7 1 ) ( 5 ) — — —
Equity-settled share-based payments . 7 (1,285) 12,579 21,464 5,845 13,665
(25,801) (15,177) (19,708) (22,108) (26,472)
Increase in inventories ............ (32,972) (83,196) (29,320) (37,123) (23,141)
(Increase)/decrease in
restricted bank deposits .......... (610) (8,368) 6,979 9,189 1,389
(Increase)/decrease in trade and
bills receivables ................ (3,696) (24,977) (5,081) 9,001 9,663
Decrease/(increase) in contract assets . 72 154 (278) — (158)
Decrease/(increase) in prepayments,
deposits and other receivables ..... 1 , 5 9 1 (3,408) (10,552) (3,535) 278
(Decrease)/increase in trade and bills
payables ......................
(5,519) 12,619 13 1,573 (2,344)
Increase/(decrease) in other payables
and accruals ................... 5 2 8 13,714 (19,513) (15,209) (3,910)
Increase/(decrease) in contract
liabilities ..................... 6 , 0 2 4 8,502 (24,639) (12,506) (378)
Increase/(decrease) in deferred income 66,750 (15,527) (17,146) (7,554) (11,755)
Cash generated from/(used in)
operations .................... 6 , 3 6 7 ( 1 1 5,664) (119,245) (78,272) (56,828)
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 408 ---
Y ear ended 31 December Six months ended 30 June
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Income tax paid .................. — (847) (38,455) (36,817) (13,586)
Net cash flows from/(used in)
operating activities ............. 6,367 (116,511) (157,700) (115,089) (70,414)
CASH FLOWS FROM
INVESTING ACTIVITIES
Interest received ................. 1,948 2,843 2,313 1,569 1,274
Purchases of items of property,
plant and equipment ............ (42,478) (21,525) (11,306) (6,250) (7,640)
Purchase of intangible assets ....... ( 2 ,121) (2,062) (52) — (1,213)
Proceeds from disposal of property,
plant and equipment ............ 3 8 8 1 1 3 4 2 4 6 6 9 1,634
Purchase of financial assets at
fair value through profit or loss .... ( 1 ,055,025) (645,000) (370,251) (282,519) (1,600)
Disposal of a subsidiary ............ 33 (251) — — — —
Asset acquisition ................. 34 — — (71,540) (71,540) —
Proceeds from disposal of
financial assets at fair value
through profit or loss ............ 825,660 735,111 392,548 306,037 32,401
Net cash flows (used in)/
from investing activities ......... (271,879) 69,480 (57,864) (52,034) 24,856
CASH FLOWS FROM FINANCING
ACTIVITIES
New bank loans .................. — 21,619 57,790 8,113 69,233
Loans from related parties .......... 4,364 — — — —
Interest paid .................... (369) (1,699) (1,498) (1,161) (541)
Capital contribution by shareholders . . 309,137 183,527 — — —
Share issue expenses .............. ( 6 ,415) (4,266) — — —
Payments of lease liabilities ........ ( 4 ,296) (5,208) (6,536) (3,660) (3,086)
Repayment of loans to related parties . (4,364) — — — —
Repayment of bank loans .......... (23,045) — (21,619) — (57,790)
Net cash flows from financing
activities ..................... 275,012 193,973 28,137 3,292 7,816
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIV ALENTS 9,500 146,942 (187,427) (163,831) (37,742)
Cash and cash equivalents at
beginning of year/period ......... 139,879 149,093 297,763 297,763 110,962
Effect of foreign exchange rate
changes, net ................... (286) 1,728 626 1,385 (187)
CASH AND CASH EQUIV ALENTS
AT END OF YEAR/PERIOD ...... 149,093 297,763 110,962 135,317 73,033
ANALYSIS OF BALANCES OF
CASH AND CASH EQUIV ALENTS
Cash and bank balances ........... 129,093 297,763 92,547 135,317 63,768
Non-pledged time deposits with
original maturity of less than
three months when acquired ...... 20,000 — 18,415 — 9,265
Cash and cash equivalents as stated
in the consolidated statements of
financial position ............... 149,093 297,763 110,962 135,317 73,033
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 409 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December As at 30 June
2024Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment . . . 13 17,310 31,077 28,130 21,505
Right-of-use assets ............. 15 7,615 7,957 5,421 6,095
Other intangible assets ......... 14 1,721 1,447 1,066 1,900
Investments in subsidiaries ...... 29,032 28,796 57,247 57,531
Prepayment, deposits and other
receivables .................. 20 1,207 508 958 2,794
Trade receivables .............. 19 1,392 828 — —
Total non-current assets ......... 58,277 70,613 92,822 89,825
CURRENT ASSETS
Inventories .................... 17 68,790 44,291 36,763 42,479
Trade and bills receivables ....... 19 21,758 164,290 139,709 114,898
Contract assets ................ 22 209 82 325 416
Prepayments, deposits and
other receivables ............. 20 22,392 7,998 97,256 149,621
Financial assets at fair value
through profit or loss ......... 21 222,720 190,400 174,383 145,983
Restricted bank deposits ........ 23 — 3,592 1,389 —
Cash and cash equivalents ....... 23 63,106 159,513 52,073 19,624
Total current assets ............. 398,975 570,166 501,898 473,021
CURRENT LIABILITIES
Trade and bills payables ........ 24 20,283 62,224 95,610 101,958
Other payables and accruals ..... 25 25,731 39,955 33,735 32,488
Financial liabilities at fair value
through profit or loss ......... 21 ——8 0—
Lease liabilities ................ 15 2,548 4,025 2,952 2,531
Contract liabilities ............. 27 23,732 32,292 10,672 9,267
Total current liabilities ......... 72,294 138,496 143,049 146,244
NET CURRENT ASSETS ....... 326,681 431,670 358,849 326,777
TOTAL ASSETS LESS
CURRENT LIABILITIES ..... 384,958 502,283 451,671 416,602
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 410 ---
As at 31 December As at 30 June
2024Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Deferred income ............... 28 4,766 4,463 9,442 7,004
Deferred tax liabilities .......... 18 265 10 559 845
Lease liabilities ................ 15 4,999 4,266 2,794 3,666
Provision ...................... 29 3,490 6,558 6,127 4,983
Total non-current liabilities ..... 13,520 15,297 18,922 16,498
Net assets ..................... 371,438 486,986 432,749 400,104
EQUITY
Share capital .................. 30 — 360,000 360,000 360,000
Paid-in capital ................. 30 9,538 — — —
Reserves ...................... 31 361,900 126,986 72,749 40,104
Total equity ................... 371,438 486,986 432,749 400,104
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 411 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
The Company is a joint stock company with limited liability incorporated in Shenzhen, the People’s Republic of China (the
“PRC”) on 30 July 2015. The registered office address of the Company is 1003, Building 2, Chongwen Park, Nanshan Zhiyuan,
No. 3370 Liuxian Avenue, Taoyuan Street, Nanshan District, Shenzhen, the PRC.
During the Relevant Periods and in the period covered by the Interim Comparative Financial Information, the Group was
principally engaged in the design, development, manufacture and commercialisation of collaborative robots.
As at the date of this report, the Company had direct and indirect interests in its subsidiaries, all of which are private limited
liability companies (or, if incorporated outside Hong Kong, have substantially similar characteristics to a private company
incorporated in Hong Kong), the particulars of which are set out below:
Name
Place and date of
registration and
place of operations
Registered
share capital
Percentage of
equity
attributable
to the Company Principal activities
Direct Indirect
Qingdao Yuejiang Intelligence Technology Co.,
Ltdʮ̡ * (note (a)) ..
Chinese Mainland
27 February 2020
RMB20,000,000 100% – Manufacture of
collaborative robots
Yuejiang Intelligent Robot (Suzhou)
Co., Ltd. ൳ᖛ౽ঐዚኜɛᘽψ
ʮ̡ * (note (a)) ...............
Chinese Mainland 22
July 2021
RMB6,000,000 100% – Sale of collaborative
robots
Shenzhen Qimo Technology Co., Ltd.
ʮ̡ * (notes (a), (d)) ..
Chinese Mainland 26
July 2018
RMB5,000,000 100% – Manufacture of
collaborative robots
Rizhao Yuejiang Intelligence Technology Co.,
Ltd.ʮ̡ *
(note (a)) ......................
Chinese Mainland 21
October 2020
RMB5,000,000 100% – Manufacture of
collaborative robots
DOBOT HK LIMITED (note (b)) ......... H o n g K o n g
16 August 2021
HKD10,000 100% – Investment holding
Qingdao Yuejiang Robotics Co., Ltd.
ʮ̡ * (notes (a), (c)) ..
Chinese Mainland 26
April 2020
RMB71,965,300 – 100% Holding the land for
production base
DOBOT NORTH AMERICA LLC
(note (a)) ......................
The United States
25 October 2022
US$1,000,000 – 100% Investment holding
DOBOT Europe GmbH (note (a)) ......... G e r m a n y
4 May 2023
Euro500,000 – 100% Sale of collaborative
robots
DOBOT JAPAN (note (a)) .............. Japan
17 February 2023
JPY20,000,000 – 100% Sale of collaborative
robots
DOBOT USA LLC (note (a)) ............ U nited States
26 October 2022
US$1,000,000 – 100% Sale of collaborative
robots
* The English names of these companies registered in the PRC represent the best effort made by the directors of the
Company (the “ Directors ”) to translate the Chinese names as these companies have not been registered with any
official English names.
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Notes:
(a) As at the date of this report, no audited financial statements have been prepared for these entities for the years ended
31 December 2021, 2022 and 2023 as these entities were not subject to any statutory audit requirements under the
relevant rules and regulations in the jurisdictions of incorporation or newly incorporated.
(b) The statutory financial statements of this entity for the period from 16 August 2021 (date of Incorporation) to 31
December 2022 prepared in accordance with the Hong Kong Small and Medium-sized Entity Financial Reporting
Standards (“ SME-FRS ”) issued by the HKICPA, were audited by Richful CPA Limited, certified public accountants
registered in Hong Kong. The statutory financial statements of this entity for the year ended 31 December 2023
prepared in accordance with SME-FRS, were audited by LEE CHI FAI&Co., certified public accountants registered in
Hong Kong.
(c) The registered capital of Qingdao Yuejiang Robotics Co., Ltd. was increased from RMB10,000,000 to RMB71,965,300
on 28 November 2022. The equity interests in Qingdao Yuejiang Robotics Co., Ltd. were acquired by the Group in June
2023 with details set out in note 34 to the Historical Financial Information.
(d) The Group held 90% equity interests in Shenzhen Qimo Technology Co., Ltd. upon the incorporation of this entity. On
31 March 2021, the Group acquired 10% non-controlling interests in Shenzhen Qimo Technology Co., Ltd. at RMB1.
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with International Financial Reporting Standards
(“IFRSs ”), which comprise all standards and Interpretations approved by the International Accounting Standards Board (“ IASB ”).
All IFRSs effective for the accounting period commencing from 1 January 2024, together with the relevant transitional provisions,
have been adopted by the Group in the preparation of the Historical Financial Information throughout the Relevant Periods and in
the period covered by the Interim Comparative Financial Information.
The Historical Financial Information has been prepared under the historical cost convention except for certain financial
instruments which have been measured at fair value at the end of each of the Relevant Periods and in the period covered by the
Interim Comparative Financial Information.
Basis of consolidation
The Historical Financial Information includes the financial information of the Group for the Relevant Periods and in the
period covered by the Interim Comparative Financial Information. A subsidiary is an entity (including a structured entity), directly
or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that
give the Group the current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the Company has less than a
majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether
it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial information of the subsidiaries is prepared for the same reporting period as the Company, using consistent
accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of the Group and
to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction.
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If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, any
non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment retained and any
resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised in other comprehensive income
is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly
disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRSs
The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective, in the
Historical Financial Information.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or
Joint V enture
1
Amendments to IAS 21 Lack of Exchangeability 2
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification
and Measurement of Financial Instruments 3
Amendments to IFRS 1, IFRS 7,
IFRS 9, IFRS 10 and IAS 7
Nine narrow scope amendments including clarifications, simplifications,
corrections or changes to improve consistency in IFRS 1, IFRS 7,
IFRS 9, IFRS 10 and IAS 7
3
IFRS 18 Presentation and Disclosure in Financial Statements 4
IFRS 19 Subsidiaries without Public Accountability: Disclosures 4
1 No mandatory effective date yet determined but available for adoption.
2 Effective for annual periods beginning on or after 1 January 2025.
3 Effective for reporting periods beginning on or after 1 January 2026.
4 Effective for reporting periods beginning on or after 1 January 2027.
The Group is in the process of making an assessment of the impact of these new and revised IFRSs upon initial application.
So far, the Group considers that these new and revised IFRSs may result in changes in accounting policies and are unlikely to have
a significant impact on the Group’s results of operations and financial position.
2.3 MATERIAL ACCOUNTING POLICIES
Investment in an associate
An associate is an entity in which the Group has a long term interest of generally not less than 20% of the equity voting rights
and over which it has significant influence. Significant influence is the power to participate in the financial and operating policy
decisions of the investee, but is not control or joint control over those policies.
The Group’s investment in an associate is stated in the consolidated statement of financial position at the Group’s share of net
assets under the equity method of accounting, less any impairment losses. Adjustments are made to bring into line any dissimilar
accounting policies that may exist. The Group’s share of the post-acquisition results and other comprehensive income of an
associate is included in the consolidated statement of profit or loss and consolidated other comprehensive income, respectively. In
addition, when there has been a change recognised directly in the equity of an associate, the Group recognises its share of any
changes, when applicable, in the consolidated statement of changes in equity. Unrealised gains and losses resulting from
transactions between the Group and the associate are eliminated to the extent of the Group’s investment in the associate, except
where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of
associates is included as part of the Group’s investment in an associate.
Fair value measurement
The Group measures its certain financial instruments at fair value at the end of each of the Relevant Periods. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most
advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The
fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its
highest and best use.
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The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the Historical Financial Information on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each of the Relevant Periods.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories
and deferred tax assets), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or
cash-generating unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to profit or loss in the
period in which it arises in those expense categories consistent with the function of the impaired asset.
An assessment is made at the end of each of the Relevant Periods as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the
estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would
have been determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A
reversal of such an impairment loss is credited to profit or loss in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
other entity);
(iii) the entity and the Group are joint ventures of the same third party;
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(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related
to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the
Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any
impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable
costs of bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and
maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where the
recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a
replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises
such parts as individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its
residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:
Leasehold improvements Shorter of remaining lease terms and
estimated useful lives
Buildings 3.17% to 4.75%
Furniture and fixtures 19% to 32%
Electronic equipment and others 9.5% to 32%
Motor vehicles 19% to 32%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a
reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method
are reviewed, and adjusted if appropriate, at least at the end of each of the Relevant Periods.
An item of property, plant and equipment including any significant part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in the
statement of profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying
amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is reclassified to the
appropriate category of property, plant and equipment when completed and ready for use.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is the fair value at the date of acquisition. The useful lives of intangible assets are assessed to be either finite
or indefinite. Intangible assets with finite lives are subsequently amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the end of each of the Relevant Periods.
Intangible assets are amortised on the straight-line basis over the following useful economic lives:
Software 3 to 5 years
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Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate
the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its
ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. Product development expenditure which does
not meet these criteria is expensed when incurred.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (i.e., the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Where applicable,
the cost of a right-of-use asset also includes an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located. Right-of-use assets are depreciated on a straight-line basis over the shorter of the
lease terms and the estimated useful lives of the assets as follows:
Factory, office and laboratory 1 to 5 years
Leasehold land 30 to 50 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments to be made over
the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group
and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease.
The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event
or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to
future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying
asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of office and employee dormitory (that
is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the recognition exemption for leases of low-value assets to leases of office equipment that is considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the
lease term.
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Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a
significant financing component or for which the Group has applied the practical expedient of not adjusting the effect of a
significant financing component, the Group initially measures a financial asset at its fair value plus in the case of a financial asset
not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or
for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 in
accordance with the policies set out for “Revenue recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive
income, it needs to give rise to cash flows that are solely payments of principal and interest (“ SPPI ”) on the principal amount
outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss,
irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the
objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair
value through other comprehensive income are held within a business model with the objective of both holding to collect
contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and
measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or
convention in the marketplace are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to
impairment. Gains and losses are recognised in the statement of profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net
changes in fair value recognised in the statement of profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a)
the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor
retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has
retained.
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Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ ECLs ”) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the
cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected
cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since
initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a
12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a
loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default
(a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since
initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as
at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers
reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking
information.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases,
the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is
unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified within the
following stages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as
detailed below.
Stage 1 Financial instruments for which credit risk has not increased significantly since initial recognition and for
which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 Financial instruments for which credit risk has increased significantly since initial recognition but that are
not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to
lifetime ECLs
Stage 3 Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated
credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables and contract assets that do not contain a significant financing component or when the Group applies the
practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in
calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, or payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
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The Group’s financial liabilities include trade payables, other payables and accruals, interest-bearing bank and other
borrowings, financial liabilities measured at amortised cost and financial liabilities measured at fair value through profit or loss.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, loans and borrowings)
After initial recognition, trade and other payables and interest-bearing borrowings are subsequently measured at amortised
cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at
cost. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the
effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the statement of
profit or loss and other comprehensive income.
Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in
hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit
or loss. The net fair value gain or loss recognised in the statement of profit or loss does not include any interest charged on these
financial liabilities.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the
statement of profit or loss and other comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise
the assets and settle the liabilities simultaneously.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and, in
the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate proportion of
overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and
disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-term highly
liquid deposits with a maturity of generally within three months that are readily convertible into known amounts of cash, subject to
an insignificant risk of changes in value and held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and at banks,
and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form an integral part of the
Group’s cash management.
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Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is
probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of
the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the end of each of the
Relevant Periods of the future expenditures expected to be required to settle the obligation. The increase in the discounted present
value amount arising from the passage of time is included in finance costs in profit or loss and other comprehensive income.
The Group provides for warranties in relation to the sale of products for general repairs of defects occurring during the
warranty period. Provisions for these assurance-type warranties granted by the Group are initially recognised based on sales volume
and past experience of the level of repairs and returns. The warranty-related cost is revised annually.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised
outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities,
based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of each of the Relevant Periods, taking
into consideration interpretations and practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of each of the Relevant Periods
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss and does not give rise to equal taxable and deductible temporary differences; and
• in respect of taxable temporary differences associated with investments in subsidiaries and an associate, when the
timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised,
except:
• when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary
differences; and
• in respect of deductible temporary differences associated with investments in subsidiaries and an associate, deferred
tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each of the Relevant Periods and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at the end of each of the Relevant Periods and are recognised to the extent that it has
become probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
each of the Relevant Periods.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax
APPENDIX I ACCOUNTANTS’ REPORT
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liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and
all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the costs, for which it is intended to compensate, are expensed.
Where the Group receives grants of non-monetary assets, the grants are recorded at the fair value of the non-monetary assets
and released to the statement of profit or loss over the expected useful lives of the relevant assets by equal annual instalments.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred to the customers at an
amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Group
will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at
contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
When the contract contains a financing component which provides the customer with a significant benefit of financing the
transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount
receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Group and the
customer at contract inception. When the contract contains a financing component which provides the Group with a significant
financial benefit for more than one year, revenue recognised under the contract includes the interest expense accreted on the
contract liability under the effective interest method. For a contract where the period between the payment by the customer and the
transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant
financing component, using the practical expedient in IFRS 15.
(a) Sale of products
Revenue from the sale of products is recognised at the point in time when control of the asset is transferred to the customers,
generally on delivery or acceptance of the products as agreed in the sales contracts.
For some contracts, the Group provides installation and commissioning services that are bundled together with the sale of
products to the customers. The installation and commissioning services significantly modify or customise the goods, therefore, the
products and the services are highly interrelated and instead combined as one single performance obligation which is satisfied at a
point in time.
(b) Product related supporting services
Revenue from services is recognised at a point in time when the service is provided and accepted by the customer.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the rate that exactly
discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate,
to the net carrying amount of the financial asset.
Contract assets
If the Group performs by transferring goods or services to a customer before being unconditionally entitled to the
consideration under the contract terms, a contract asset is recognised for the earned consideration that is conditional. Contract
assets are subject to impairment assessment, details of which are included in the accounting policies for impairment of financial
assets. They are reclassified to trade receivables when the right to the consideration becomes unconditional.
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Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from a customer
before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs
under the contract (i.e., transfers control of the related goods or services to the customer).
Contract costs
Other than the costs which are capitalised as inventories, property, plant and equipment and intangible assets, costs incurred
to fulfil a contract with a customer are capitalised as an asset if all of the following criteria are met:
(a) The costs relate directly to a contract or to an anticipated contract that the entity can specifically identify.
(b) The costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future.
(c) The costs are expected to be recovered.
The capitalised contract costs are amortised and charged to the statement of profit or loss on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the asset relates. Other contract costs are expensed as
incurred.
Share-based payments
The Group operates share award schemes for the purpose of providing incentives and rewards to eligible participants who
contribute to the success of the Group’s operations. Employees (including directors) of the Group receive remuneration in the form
of share-based payments, whereby employees render services as consideration for equity instruments (“ equity-settled
transactions ”).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are
granted. The fair value of share awards is determined by an external valuer using the probability weighted expected return method
and valuation models. Further details are included in note 32 to the Historical Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a corresponding increase in
equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for
equity-settled transactions at the end of each of the Relevant Periods until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit
to profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that
period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity
instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are
also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no
expense is recognised. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective
of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the
total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately.
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Other employee benefits
Pension scheme
The employees of the Group’s subsidiaries which operate in Chinese Mainland are required to participate in a central pension
scheme operated by the local municipal government. The subsidiaries are required to contribute a certain percentage of their payroll
costs to the central pension scheme. The contributions are charged to profit or loss as they become payable in accordance with the
rules of the central pension scheme.
Termination benefits
Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and
when the Group recognises restructuring costs involving the payment of termination benefits.
Borrowing costs
All borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of funds.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each entity in the
Group determines its own functional currency and items included in the financial statements of each entity are measured using that
functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective
functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency rates of exchange ruling at the end of each of the Relevant Periods. Differences
arising on settlement or translation of monetary items are recognised in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetary item
measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation
difference on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised
in other comprehensive income or profit or loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the derecognition of a
non-monetary asset or non-monetary liability relating to an advance consideration, the date of initial transaction is the date on
which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If
there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of the
advance consideration.
The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at the end of the reporting
period, the assets and liabilities of these entities are translated into RMB at the exchange rates prevailing at the end of the reporting
period and their statements of profit or loss are translated into RMB at the exchange rates that approximate to those prevailing at the
dates of the transactions.
The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange
fluctuation reserve, except to the extent that the differences are attributable to non-controlling interests. On disposal of a foreign
operation, the cumulative amount in the reserve relating to that particular foreign operation is recognised in the statement of profit
or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of
assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and translated at the closing
rate.
For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are translated into RMB
at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise
throughout the year are translated into RMB at the weighted average exchange rates of the year.
APPENDIX I ACCOUNTANTS’ REPORT
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3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying disclosures, and
the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from
those involving estimations, which have the most significant effect on the amounts recognised in the Historical Financial
Information:
Research and development expenses
All research costs are charged to the statement of profit or loss as incurred. Expenditure incurred on projects to develop new
products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible
asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will
generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the
expenditure during the development. Product development expenditure which does not meet these criteria is expensed when
incurred. Determining the amounts of development costs to be capitalised requires the use of judgements and estimation.
Classification of financial assets
The classification of financial assets at initial recognition depends on the Group’s business model for managing the financial
assets. In determining the business model, the Group considers how the performance of the business model and the financial assets
held within that business model are evaluated and reported to the Group’s key management personnel, the risks that affect the
performance of the business model (and the financial assets held within) and, in particular, the way those risks are managed. In
determining whether cash flows are going to be realised by collecting the financial assets’ contractual cash flows, it is necessary for
the Group to consider the reason, timing, frequency, and value of sales prior to the maturity date.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each of the Relevant
Periods, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below.
Provision against obsolete and slow-moving inventories
The Group reviews the condition of its inventories at the end of each reporting period and makes provisions against obsolete
and slow-moving inventory items which are identified as no longer suitable for sale or use based on sales forecasts. Such sales
forecasts are prepared based on agreements or orders on hand and estimated sales in the foreseeable future based on historical
experiences with its customers and current market conditions of the robots industry. Management estimates the net realisable value
for those obsolete and slow-moving inventories based primarily on the latest invoice prices and current market conditions. The
estimation is reassessed at the end of each reporting period. The provision against obsolete and slow-moving inventories requires
the use of judgements and estimates. Where the actual outcome or expectation in future is different from the original estimate, such
difference will impact on the carrying value of inventories and the write-down of inventories recognized in the periods in which
such estimates have been changed.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for
groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating,
and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix
to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e.,
gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the
manufacturing sector, the historical default rates are adjusted. At each reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
APPENDIX I ACCOUNTANTS’ REPORT
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The assessment of the correlation among historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic conditions. The Group’s
historical credit loss experience and forecast of economic conditions may also not be representative of a customer’s actual default
in the future. The information about the ECLs on the Group’s trade receivables is disclosed in note 19 to the Historical Financial
Information.
Recognition of income taxes and deferred tax assets
Determining income tax provision involves judgement on the future tax treatment of certain transactions and when certain
matters relating to the income taxes have not been confirmed by the local tax bureau. Management evaluates tax implications of
transactions and tax provisions are set up accordingly. The tax treatments of such transactions are reconsidered periodically to take
into account all changes in tax legislation.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning
strategies.
Leases—Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental borrowing rate
(“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term,
and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group “would have to pay,” which requires estimation when no observable rates
are available (such as for subsidiaries that do not enter into financing transactions) or when it needs to be adjusted to reflect the
terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates
the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary’s stand-alone credit rating).
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the right-of-use
assets) at the end of each of the Relevant Periods. Indefinite life intangible assets are tested for impairment annually and at other
times when such an indicator exists. Other non-financial assets are tested for impairment when there are indicators that the carrying
amounts may not be recoverable. An impairment exists when the carrying value of an asset or a cash-generating unit exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation of the fair value
less costs of disposal is based on available data from binding sales transactions in an arm’s length transaction of similar assets or
observable market prices less incremental costs for disposing of the asset. When value in use calculations are undertaken,
management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate
in order to calculate the present value of those cash flows.
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group is not organised into business units based on their services and products and only has
one reportable operating segment.
The information reported to the directors, who are the chief operating decision makers, for the purpose of resource allocation
and assessment of performance does not contain discrete operating segment financial information and the directors reviewed the
financial results of the Group as a whole. Therefore, no further information about the operating segment is presented.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 426 ---
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Chinese Mainland ......................... 90,457 100,893 117,221 39,181 46,543
European markets ......................... 40,598 65,964 68,313 31,885 28,312
Americas ................................ 16,419 30,708 37,558 17,113 16,291
Asia-Pacific markets ........................ 26,840 43,448 63,657 21,733 29,316
174,314 241,013 286,749 109,912 120,462
The revenue information above is based on the locations of the customers.
(b) Non-current assets
Most of the Group’s non-current assets are located in Chinese Mainland. Thus, no geographic information is presented.
Information about major customers
Revenue from a major customer which accounted for 10% or more of the Group’s revenue during the Relevant Periods and six
months ended 30 June 2023 is set out below:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Customer A .............................. 21,957 N/A* N/A* N/A* N/A*
* Less than 10% of the Group’s revenue.
5. REVENUE, OTHER INCOME AND GAINS
Revenue
An analysis of revenue is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts with customers .......... 174,314 241,013 286,749 109,912 120,462
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 427 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Types of goods or services
Sale of products .......................... 173,647 240,434 285,671 109,766 120,153
Services ................................ 6 6 7 5 7 9 1,078 146 309
174,314 241,013 286,749 109,912 120,462
Geographical markets
Chinese Mainland ......................... 90,457 100,893 117,221 39,181 46,543
European markets .......................... 40,598 65,964 68,313 31,885 28,312
Americas ................................ 16,419 30,708 37,558 17,113 16,291
Asia Pacific markets ........................ 26,840 43,448 63,657 21,733 29,316
174,314 241,013 286,749 109,912 120,462
Timing of revenue recognition
Goods transferred at a point in time ............. 173,647 240,434 285,671 109,766 120,153
Services transferred at a point in time ........... 6 6 7 5 7 9 1,078 146 309
Total revenue from contracts with customers ...... 174,314 241,013 286,749 109,912 120,462
The following table shows the amounts of revenue recognised in the Relevant Periods that were included in the contract
liabilities at the beginning of each of the Relevant Periods and recognised from performance obligations satisfied in previous
periods:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue recognised that was included in contract
liabilities at the beginning of the reporting period:
Sale of products .......................... 14,309 19,521 34,291 13,241 8,116
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sales of products
The performance obligation is satisfied upon delivery and acceptance of products and payment is generally due within 2
months from delivery, where payment in advance is normally required.
Product related supporting services
The performance obligation is satisfied at the point in time when services are completed and payment is generally due upon
completion of the services and customer acceptance.
As the original expected duration of the contracts from customers of the Group is within one year or less, the Group applies
the practical expedient of not disclosing the transaction price allocated to the remaining performance obligation.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 428 ---
Other income and gains
An analysis of other income and gains is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other income
Interest income ........................... 1,948 2,843 2,313 1,569 1,274
Government grants* ....................... 11,598 30,920 32,915 15,759 15,954
Investment income from financial assets at fair value
through profit or loss ..................... 7,045 7,391 2,657 2,059 647
Revenue from sales of raw materials ............ 1,545 1,655 238 43 377
Others .................................. 2 5 8 3 6 1 4 1 9 1 5 3 1 5 6
Gains
Reversal of impairment losses on financial and
contract assets .......................... 3,178 — — — 1,067
Fair value gains on financial assets at fair value
through profit or loss ...................... 1,695 400 4,132 2,259 1,600
Gain on disposal of items of property, plant and
equipment ............................. — 2———
Foreign exchange gains, net .................. — 1,892 1,157 1,278 —
27,267 45,464 43,831 23,120 21,075
* The Group has received certain government grants related to assets and income. Certain of the grants related to assets
and income have future related costs expected to be incurred and require the Group to comply with conditions attached
to the grants and the government to acknowledge the compliance of these conditions. The grants related to assets were
recognised in profit or loss over the useful lives of the relevant assets. The grants related to income have been received
to compensate for the Group’s research and development costs and are recognised in the statement of profit or loss on
a systematic basis over the periods that the costs, for which they are intended to compensate, are expensed.
Other government grants related to income that are receivable as compensation for expenses or losses already incurred
or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in
profit or loss in the period in which they become receivable.
6. FINANCE COSTS
An analysis of finance costs from continuing operations is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on bank loans ...................... 3 6 9 6 6 4 0 3 0 3 5 4 1
Interest on lease liabilities ................... 2 8 9 4 4 0 4 5 9 2 5 0 1 6 1
Interest on loans from related parties ............ 1 0 9 — — — —
Accretion of interest expense .................. — 1,584 858 858 —
767 2,030 1,957 1,411 702
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 429 ---
7. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Six months ended
30 June
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of inventories and services sold* . . . 86,234 142,796 161,905 66,978 67,618
Research and development costs***** . . . 46,873 52,054 70,527 31,181 31,423
Expense from sales of raw materials .... 1,886 1,132 266 90 668
Depreciation of property, plant and
equipment** ................... 1 3 3,518 16,163 25,556 11,498 13,419
Depreciation of right-of-use assets** .... 1 5 4,717 6,003 7,016 2,766 2,893
Amortisation of intangible assets** ..... 1 4 1 1 9 6 2 7 7 5 8 3 6 7 4 8 4
Loss/(gain) on disposal of property,
plant and equipment*** ........... 5 (12) 404 — 4
Loss on disposal of intangible assets*** . . — 281 195 195 —
Loss on disposal of a subsidiary ........ 3 3 1 6 3 — — — —
Foreign exchange losses/(gains), net*** . . 349 (1,892) (1,157) (1,278) 633
Lease payments in respect of
short-term leases ................ 1,334 596 1,092 400 514
Impairment/(reversal of impairment) of
trade receivables ................ (3,411) 979 3,909 2,943 (1,095)
Impairment/(reversal of impairment) of
other receivables ................ 2 2 6 (342) 58 51 (39)
Impairment/(reversal of impairment) of
contract assets .................. 7 ( 8 ) 3 5 2 1 6 7
Impairment losses on investment in an
associate ...................... — 1,138 — — —
Write-down of inventories to net realisable
value**** ..................... 5,423 8,626 17,071 10,244 6,533
Fair value loss on financial liabilities at
fair value through profit or loss ....... — — 7 7 1 — —
Share-based payment expenses ......... (1,285) 12,579 21,464 5,845 13,665
Product warranty provision ........... 3,943 4,864 2,798 1,188 382
Listing expenses ................... — — — — 11,242
Auditor’s remuneration ............. 2 1 4 2 1 1,571 300 150
Employee benefit expenses
(excluding directors’ and chief
executive’s remuneration (note 8) )
– Wages and salaries ............... 84,466 108,777 120,301 45,837 48,005
– Pension scheme contributions ........ 1,798 3,294 5,075 2,674 2,704
Total .......................... 86,264 112,071 125,376 48,511 50,709
* The amounts disclosed for cost of inventories sold included the write-down of inventories to net realisable value.
** The depreciation of property, plant and equipment, amortisation of intangible assets, and right-of-use assets are
included in “Cost of sales”, “Selling and distribution expenses. “Administrative expenses”, and “Research and
development expenses” in profit or loss.
*** The amounts are included in “other income and gains” and ”other expense” in profit or loss.
**** The amounts·are included·in “cost of sales” in profit or loss.
***** According to IAS 38.54, any expenditure on research or the research phase of an internal project must be expensed as
incurred. IAS 38.57 requires capitalization of expenditure incurred during the development phase of an internal
project, only when all of the criteria (as set out in the accounting policies for research and development costs in Note
2.3) can be met. The Group determines that capitalisation of development costs starts when the prototype of the
product is available and there are established demands for the product. There are only immaterial development costs
incurred after that point until the commercialisation of the product, therefore, no research and development costs were
capitalised during the Relevant Periods and six months ended 30 June 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 430 ---
8. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION
Directors’ and chief executive’s remuneration as recorded during the Relevant Periods and the six months ended 30 June
2023, disclosed pursuant to the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the “ Listing Rules ”),
section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information
about Benefits of Directors) Regulation, is set out below:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Fees ................................... — 6 2 1 6 1 0 8 1 0 8
Other emoluments:
Salaries, allowances and benefits in kind ......... 2,146 3,036 3,405 1,695 1,708
Pension scheme contributions ................. 2 4 4 3 5 9 2 9 3 2
Share-based payment expenses ................ (5,441) 2,232 3,539 547 2,979
(3,271) 5,317 7,219 2,379 4,827
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods and the six months ended 30 June 2023
were as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Mr. Li Yibin ............................. — 2 7 2 3 6 3 6
Mr. Zhou Runshu ......................... — 2 7 2 3 6 3 0
Dr. Hou Lingling .......................... — 2 7 2 3 6 3 6
Mr. Ng Jack Ho Wan ....................... — — — — 6
Total .................................. — 6 2 1 6 1 0 8 1 0 8
The independent non-executive directors of the Company were appointed on 20 December 2022 except for Mr. Ng Jack Ho
Wan who was appointed on 31 May 2024. Mr. Zhou Runshu resigned as independent non-executive director with effect from 31 May
2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 431 ---
(b) Directors and the chief executive
Y ear ended 31 December 2021
Fees
Salaries,
bonuses,
allowances
and benefits
in kind
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors, supervisors and chief
executive:
Mr. Liu Peichao (note (i)) .............. — 3 4 0 4 — 3 4 4
Mr. Lang Xulin (note (ii)) .............. — 4 6 0 4 — 4 6 4
Mr. Liu Yang (note (ii)) ............... — 2 8 6 3 6 2 3 5 1
Mr. Xie Junjie (note (iii)) .............. — 4 1 6 4 1,787 2,207
Mr. Li Liuwei (note (iii)) .............. — 281 3 41 325
Ms. Wan Ying (note (iii)) .............. — 186 3 31 220
Mr. Wu Zhiwen (note (ii)) .............. — 5 1 — 6
Mr. Liu Zhufu (note (iii)) ............... — 9 1 1 2 9 8 3 9 0
Mr. Song Tao (note (iii)) ............... — 8 1 1 (7,660) (7,578)
Non-executive directors:
Mr. Xiang Guanglong (note (ii)) ......... — — — — —
Ms. Cai Wenjuan (note (ii)) ............. — — — — —
Mr. Bai Yunfan (note (ii)) .............. — — — — —
Mr. Li Xing (note (ii)) ................ — — — — —
Ms. Zheng Chengyuan (note (ii)) ......... — — — — —
Mr. Yang Guowei (note (ii)) ............ — — — — —
Mr. Jing Liang (note (ii)) .............. — — — — —
— 2,146 24 (5,441) (3,271)
Y ear ended 31 December 2022
Fees
Salaries,
bonuses,
allowances
and benefits
in kind
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors, supervisors
and chief executive:
Mr. Liu Peichao (note (i)) ........ — 5 6 7 5 — 5 7 2
Mr. Wang Yong (note (ii)) ........ — 5 0 — — 5 0
Mr. Lang Xulin (note (ii)) ........ — 6 0 6 5 — 6 1 1
Mr. Liu Zhufu (note (ii)) ......... — 1 6 5 2 4 4 7 6 1 4
Mr. Jiang Yu (note (ii)) .......... — 141 15 194 350
Mr. Liu Yang (note (ii)) .......... — 3 5 7 4 1 3 4 4 9 5
Mr. Xie Junjie (note (iii)) ........ 4 4 9 3 1,340 1,792
Mr. Li Liuwei (note (iii)) ......... 4 0 8 5 7 4 4 8 7
Ms. Wan Ying (note (iii)) ......... — 2 9 3 4 4 3 3 4 0
Ms. Zhao Kun (note (iii)) ......... — — — — —
Non-executive directors:
Mr. Xiang Guanglong (note (ii)) .... — — — — —
Ms. Cai Wenjuan (note (ii)) ....... — — — — —
Mr. Li Xing (note (ii)) ........... — — — — —
Ms. Zheng Chengyuan (note (ii)) ... — — — — —
Mr. Yang Guowei (note (ii)) ....... — — — — —
Mr. Jing Liang (note (ii)) ......... — — — — —
— 3,036 43 2,232 5,311
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 432 ---
Y ear ended 31 December 2023
Fees
Salaries,
bonuses,
allowances
and benefits
in kind
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors, supervisors
and chief executive:
Mr. Liu Peichao (note (i)) ........ — 5 9 3 1 2 — 6 0 5
Mr. Wang Yong (note (ii)) ........ — 1,325 12 3,189 4,526
Mr. Lang Xulin (note (ii)) ......... — 7 3 9 1 2 — 7 5 1
Mr. Li Liuwei (note (iii)) ......... — 4 1 8 1 2 2 1 6 6 4 6
Ms. Wan Ying (note (iii)) ......... — 3 3 0 1 1 1 3 4 4 7 5
Ms. Ma Jingxian (note (iii)) ....... — — — — —
Ms. Zhao Kun (note (iii)) ........ — — — — —
Non-executive director:
Mr. Jing Liang (note (ii)) ......... — — — — —
— 3,405 59 3,539 7,003
Six months ended 30 June 2024
Fees
Salaries,
bonuses,
allowances
and benefits
in kind
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors, supervisors
and chief executive:
Mr. Liu Peichao (note (i)) ......... — 2 9 6 6 — 3 0 2
Mr. Wang Yong (note (ii)) ......... — 6 5 5 6 2,733 3,394
Mr. Lang Xulin (note (ii)) ......... — 3 7 4 7 — 3 8 1
Mr. Li Liuwei (note (iii)) ......... — 2 1 6 7 1 5 0 3 7 3
Ms. Wan Ying (note (iii)) ......... — 1 6 7 6 9 6 2 6 9
Ms. Ma Jingxian ............... — — — — —
Non-executive directors:
Mr. Jing Liang (note (ii)) ......... — — — — —
— 1,708 32 2,979 4,719
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 433 ---
Six months ended 30 June 2023 (Unaudited)
Fees
Salaries,
bonuses,
allowances
and benefits
in kind
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors, supervisors
and chief executive:
Mr. Liu Peichao (note (i)) ......... — 2 9 7 6 — 3 0 3
Mr. Wang Yong (note (ii)) ......... — 6 6 2 6 4 5 6 1,124
Mr. Lang Xulin (note (ii)) ......... — 3 6 6 6 — 3 7 2
Mr. Li Liuwei (note (iii)) ......... — 2 0 6 6 6 0 2 7 2
Ms. Wan Ying (note (iii)) ......... — 1 6 4 5 3 1 2 0 0
Ms. Ma Jingxian (note (iii)) ....... — — — — —
Ms. Zhao Kun (note (iii)) ......... — — — — —
Non-executive directors:
Mr. Jing Liang (note (ii)) ......... — — — — —
— 1,695 29 547 2,271
Notes:
(i) Mr. Liu Peichao was appointed as a director and the chief executive officer of the Company and the chairman of the
Board with effect from July 2015.
(ii) Mr. Lang Xulin was appointed as a director of the Company with effect from September 2016. Mr. Wu Zhiwen was
appointed as a director of the Company with effect from September 2016 to February 2021. Ms. Cai Wenjuan was
appointed as a director of the Company with effect from September 2016 to December 2022. Ms. Zheng Chenyuan was
appointed as a director of the Company with effect from July 2017 to October 2022. Mr. Xiang Guanglong and Mr. Li
Xing were appointed as directors of the Company with effect from July 2017 to December 2022. Mr. Bai Yunfan was
appointed as a director of the Company with effect from May 2018 to February 2021. Mr. Jing Liang was appointed as
a director of the Company with effect from April 2020. Mr. Liu Yang was appointed as a director of the Company with
effect from February 2021 to December 2022. Mr. Yang Guowei was appointed as a director of the Company with
effect from February 2021 to October 2022. Mr. Liu Zhufu and Mr. Jiang Yu were appointed as directors of the
Company with effect from October 2022 to December 2022. Mr. Wang Yong was appointed as a director with effect
from December 2022.
(iii) Mr. Xie Junjie was appointed as a supervisor of the Company with effect from September 2016 to October 2022. Mr.
Song Tao was appointed as a supervisor of the Company with effect from April 2020 to February 2021. Mr. Liu Zhufu
was appointed as a supervisor of the Company with effect from January 2021 to February 2021. Mr. Li Liuwei and Ms.
Wan Ying were appointed as a supervisor of the Company with effect from January 2021. Ms. Zhao Kun was appointed
as a supervisor of the Company with effect from October 2022 to May 2023. Ms. Ma Jingxian was appointed as a
supervisor of the Company with effect from May 2023.
During the Relevant Periods and six months ended 30 June 2023, restricted share units were granted to certain directors
through share incentive platforms, further details of which are included in the disclosures in note 32 to the Historical Financial
Information. The fair value of such awarded shares, which has been recognised in profit or loss, was determined as at the date of
grant and the amount included in the Historical Financial Information for the Relevant Periods is included in the above directors’
remuneration disclosures.
There was no arrangement under which a director or the chief executive waived or agreed to waive any remuneration during
the Relevant Periods and six months ended 30 June 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 434 ---
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the Relevant Periods and six months ended 30 June 2023 included one, one, one and
one directors, respectively, details of whose remuneration are set out in note 8 above. Details of the remuneration for the remaining
four, four, four and four highest paid employees who are neither a director nor chief executive of the Company during the Relevant
Periods and six months ended 30 June 2023 are as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, bonuses, allowances and benefits in kind . . . 2,622 2,303 2,610 1,312 1,290
Pension scheme contributions ................. 6 8 7 1 1 5 7 7 3 5 1
Share-based payment expenses ................ 5,444 6,496 5,481 2,677 3,137
8,134 8,870 8,248 4,062 4,478
The number of non-director and non-chief executive highest paid employees whose remuneration fell within the following
bands is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
(Unaudited)
Number of employees
Below HKD1,000,000 ....................... — — — 2 —
HKD1,000,001 to HKD1,500,000 .............. 2 — — 2 4
HKD1,500,001 to HKD2,000,000 .............. 1 2 2 — —
HKD2,500,001 to HKD3,000,000 .............. 1 1 2 — —
HKD4,000,001 to HKD4,500,000 .............. — 1———
44444
During the Relevant Periods and six months ended 30 June 2023, restricted share units were granted to seven non-director
and non-chief executive highest paid employees in respect of their services to the Group, further details of which are included in the
disclosures in note 32 to the Historical Financial Information. The fair value of such shares, which has been recognised in the
statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included in the Historical
Financial Information for the Relevant Periods and the six months ended 30 June 2023 is included in the above non-director and
non-chief executive highest paid employees’ remuneration disclosures.
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which members
of the Group are domiciled and operate.
Chinese Mainland
The provision for corporate income tax in Chinese Mainland is based on the statutory rate of 25% of the taxable profits
determined in accordance with the PRC Corporate Income Tax Law which was approved and became effective on 1 January 2008.
Shenzhen Qimo Technology Co., Ltd., a subsidiary of the Group in Chinese Mainland, is qualified as a high and new technology
enterprise and was subject to income tax at a preferential tax rate of 15% for the years ended 31 December 2021 and 2022.
The Company was approved as a “High and New Technology Enterprise” and entitled to a preferential income tax rate of 15%
during the Relevant Periods and six months ended 30 June 2023. This qualification is subject to review by the relevant tax authority
in the PRC for every three years.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 435 ---
Overseas subsidiaries
No income tax on the overseas subsidiaries has been provided as there were no assessable profit arising in such overseas tax
jurisdictions during the Relevant Periods.
The income tax expense of the Group for the Relevant Periods and six months ended 30 June 2023 is analysed as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current income tax ........................ 16,302 228 14,778 2 539
Deferred income tax ....................... 1 6 3 (363) (1,297) 123 (240)
Total tax charge/(credit) for the year ............ 16,465 (135) 13,481 125 299
A reconciliation of the expected income tax calculated at the preferential tax rate and loss before income tax, with the actual
income tax at the effective tax rate is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss before tax ........................... (25,291) (52,612) (89,800) (51,562) (59,584)
Tax charge at the preferential tax rate of 25% ...... (6,323) (13,153) (22,450) (12,891) (14,896)
Entities entitled to lower statutory income tax rates . . 2,455 8,104 7,976 5,005 5,558
Additional deductible allowance for qualified
research and development expenses ........... (5,311) (6,757) (8,755) (3,956) (3,692)
Temporary differences and tax losses not recognised . 25,606 9,595 31,956 10,975 11,197
Expenses not deductible for tax ................ 3 8 2,076 4,754 992 2,132
Tax charge/(credit) at the Group’s effective tax rate . . 16,465 (135) 13,481 125 299
Based on Public Notice 2022 No. 28 issued by the State Tax Bureau of the PRC on 22 September 2022, the enterprises
originally eligible for an additional 75% deduction of eligible R&D expenses can further enjoy an increased super deduction ratio
of 100% from 1 October 2022 to 31 December 2022 (i.e. the fourth quarter of 2022). Furthermore, based on Public Notice 2023 No.
7 issued by the State Tax Bureau of the PRC on 26 March 2023, the enterprises were eligible for a 100% deduction of eligible R&D
expenses from 1 January 2023. The Company has claimed such additional super deduction during the Relevant Periods and six
months ended 30 June 2023.
11. DIVIDENDS
No dividend was paid or declared by the Company during the Relevant Periods and the six months ended 30 June 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 436 ---
12. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic loss per share amounts is based on the loss attributable to ordinary equity holders of the parent
and the weighted average number of ordinary shares in issue during the Relevant Periods and the six months ended 30 June 2023.
The weighted average number of ordinary shares in issue for 2021 and 2022 before the conversion into a joint stock company was
determined by assuming that the paid-in capital had been fully converted into share capital at the same conversion ratio of 1:35.81
as upon transformation into a joint stock company in December 2022.
No adjustment has been made to the basic loss per share amounts presented for the Relevant Periods and six months ended 30
June 2023 in respect of a dilution as the Group had no potentially dilutive ordinary shares in issue.
The calculations of basic and diluted loss per share are based on:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
(Unaudited)
Loss
Loss attributable to ordinary equity holders of
the parent, used in the basic earnings per share
calculation (RMB’000) .................... (41,558) (52,477) (103,281) (51,687) (59,883)
Shares
Weighted average number of ordinary shares in
issue during the year, used in the basic loss
per share calculation (’000) ................. 330,150 348,862 360,000 360,000 360,000
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021
C o s t ......................... 4,190 982 9,389 1,211 — 15,772
Accumulated depreciation ............ (2,443) (462) (3,368) — — (6,273)
Net carrying amount ............... 1,747 520 6,021 1,211 — 9,499
At 1 January 2021, net of accumulated
depreciation ................... 1,747 520 6,021 1,211 — 9,499
Additions ...................... 9 0 6 4 5 6 1 9 9 5 5 8 89,427 91,546
Transfer from inventories* ............ — — 10,261 — — 10,261
Disposals ...................... ( 8 ) — (384) — — (392)
Depreciation provided
during the year ................. (44) (52) (2,357) (1,065) — (3,518)
At 31 December 2021, net of accumulated
depreciation ................... 2,601 924 13,740 704 89,427 107,396
At 31 December 2021
C o s t ......................... 5,076 1,438 19,239 1,769 89,427 116,949
Accumulated depreciation ............ (2,475) (514) (5,499) (1,065) — (9,553)
Net carrying amount ............... 2,601 924 13,740 704 89,427 107,396
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 437 ---
Buildings
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
C o s t ................. — 5,076 1,438 19,239 1,769 89,427 116,949
Accumulated depreciation .... — (2,475) (514) (5,499) (1,065) — (9,553)
Net carrying amount ........ — 2,601 924 13,740 704 89,427 107,396
At 1 January 2022, net of
accumulated depreciation . . . — 2,601 924 13,740 704 89,427 107,396
Additions .............. 61,733 2,563 — 2,149 2,856 16,392 85,693
Transfer from inventories* .... — — — 17,633 — — 17,633
Transfer ............... 80,782 4,761 — 15,383 2,619 (103,545) —
Disposals .............. — (16) — (95) — — (111)
Depreciation provided
during the year ......... (3,631) (2,246) (279) (8,936) (1,071) — (16,163)
At 31 December 2022, net of
accumulated depreciation . . . 138,884 7,663 645 39,874 5,108 2,274 194,448
At 31 December 2022
C o s t ................. 142,515 12,332 1,438 53,832 7,244 2,274 219,635
Accumulated depreciation .... (3,631) (4,669) (793) (13,958) (2,136) — (25,187)
Net carrying amount ........ 138,884 7,663 645 39,874 5,108 2,274 194,448
Buildings
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
C o s t ................. 142,515 12,332 1,438 53,832 7,244 2,274 219,635
Accumulated depreciation .... (3,631) (4,669) (793) (13,958) (2,136) — (25,187)
Net carrying amount ........ 138,884 7,663 645 39,874 5,108 2,274 194,448
At 1 January 2023, net of
accumulated depreciation . . . 138,884 7,663 645 39,874 5,108 2,274 194,448
Additions .............. — 1,557 — 2,601 762 5,731 10,651
Transfer from inventories* .... — — — 11,055 — — 11,055
Transfer ............... 8 7 5 — — 3,795 960 (5,630) —
Disposals .............. (223) (31) — (574) — — (828)
Depreciation provided
during the year ......... (4,898) (3,321) (252) (15,064) (2,021) — (25,556)
At 31 December 2023, net of
accumulated depreciation . . . 134,638 5,868 393 41,687 4,809 2,375 189,770
At 31 December 2023
C o s t ................. 143,167 13,386 1,438 69,770 8,966 2,375 239,102
Accumulated depreciation .... (8,529) (7,518) (1,045) (28,083) (4,157) — (49,332)
Net carrying amount ........ 134,638 5,868 393 41,687 4,809 2,375 189,770
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 438 ---
Buildings
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 June 2024
At 31 December 2023
and at 1 January 2024:
C o s t .................. 143,167 13,386 1,438 69,770 8,966 2,375 239,102
Accumulated depreciation ..... (8,529) (7,518) (1,045) (28,083) (4,157) — (49,332)
Net carrying amount ........ 134,638 5,868 393 41,687 4,809 2,375 189,770
At 1 January 2024, net of
accumulated depreciation .... 134,638 5,868 393 41,687 4,809 2,375 189,770
Additions ............... — 5 6 7 — 3,264 70 3,976 7,877
Transfer from inventories* .... — — — 2,832 — — 2,832
Transfer ............... — 2 8 3 — 6 0 2 5 7 7 (1,462) —
Disposals ............... — ( 2 ) — (1,636) — — (1,638)
Depreciation provided
during the period ......... (2,456) (1,612) (126) (8,337) (888) — (13,419)
At 30 June 2024, net of
accumulated depreciation .... 132,182 5,104 267 38,412 4,568 4,889 185,422
At 30 June 2024
C o s t .................. 143,167 14,234 1,438 74,832 9,613 4,889 248,173
Accumulated depreciation ..... (10,985) (9,130) (1,171) (36,420) (5,045) — (62,751)
Net carrying amount ........ 132,182 5,104 267 38,412 4,568 4,889 185,422
The Company
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021
Cost ....................... 3,716 982 8,687 967 14,352
Accumulated depreciation ........ (2,140) (462) (3,250) — (5,852)
Net carrying amount ............ 1,576 520 5,437 967 8,500
At 1 January 2021, net of
accumulated depreciation ....... 1,576 520 5,437 967 8,500
Additions ................... 8 9 9 4 5 6 5 7 5 5 8 1,970
Transfer from inventories* ........ — — 10,261 — 10,261
Disposals .................... ( 2 ) — (80) — (82)
Depreciation provided
during the year .............. (82) (52) (2,336) (869) (3,339)
At 31 December 2021, net of
accumulated depreciation ....... 2,391 924 13,339 656 17,310
At 31 December 2021
Cost ....................... 4,605 1,438 18,748 1,525 26,316
Accumulated depreciation ........ (2,214) (514) (5,409) (869) (9,006)
Net carrying amount ............ 2,391 924 13,339 656 17,310
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 439 ---
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost ....................... 4,605 1,438 18,748 1,525 26,316
Accumulated depreciation ........ (2,214) (514) (5,409) (869) (9,006)
Net carrying amount ............ 2,391 924 13,339 656 17,310
At 1 January 2022, net of
accumulated depreciation ....... 2,391 924 13,339 656 17,310
Additions ................... 1,414 — 1,409 2,801 5,624
Transfer from inventories* ........ — — 17,633 — 17,633
Disposals .................... ( 8 ) — (89) — (97)
Depreciation provided
during the year .............. (1,093) (279) (7,287) (734) (9,393)
At 31 December 2022, net of
accumulated depreciation ....... 2,704 645 25,005 2,723 31,077
At 31 December 2022
Cost ....................... 5,962 1,438 37,225 4,326 48,951
Accumulated depreciation ........ (3,258) (793) (12,220) (1,603) (17,874)
Net carrying amount ............ 2,704 645 25,005 2,723 31,077
Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost ....................... 5,962 1,438 37,225 4,326 48,951
Accumulated depreciation ........ (3,258) (793) (12,220) (1,603) (17,874)
Net carrying amount ............ 2,704 645 25,005 2,723 31,077
At 1 January 2023, net of
accumulated depreciation ....... 2,704 645 25,005 2,723 31,077
Additions ................... 7 6 1 — 2,526 — 3,287
Transfer from inventories* ........ — — 11,055 — 11,055
Disposals .................... ( 8 ) — (3,078) — (3,086)
Depreciation provided
during the year .............. (1,379) (252) (11,614) (958) (14,203)
At 31 December 2023, net of
accumulated depreciation ....... 2,078 393 23,894 1,765 28,130
At 31 December 2023
Cost ....................... 6,517 1,438 45,940 4,326 58,221
Accumulated depreciation ........ (4,439) (1,045) (22,046) (2,561) (30,091)
Net carrying amount ............ 2,078 393 23,894 1,765 28,130
APPENDIX I ACCOUNTANTS’ REPORT
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Furniture
and
fixtures
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 June 2024
At 31 December 2023
and at 1 January 2024:
Cost ........................ 6,517 1,438 45,940 4,326 58,221
Accumulated depreciation ........ (4,439) (1,045) (22,046) (2,561) (30,091)
Net carrying amount ............ 2,078 393 23,894 1,765 28,130
At 1 January 2024, net of
accumulated depreciation ....... 2,078 393 23,894 1,765 28,130
Additions .................... 1 3 6 — 2,883 — 3,019
Transfer from inventories* ........ — — 2 5 5 — 2 5 5
Disposals .................... ( 9 ) — (2,626) — (2,635)
Depreciation provided
during the period ............. (624) (126) (6,143) (371) (7,264)
At 30 June 2024, net of
accumulated depreciation ....... 1,581 267 18,263 1,394 21,505
At 30 June 2024
Cost ........................ 6,553 1,438 45,645 4,326 57,962
Accumulated depreciation ........ (4,972) (1,171) (27,382) (2,932) (36,457)
Net carrying amount ............ 1,581 267 18,263 1,394 21,505
* When the products are used for promotion, exhibition and training purposes, the products are transferred from
inventories to property, plant and equipment and depreciated over three years.
APPENDIX I ACCOUNTANTS’ REPORT
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14. INTANGIBLE ASSETS
The Group
Software
RMB’000
31 December 2021
At 1 January 2021
Cost ..................................................................... 4 7 8
Accumulated amortisation ..................................................... (258)
Net carrying amount ......................................................... 2 2 0
At 1 January 2021, net of accumulated amortisation
Additions ................................................................. 1,901
Amortisation provided during the year ............................................. (119)
At 31 December 2021, net of accumulated amortisation ................................. 2,002
At 31 December 2021
Cost ..................................................................... 2,379
Accumulated amortisation ..................................................... (377)
Net carrying amount ......................................................... 2,002
Software
RMB’000
31 December 2022
At 1 January 2022
Cost ..................................................................... 2,379
Accumulated amortisation ..................................................... (377)
Net carrying amount ......................................................... 2,002
At 1 January 2022, net of accumulated amortisation
Additions ................................................................. 2,062
Disposals ................................................................. (281)
Amortisation provided during the year ............................................. (627)
At 31 December 2022, net of accumulated amortisation ................................. 3,156
At 31 December 2022
Cost ..................................................................... 4,092
Accumulated amortisation ..................................................... (936)
Net carrying amount ......................................................... 3,156
APPENDIX I ACCOUNTANTS’ REPORT
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Software
RMB’000
31 December 2023
At 1 January 2023
Cost ..................................................................... 4,092
Accumulated amortisation ..................................................... (936)
Net carrying amount ......................................................... 3,156
At 1 January 2023, net of accumulated amortisation
Additions ................................................................. 5 2
Disposals ................................................................. (195)
Amortisation provided during the year ............................................. (758)
At 31 December 2023, net of accumulated amortisation ................................. 2,255
At 31 December 2023
Cost ..................................................................... 3,949
Accumulated amortisation ..................................................... (1,694)
Net carrying amount ......................................................... 2,255
Software
RMB’000
30 June 2024
At 1 January 2024:
Cost ..................................................................... 3,949
Accumulated amortisation ...................................................... (1,694)
Net carrying amount .......................................................... 2,255
At 1 January 2024, net of accumulated amortisation ................................... 2,255
Additions ................................................................. 1,213
Amortisation provided during the period ............................................ (484)
At 30 June 2024, net of accumulated amortisation ..................................... 2,984
At 30 June 2024:
Cost ..................................................................... 5,162
Accumulated amortisation ...................................................... (2,178)
Net carrying amount .......................................................... 2,984
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Software
RMB’000
31 December 2021
At 1 January 2021
Cost ..................................................................... 4 7 8
Accumulated amortisation ..................................................... (258)
Net carrying amount ......................................................... 2 2 0
At 1 January 2021, net of accumulated amortisation
Additions ................................................................. 1,551
Amortisation provided during the year ............................................. (50)
At 31 December 2021, net of accumulated amortisation ................................. 1,721
At 31 December 2021
Cost ..................................................................... 2,029
Accumulated amortisation ..................................................... (308)
Net carrying amount ......................................................... 1,721
Software
RMB’000
31 December 2022
At 1 January 2022
Cost ..................................................................... 2,029
Accumulated amortisation ..................................................... (308)
Net carrying amount ......................................................... 1,721
At 1 January 2022, net of accumulated amortisation
Additions ................................................................. 1 2 7
Disposals ................................................................. —
Amortisation provided during the year ............................................. (401)
At 31 December 2022, net of accumulated amortisation ................................. 1,447
At 31 December 2022
Cost ..................................................................... 2,157
Accumulated amortisation ..................................................... (710)
Net carrying amount ......................................................... 1,447
APPENDIX I ACCOUNTANTS’ REPORT
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Software
RMB’000
31 December 2023
At 1 January 2023
Cost ..................................................................... 2,157
Accumulated amortisation ..................................................... (710)
Net carrying amount ......................................................... 1,447
At 1 January 2023, net of accumulated amortisation
Additions ................................................................. 5 2
Disposals ................................................................. —
Amortisation provided during the year ............................................. (433)
At 31 December 2023, net of accumulated amortisation ................................. 1,066
At 31 December 2023
Cost ..................................................................... 2,209
Accumulated amortisation ..................................................... (1,143)
Net carrying amount ......................................................... 1,066
Software
RMB’000
30 June 2024
At 1 January 2024:
Cost ..................................................................... 2,209
Accumulated amortisation ...................................................... (1,143)
Net carrying amount .......................................................... 1,066
At 1 January 2024, net of accumulated amortisation .................................... 1,066
Additions ................................................................. 1,136
Amortisation provided during the period ............................................ (302)
At 30 June 2024, net of accumulated amortisation ..................................... 1,900
At 30 June 2024:
Cost ..................................................................... 3,345
Accumulated amortisation ...................................................... (1,445)
Net carrying amount .......................................................... 1,900
APPENDIX I ACCOUNTANTS’ REPORT
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15. LEASES
The Group as a lessee
The Group has lease contracts for various items of land and buildings. Leases of land and buildings generally have lease
terms between 1 and 50 years.
(a) Right-of-use assets
The carrying amounts of right-of-use assets and the movements during the Relevant Periods are as follows:
The Group
Buildings
Leasehold
land Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 ................................... 6,037 — 6,037
Additions ......................................... 6,574 17,420 23,994
Depreciation charge .................................. (4,136) (581) (4,717)
At 31 December 2021 ................................ 8,475 16,839 25,314
At 1 January 2022 ................................... 8,475 16,839 25,314
Additions ......................................... 7,125 9,658 16,783
Depreciation charge .................................. (5,293) (710) (6,003)
At 31 December 2022 ................................ 10,307 25,787 36,094
At 1 January 2023 ................................... 10,307 25,787 36,094
Additions ......................................... 6,013 — 6,013
Depreciation charge .................................. (6,241) (775) (7,016)
Other reduction ..................................... (1,260) — (1,260)
At 31 December 2023 ................................ 8,819 25,012 33,831
At 1 January 2024 ................................... 8,819 25,012 33,831
Additions ......................................... 5,062 — 5,062
Depreciation charge .................................. (2,488) (405) (2,893)
Other reduction ..................................... (2,201) — (2,201)
Exchange realignment ................................ 3 9 — 3 9
At 30 June 2024 ..................................... 9,231 24,607 33,838
The Company
Buildings Total
RMB’000 RMB’000
At 1 January 2021 ............................................. 5,312 5,312
Additions ................................................... 5,883 5,883
Depreciation charge ........................................... (3,580) (3,580)
At 31 December 2021 .......................................... 7,615 7,615
At 1 January 2022 ............................................. 7,615 7,615
Additions ................................................... 4,790 4,790
Depreciation charge ........................................... (4,448) (4,448)
At 31 December 2022 .......................................... 7,957 7,957
At 1 January 2023 ............................................. 7,957 7,957
Additions ................................................... 1,862 1,862
Depreciation charge ........................................... (4,398) (4,398)
At 31 December 2023 .......................................... 5,421 5,421
At 1 January 2024 ............................................. 5,421 5,421
Additions ................................................... 4,393 4,393
Depreciation charge ............................................ (1,518) (1,518)
Other reduction ............................................... (2,201) (2,201)
At 30 June 2024 ............................................... 6,095 6,095
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are as follows:
The Group
Y ear ended 31 December
Six months
ended
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at 1 January .................... 5,824 8,391 10,747 9,407
Additions .................................. 6,574 7,125 6,013 5,062
Accretion of interest recognised during the year/period . . 289 440 459 161
Other reduction ............................. — — (1,276) (2,198)
Lease payment .............................. (4,296) (5,209) (6,536) (3,086)
Exchange realignment ......................... — — — (99)
Carrying amount at 31 December/30 June ............ 8,391 10,747 9,407 9,247
Analysed into:
Current portion .............................. 3,108 5,016 4,874 4,415
Non-current portion .......................... 5,283 5,731 4,533 4,832
The Company
Y ear ended 31 December
Six months
ended
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at 1 January .................... 5,074 7,547 8,291 5,746
Additions .................................. 5,883 4,790 1,862 4,393
Accretion of interest recognised during the year/period . . 214 384 287 96
Other reduction .............................. — — — (2,198)
Lease payment .............................. (3,624) (4,430) (4,694) (1,840)
Carrying amount at 31 December/30 June ........... 7,547 8,291 5,746 6,197
Analysed into:
Current portion .............................. 2,548 4,025 2,952 2,531
Non-current portion .......................... 4,999 4,266 2,794 3,666
APPENDIX I ACCOUNTANTS’ REPORT
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(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Lease payments in respect of short-term leases ..... 1,334 596 1,092 400 514
Interest on lease liabilities ................... 2 8 9 4 4 0 4 5 9 2 5 0 1 6 1
Depreciation charge of right-of-use assets ........ 4,717 6,003 7,016 2,766 2,893
Total amount recognised in profit or loss ......... 6,340 7,039 8,567 3,416 3,568
The Company
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Lease payments in respect of short-term leases ..... 9 8 5 5 5 1 6 9 3 3 2 7 4 2 1
Interest on lease liabilities ................... 2 1 4 3 8 4 2 8 7 1 6 3 9 6
Depreciation charge of right-of-use assets ........ 3,580 4,448 4,398 2,182 1,518
Total amount recognised in profit or loss ......... 4,779 5,383 5,378 2,672 2,035
16. INVESTMENT IN AN ASSOCIATE
The Group’s shareholding in an associate is held through the Company. Zhejiang Tiexi intelligent technology Co., LTD
(“Zhejiang Tiexi ”), which is considered as an immaterial associate of the Group.
The Group and The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets ........................... 2 0 2 2 0 8 2 0 8 2 0 8
Goodwill on acquisition ........................ 9 3 0 9 3 0 9 3 0 9 3 0
1,132 1,138 1,138 1,138
Provision for impairment ....................... — (1,138) (1,138) (1,138)
1,132 — — —
Although the Company holds less than 20% of the equity voting rights in Zhejiang Tiexi, it has significant influence over
Zhejiang Tiexi as it has the power to participate in the financial and operating policy decisions of Zhejiang Tiexi by appointing a
director in the board.
Since Zhejiang Tiexi experienced a significant decline in its revenue and profitability, the Group carried out impairment
assessment on the investment in Zhejiang Tiexi and a full provision was made in 2022.
APPENDIX I ACCOUNTANTS’ REPORT
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17. INVENTORIES
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ............................... 33,991 60,624 50,680 48,705
Work in process ............................. 5,828 16,898 27,554 26,218
Finished goods .............................. 20,647 34,414 53,895 72,798
Goods in transit ............................. 10,435 19,907 9,391 7,575
70,901 131,843 141,520 155,296
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ............................... 33,712 4,318 4,557 3,829
Work in process ............................. 5,378 2,485 840 298
Finished goods .............................. 20,063 16,705 21,332 26,813
Goods in transit ............................. 9,637 20,783 10,034 11,539
68,790 44,291 36,763 42,479
18. DEFERRED TAX
The movements in deferred tax liabilities and assets during the Relevant Periods are as follows:
Deferred tax assets
The Group
Unrealised
gains and
losses
Leases
liabilities
Fair value
adjustments Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2021 .......................... 8 6 7 6 1 — 8 4 7
Credited/(debited) to profit or loss ................. (81) 557 — 476
As at 31 December 2021 ........................ 5 1,318 — 1,323
As at 31 December 2021 and 1 January 2022 .......... 5 1,318 — 1,323
Credited to profit or loss ........................ 7 7 3 8 9 — 4 6 6
As at 31 December 2022 ........................ 8 2 1,707 — 1,789
As at 31 December 2022 and 1 January 2023 .......... 8 2 1,707 — 1,789
Credited/(debited) to profit or loss ................. 1,797 (681) 12 1,128
As at 31 December 2023 ........................ 1,879 1,026 12 2,917
As at 1 January 2024 .......................... 1,879 1,026 12 2,917
Credited/(debited) to profit or loss ................. 5 3 2 3 4 1 (12) 861
As at 30 June 2024 ............................ 2,411 1,367 — 3,778
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 449 ---
The Company
Leases
liabilities
Fair value
adjustments Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 ................................. 7 6 1 — 7 6 1
Credited to profit or loss .............................. 3 7 1 — 3 7 1
As at 31 December 2021 .............................. 1,132 — 1,132
As at 31 December 2021 and 1 January 2022 ................ 1,132 — 1,132
Credited to profit or loss .............................. 1 1 2 — 1 1 2
As at 31 December 2022 .............................. 1,244 — 1,244
As at 31 December 2022 and 1 January 2023 ................ 1,244 — 1,244
Credited/(debited) to profit or loss ....................... (382) 12 (370)
As at 31 December 2023 .............................. 8 6 2 1 2 8 7 4
As at 1 January 2024 ................................. 8 6 2 1 2 8 7 4
Credited/(debited) to profit or loss ........................ 6 8 (12) 56
As at 30 June 2024 ................................... 9 3 0 — 9 3 0
Deferred tax liabilities
The Group
Right-of-use
assets
Fair value
change of
financial assets
at fair value
through profit
or loss Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 ....................... 7 9 7 1 5 0 9 4 7
Debited to profit or loss ..................... 5 3 9 1 0 4 6 4 3
As at 31 December 2021 ..................... 1,336 254 1,590
As at 31 December 2021 and 1 January 2022 ....... 1,336 254 1,590
Debited/(credited) to profit or loss .............. 2 9 7 (194) 103
As at 31 December 2022 ..................... 1,633 60 1,693
As at 31 December 2022 and 1 January 2023 ....... 1,633 60 1,693
(Credited)/debited to profit or loss .............. (679) 560 (119)
As at 31 December 2023 ..................... 9 5 4 6 2 0 1,574
As at 1 January 2024 ........................ 9 5 4 6 2 0 1,574
Debited to profit or loss ...................... 3 8 1 2 4 0 6 2 1
As at 30 June 2024 ......................... 1,335 860 2,195
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Right-of-use
assets
Fair value
change of
financial assets
at fair value
through profit
or loss Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 ....................... 7 9 7 — 7 9 7
Debited to profit or loss ..................... 3 4 6 2 5 4 6 0 0
As at 31 December 2021 ..................... 1,143 254 1,397
As at 31 December 2021 and 1 January 2022 ....... 1,143 254 1,397
Debited/(credited) to profit or loss .............. 5 1 (194) (143)
As at 31 December 2022 ..................... 1,194 60 1,254
As at 31 December 2022 and 1 January 2023 ....... 1,194 60 1,254
(Credited)/debited to profit or loss .............. (381) 560 179
As at 31 December 2023 ..................... 8 1 3 6 2 0 1,433
As at 1 January 2024 ........................ 8 1 3 6 2 0 1,433
Debited to profit or loss ..................... 1 0 1 2 4 0 3 4 1
As at 30 June 2024 ......................... 9 1 4 8 6 0 1,774
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of financial position.
The following is an analysis of the deferred tax balances of the Group and the Company for financial reporting purposes:
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax liabilities recognised in the consolidated
statement of financial position .................. 2 7 2 1 0 5 5 9 8 4 5
Net deferred tax assets recognised in the consolidated
statement of financial position .................. 5 1 0 6 1,902 2,427
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax liabilities recognised in the consolidated
statement of financial position .................. 2 6 5 1 0 5 5 9 8 4 5
APPENDIX I ACCOUNTANTS’ REPORT
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Deferred tax assets have not been recognised in respect of the following items:
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses ................................. 207,361 292,992 414,720 497,616
Deductible temporary differences ................. 180,581 187,251 242,021 225,761
387,942 480,243 656,741 723,377
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses .................................. 187,414 267,582 374,427 402,834
Deductible temporary differences ................. 26,423 46,353 53,741 44,376
213,837 313,935 428,168 447,210
The Group has accumulated tax losses in Chinese Mainland of RMB207,361,000, RMB290,734,000, RMB407,884,000 and
RMB478,263,000 in aggregate as at 31 December 2021, 2022 and 2023 and 30 June 2024, respectively, which will expire in one to
ten years to offset against future taxable profits of the companies in which losses were incurred. The Group also has accumulated
tax losses in the United States and Hong Kong of RMB2,258,000, RMB6,836,000 and RMB19,353,000 in aggregate as at 31
December 2022 and 2023 and 30 June 2024, respectively, that can be carried forward indefinitely to offset against future taxable
profits of the companies in which losses were incurred. Deferred tax assets have not been recognised in respect of the above items
as it is not considered probable that taxable profits will be available against which the above items can be utilised.
19. TRADE AND BILLS RECEIV ABLES
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
Third parties .............................. 25,764 50,636 47,443 36,378
Less: Impairment of trade receivables ........... 9,347 10,280 6,876 5,728
Trade receivables, net ......................... 16,417 40,356 40,567 30,650
Bills receivables* ............................ 2 1 8 0 1,041 2,390
16,438 40,436 41,608 33,040
Analysed into:
Current portion ............................. 15,046 39,608 41,608 33,040
Non-current portion ......................... 1,392 828 — —
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
Subsidiaries ............................... 7,148 128,435 111,811 88,967
Third parties .............................. 25,264 46,805 32,850 29,615
Less: Impairment of trade receivables ........... 9,283 10,122 5,908 5,273
Trade receivables, net ......................... 23,129 165,118 138,753 113,309
Bills receivables* ............................ 2 1 — 9 5 6 1,589
23,150 165,118 139,709 114,898
Analysed into:
Current portion ............................. 21,758 164,290 139,709 114,898
Non-current portion ......................... 1,392 828 — —
* Bills receivable is subject to impairment under the general approach and the impairment is considered to be minimal.
The Group’s trading terms with its certain customers are on credit, and the credit period is generally 30 to 90 days. Some
customers were granted more than credit periods of one year, depending on the specific payment terms in each contract. The Group
seeks to maintain strict control over its outstanding receivables and has a credit control department to minimise credit risk. Overdue
balances are reviewed regularly by management. In view of the aforementioned and the fact that the Group’s trade receivables relate
to diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit
enhancements over its trade receivable balances. Trade receivables are non-interest-bearing.
An ageing analysis of the trade receivables as at the end of each of the Relevant Periods, based on the invoice date and net of
loss allowance, is as follows:
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ............................... 15,888 37,686 34,907 28,188
1 to 2 years ................................ 3 5 0 2,668 5,456 2,118
2 to 3 years ................................ 1 7 9 2 2 0 4 3 4 4
16,417 40,356 40,567 30,650
The Company
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ............................... 18,153 162,448 70,420 86,985
1 to 2 years ................................ 3,101 2,668 68,129 25,980
2 to 3 years ................................ 1,875 2 204 344
23,129 165,118 138,753 113,309
APPENDIX I ACCOUNTANTS’ REPORT
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The movements in the loss allowance for impairment of trade receivables are as follows:
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 12,895 9,347 10,280 6,876
Impairment losses, net ......................... (3,411) 979 3,909 (1,095)
Amount written off as uncollectible ............... (137) (46) (7,313) (53)
At end of year/period .......................... 9,347 10,280 6,876 5,728
The Company
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 12,881 9,283 10,122 5,908
Impairment losses, net ......................... (3,461) 839 3,099 (596)
Amount written off as uncollectible ............... (137) — (7,313) (39)
At end of year/period ......................... 9,283 10,122 5,908 5,273
An impairment analysis is performed at the end of each of Relevant Periods using a provision matrix to measure expected
credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns.
The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Trade
receivables for which the counterparties failed to make the demanded repayments are defaulted receivables. The Group has
provided full impairment for the defaulted receivables. The Company estimated that the expected loss rate for its trade receivables
due from subsidiaries is minimal.
Set out below is the information about the credit risk exposure on the Group’s and the Company’s trade receivables using a
provision matrix:
The Group
As at 31 December 2021
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Defaulted receivables ................................. 7,117 100.00% 7,117
Other trade receivables aged:
Current ......................................... 15,540 5.84% 907
Past due:
Within 1 year ................................... 1,333 5.85% 78
Between 1 and 2 years ............................. 4 7 6 26.47% 126
Between 2 and 3 years ............................. 9 2 8 80.71% 749
Over 3 years .................................... 3 7 0 100.00% 370
25,764 36.28% 9,347
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 454 ---
As at 31 December 2022
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Defaulted receivables ................................. 7,117 100.00% 7,117
Other trade receivables aged:
Current ......................................... 33,371 4.12% 1,374
Past due:
Within 1 year ................................... 5,934 4.13% 245
Between 1 and 2 years ............................. 3,282 18.71% 614
Between 2 and 3 years ............................. 9 77.78% 7
Over 3 years .................................... 9 2 3 100.00% 923
50,636 20.30% 10,280
As at 31 December 2023
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Defaulted receivables ................................. 1,101 100.00% 1,101
Other trade receivables aged:
Current ......................................... 31,217 5.22% 1,631
Past due:
Within 1 year ................................... 5,614 5.22% 293
Between 1 and 2 years ............................. 7,158 23.78% 1,702
Between 2 and 3 years ............................. 1,430 85.73% 1,226
Over 3 years .................................... 9 2 3 100.00% 923
47,443 14.49% 6,876
As at 30 June 2024
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Defaulted receivables ................................. 1,101 100.00% 1,101
Other trade receivables aged:
Current ......................................... 20,811 4.57% 951
Past due:
Within 1 year ................................... 8,726 4.57% 399
Between 1 and 2 years ............................. 2,736 22.57% 617
Between 2 and 3 years ............................. 1,210 71.57% 866
Over 3 years .................................... 1,794 100.00% 1,794
36,378 15.75% 5,728
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
As at 31 December 2021
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Due from subsidiaries ................................. 7,148 — —
Defaulted receivables ................................. 7,117 100.00% 7,117
Other trade receivables aged:
Current ......................................... 15,091 5.84% 881
Past due:
Within 1 year ................................... 1,329 5.87% 78
Between 1 and 2 years ............................. 4 7 6 26.47% 126
Between 2 and 3 years ............................. 8 8 1 80.70% 711
Over 3 years .................................... 3 7 0 100.00% 370
32,412 28.64% 9,283
As at 31 December 2022
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit losses
RMB’000 RMB’000
Due from subsidiaries ................................. 128,435 — —
Defaulted receivables ................................. 7,117 100.00% 7,117
Other trade receivables aged:
Current ......................................... 31,036 4.12% 1,278
Past due:
Within 1 year ................................... 4,438 4.12% 183
Between 1 and 2 years ............................. 3,282 18.71% 614
Between 2 and 3 years ............................. 9 77.78% 7
Over 3 years .................................... 9 2 3 100.00% 923
175,240 5.78% 10,122
As at 31 December 2023
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit loss
RMB’000 RMB’000
Due from subsidiaries ................................. 111,811 — —
Defaulted receivables ................................. 1,101 100.00% 1,101
Other trade receivables aged:
Current ......................................... 19,202 5.23% 1,004
Past due:
Within 1 year ................................... 4,144 5.24% 217
Between 1 and 2 years ............................. 6,050 23.75% 1,437
Between 2 and 3 years ............................. 1,430 85.73% 1,226
Over 3 years .................................... 9 2 3 100.00% 923
144,661 4.08% 5,908
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 456 ---
As at 30 June 2024
Gross
carrying
amount
Expected
credit loss
rate
Expected
credit loss
RMB’000 RMB’000
Due from subsidiaries ................................. 88,967 — —
Defaulted receivables ................................. 1,101 100.00% 1,101
Other trade receivables aged:
Current ......................................... 16,022 4.57% 733
Past due:
Within 1 year ................................... 7,563 4.57% 345
Between 1 and 2 years ............................. 1,925 22.57% 434
Between 2 and 3 years ............................. 1,210 71.57% 866
Over 3 years .................................... 1,794 100.00% 1,794
118,582 4.45% 5,273
20. PREPA YMENTS, DEPOSITS AND OTHER RECEIV ABLES
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable ..................... 5,143 10,659 15,949 10,930
Deferred listing expenses ....................... — — — 2,102
Prepayments ................................ 7,482 7,480 12,339 13,387
Other receivables and deposit .................... 5,684 3,308 2,987 2,386
Less: Impairment of other receivables and deposit ...... (715) (373) (431) (392)
17,594 21,074 30,844 28,413
Non-current
Value-added tax recoverable ..................... — — 4,090 3,997
Other receivables and deposits ................... 7 8 3 5 3 5 1,076 1,557
Prepayments for property, plant and equipment ........ 6 5 8 2 9 4 1 1 2 1,916
1,441 829 5,278 7,470
The Company
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable ..................... 8 2 1 8 2 8 7
Deferred listing expenses ....................... — — — 2,082
Prepayments ................................ 7,718 5,029 10,211 11,206
Other receivables and deposit .................... 15,310 16,651 98,187 147,508
Less: Impairment of other receivables and deposit ...... (644) (13,703) (11,224) (11,262)
22,392 7,998 97,256 149,621
Non-Current
Other receivables and deposit .................... 6 3 6 2 6 6 9 4 3 9 0 1
Prepayments for property, plant and equipment ........ 5 7 1 2 4 2 1 5 1,893
1,207 508 958 2,794
APPENDIX I ACCOUNTANTS’ REPORT
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Other receivables had no historical default. The financial assets included in the above balances relating to receivables were
categorised in stage 1 at the end of each of the Relevant Periods, except for the Company’s other receivables due from a subsidiary
which were fully impaired with impairment provision of RMB13,048,000, RMB10,880,000 and RMB10,888,000 as at 31 December
2022 and 2023 and 30 June 2024, respectively, as the subsidiary has ceased to operate since 2022. In calculating the expected credit
loss rate, the Group considers the historical loss rate and adjusts for forward-looking macroeconomic data. As at 31 December 2021,
2022 and 2023 and 30 June 2024, the Group estimated the expected credit losses for other receivables to be RMB715,000,
RMB373,000, RMB431,000 and RMB392,000, respectively.
Other receivables are unsecured, non-interest-bearing and are collectable within one year.
The movements in the loss allowance for impairment of other receivables are as follows:
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 4 8 9 7 1 5 3 7 3 4 3 1
Impairment losses, net ......................... 2 2 6 (342) 58 (39)
At end of year/period .......................... 7 1 5 3 7 3 4 3 1 3 9 2
The Company
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 4 5 9 6 4 4 13,703 11,224
Impairment losses, net ......................... 1 8 5 13,059 (2,479) 38
At end of year/period .......................... 6 4 4 13,703 11,224 11,262
21. FINANCIAL ASSETS/LIABILITIES AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group and The Company
Financial assets at fair value through profit or loss
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted investments, at fair value ................. 272,720 190,400 174,383 145,983
Financial liabilities at fair value through profit or loss
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Forward currency contracts, at fair value ............ — — 8 0 —
The above unlisted investments were structured deposits and certificate deposits issued by banks in Chinese Mainland. They
are classified and measured at fair value through profit or loss as they are not held within the business model with the objective to
collect contractual cashflows nor the business model with the objective of both collecting contractual cashflows and selling.
As at 31 December 2023 and 30 June 2024, certificate deposits of RMB50,000,000 and RMB40,000,000 were secured for the
Group’s bank loans respectively (note 26).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 458 ---
22. CONTRACT ASSETS
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Contract assets arising from:
Warranty retention receivables ................... 2 5 2 9 8 3 7 6 5 3 4
Less: Impairment of contract assets ................ 2 4 1 6 5 1 1 1 8
228 82 325 416
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Contract assets arising from:
Warranty retention receivables ................... 2 3 1 9 8 3 7 6 5 3 4
Less: Impairment of contract assets ................ 2 2 1 6 5 1 1 1 8
209 82 325 416
Contract assets are initially recognised for the revenue earned from sales of products and the receipt of retention
consideration is conditional on expiration of the warranty period. Upon expiration of the warranty period, the amounts recognised
as contract assets are reclassified to trade receivables.
The expected timing of recovery or settlement for all the contract assets at the end of reporting period is within one year.
The movements in the impairment of contract assets are as follows:
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 1 7 2 4 1 6 5 1
Impairment losses, net ......................... 7 ( 8 ) 3 5 6 7
At end of year/period .......................... 2 4 1 6 5 1 1 1 8
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ..................... 1 7 2 2 1 6 5 1
Impairment losses, net ......................... 5 ( 6 ) 3 5 6 7
At end of year/period .......................... 2 2 1 6 5 1 1 1 8
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 459 ---
23. CASH AND BANK BALANCES AND RESTRICTED BANK DEPOSITS
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ........................ 129,093 297,763 92,547 63,768
Time deposits ............................... 20,000 — 18,415 9,265
Restricted bank deposits* ...................... 8 2 1 9,189 2,210 821
149,914 306,952 113,172 73,854
Less:
Restricted bank deposits* ...................... (821) (9,189) (2,210) (821)
Cash and cash equivalents ...................... 149,093 297,763 110,962 73,033
Denominated in
R M B ..................................... 115,935 270,052 68,449 48,973
U S D ..................................... 33,973 36,894 39,879 21,126
J P Y...................................... — — 3,973 2,712
E U R ..................................... — — 8 6 5 1,037
I N R...................................... 6 6 6 6
149,914 306,952 113,172 73,854
The RMB is not freely convertible into other currencies, however, under Chinese Mainland’s Foreign Exchange Control
Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to
exchange RMB for other currencies through banks authorised to conduct foreign exchange business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying
periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the
respective short term time deposit rates. The bank balances and restricted bank balances are deposited with creditworthy banks with
no recent history of default.
* As at 31 December 2022, the restricted bank deposits of RMB4,776,000 were frozen due to the dispute between the
Group and a third party. The dispute was resolved subsequently and the restricted amount was unfrozen in 2023.
As at 31 December 2022 and 2023, the restricted bank deposits included RMB3,592,000 and RMB1,389,000,
respectively, used as performance deposits for certain sales contracts which will become unrestricted after the
completion of the contracts.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 460 ---
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ........................ 43,106 159,513 44,990 10,359
Time deposits ............................... 20,000 — 7,083 9,265
Restricted bank deposits ....................... — 3,592 1,389 —
63,106 163,105 53,462 19,624
Less:
Restricted bank deposits ........................ — (3,592) (1,389) —
Cash and cash equivalents ...................... 63,106 159,513 52,073 19,624
Denominated in
R M B ..................................... 29,127 126,595 27,628 11,493
U S D ..................................... 33,973 36,504 25,828 8,125
I N R...................................... 6 6 6 6
63,106 163,105 53,462 19,624
24. TRADE AND BILLS PA Y ABLES
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables .............................. 18,275 30,894 30,907 29,707
18,275 30,894 30,907 29,707
An ageing analysis of the trade payables as at the end of each of the Relevant Periods, based on the invoice date, is as follows:
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ............................... 18,080 30,685 30,907 29,216
Over 1 year ................................ 1 9 5 2 0 9 — 4 9 1
18,275 30,894 30,907 29,707
The trade payables are non-interest-bearing and are normally settled on terms of 1 to 3 months.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 461 ---
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables .............................. 20,283 62,224 45,610 61,958
Bills payable ............................... — — 50,000 40,000
20,283 62,224 95,610 101,958
An ageing analysis of the trade and bills payables as at the end of each of the Relevant Periods, based on the invoice date, is
as follows:
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ............................... 20,094 62,044 95,610 101,495
Over 1 year ................................ 1 8 9 1 8 0 — 4 6 3
20,283 62,224 95,610 101,958
25. OTHER PA Y ABLES AND ACCRUALS
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payable .............................. 19,106 24,523 25,314 17,433
Other tax payables ........................... 3,260 11,387 3,113 3,009
Payables for non-current assets* .................. 66,230 139,330 3,702 3,936
Other payables .............................. 5,580 8,128 9,663 14,913
94,176 183,368 41,792 39,291
* As at 31 December 2022, payables for non-current assets included a payable amount of RMB70,781,000 to the
Qingdao government for assets acquisition (note 34).
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payable .............................. 18,386 22,262 21,956 14,715
Other tax payables ........................... 2,462 10,066 2,641 1,171
Payables for property, plant and equipment .......... — 1 0 8 1 1 8 —
Other payables .............................. 4,883 7,519 9,020 16,602
25,731 39,955 33,735 32,488
Other payables are non-interest-bearing and have no fixed terms of settlement.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 462 ---
26. INTEREST-BEARING BANK LOANS
The Group
At 31 December As at 30 June
2021 2022 2023 2024
Effective
interest
rate Maturity
Effective
interest
rate Maturity
Effective
interest
rate Maturity
Effective
interest
rate Maturity
(%) RMB’000 (%) RMB’000 (%) RMB’000 (%) RMB’000
Current
Bank loans—secured* .... — — — — — 1.22-1.51 2024 49,803 1.40-2.21 2024 39,799
Bank loans—unsecured . . . — — 1.83 2023 21,619 1.83 2024 7,987 2.35-2.42 2025 29,434
— 21,619 57,790 69,233
Analysed into:
Bank loans repayable:
Within one year or on
d e m a n d ......... — 21,619 57,790 69,233
— 21,619 57,790 69,233
* As at 31 December 2023 and 30 June 2024, the certificate deposits of RMB50,000,000 and RMB40,000,000 were
secured for the Group’s bank loans respectively (note 21).
27. CONTRACT LIABILITIES
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Advances from customers
Sale of goods ............................... 27,076 35,578 10,939 10,561
Analysed for reporting purposes as:
Current liabilities ............................ 27,076 35,578 10,939 10,561
27,076 35,578 10,939 10,561
The Company
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Advances from customers
Sale of goods ............................... 23,732 32,292 10,672 9,267
Analysed for reporting purposes as:
Current liabilities ............................ 23,732 32,292 10,672 9,267
23,732 32,292 10,672 9,267
APPENDIX I ACCOUNTANTS’ REPORT
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28. DEFERRED INCOME
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Government grants* .......................... 158,993 143,465 189,569 177,814
At beginning of year/period ..................... 90,560 158,993 143,466 189,569
Grants received during the year/period ............. 78,810 6,710 72,700 480
Released to the statement of profit or loss
during the year/period ....................... (10,377) (22,237) (26,597) (12,235)
At end of year/period ......................... 158,993 143,466 189,569 177,814
* The Group’s deferred government grants represented government grants received for projects and are credited to the
statement of profit or loss on a straight-line basis over the expected lives of the related assets or recognised as income
on a systematic basis over the periods that the costs, for which they are intended to compensate, are expensed.
The Company
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Government grants* .......................... 4,766 4,463 9,442 7,004
At beginning of year/period ..................... 6 1 3 4,766 4,463 9,442
Grants received during the year/period .............. 12,060 6,710 9,450 480
Released to the statement of profit or loss
during the year/period ....................... (7,907) (7,013) (4,471) (2,918)
At end of year/period ......................... 4,766 4,463 9,442 7,004
29. PROVISION
The Group and The Company
Warranties
RMB’000
At 1 January 2021 ........................................................... 2 0 2
Additional provision ......................................................... 3,943
Amounts utilised during the year ................................................. (655)
At 31 December 2021 and 1 January 2022 .......................................... 3,490
At 1 January 2022 ........................................................... 3,490
Additional provision ......................................................... 4,864
Amounts utilised during the year ................................................. (1,796)
At 31 December 2022 and 1 January 2023 .......................................... 6,558
At 31 December 2022 ........................................................ 6,558
Additional provision ......................................................... 2,798
Amounts utilised during the year ................................................. (3,229)
At 31 December 2023 ........................................................ 6,127
At 1 January 2024 ........................................................... 6,127
Additional provision .......................................................... 3 8 2
Amounts utilised during the period ................................................ (1,526)
At 30 June 2024 ............................................................. 4,983
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 464 ---
The Group generally provides warranties of 12 to 18 months to its customers on certain of its products for general repairs of
defects occurring during the warranty period. The amount of the provision for the warranties is estimated based on sales volumes
and past experience of the level of repairs and returns. The estimation basis is reviewed on an ongoing basis and revised where
appropriate.
30. SHARE CAPITAL/PAID-IN CAPITAL
Share capital
A summary of movements in the share capital is as follows:
Number of
shares in issue Share capital
(in thousand) RMB’000
As at 1 January 2022 ........................................... — —
Issue of ordinary shares upon conversion into a joint stock company of
RMB1 each* ............................................... 360,000 360,000
As at 31 December 2022 and 2023 and 30 June 2024 ..................... 360,000 360,000
Paid-in capital
RMB’000
As at 1 January 2021 ........................................................ 7,850
Capital contribution by shareholders* ............................................. 1,688
As at 31 December 2021 ..................................................... 9,538
Capital contribution by shareholders** ............................................ 5 1 6
Conversion into a joint stock company*** ......................................... (10,054)
As at 31 December 2022 ...................................................... —
* During the year ended 31 December 2021, the Company received capital contributions of RMB309,137,000 from
fifteen investors. The capital contributions increased the paid-in capital and capital reserve by RMB1,688,000 and
RMB307,449,000, respectively.
** During the year ended 31 December 2022, the Company received capital contributions of RMB183,527,000 from four
investors. The capital contributions increased the paid-in capital and capital reserve by RMB516,000 and
RMB183,011,000, respectively.
*** In December 2022, the Company converted into a joint stock company with limited liability under the Company Law
of the PRC. The net assets of the Company as of the conversion base date, including the paid-in capital, capital
reserves and accumulated losses, amounting to RMB530,410,000 were converted into 360,000,000 ordinary shares of
RMB1.00 each. The excess of the net assets converted over the nominal value of the ordinary shares was credited to the
Company’s capital reserve.
APPENDIX I ACCOUNTANTS’ REPORT
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31. RESERVES
The Group
The amounts of the Group’s reserves and the movements therein for the Relevant Periods are presented in the consolidated
statements of changes in equity.
(i) Capital reserve
The capital reserve of the Group represents the difference between the value of the paid-up capital and the consideration
received, as well as the reserves resulting from transactions with non-controlling interests.
(ii) Share-based payment reserve
The share-based payment reserve of the Group represents the share-based compensation reserve due to equity-settled
share-based payment transactions, details of which were set out in note 32 to the Historical Financial Information.
The Company
The amounts of the Company’s reserves and the movements therein for the Relevant Periods are presented as follows:
Capital
reserve
Share-based
payment
reserve*
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2021 ..................... 190,521 43,299 (150,833) 82,987
Loss for the year ...................... — — (20,836) (20,836)
Total comprehensive loss for the year ....... — — (20,836) (20,836)
Issue of shares ....................... 301,034 — — 301,034
Share-based payments ................... — (1,285) — (1,285)
At 31 December 2021 .................. 491,555 42,014 (171,669) 361,900
At 1 January 2022 ..................... 491,555 42,014 (171,669) 361,900
Loss for the year ...................... — — (76,312) (76,312)
Total comprehensive loss for the year ....... — — (76,312) (76,312)
Issue of shares ....................... 178,765 — — 178,765
Conversion into a joint stock company ....... (565,867) — 215,921 (349,946)
Share-based payments .................. — 12,579 — 12,579
At 31 December 2022 .................. 104,453 54,593 (32,060) 126,986
At 1 January 2023 ..................... 104,453 54,593 (32,060) 126,986
Loss for the year ...................... — — (75,701) (75,701)
Total comprehensive loss for the year ....... — — (75,701) (75,701)
Share-based payments .................. — 21,464 — 21,464
At 31 December 2023 .................. 104,453 76,057 (107,761) 72,749
At 1 January 2024 ..................... 104,453 76,057 (107,761) 72,749
Loss for the period ..................... — — (46,310) (46,310)
Total comprehensive loss for the period ...... — — (46,310) (46,310)
Share-based payments ................... — 13,665 — 13,665
As at 30 June 2024 ..................... 104,453 89,722 (154,071) 40,104
32. SHARE-BASED PA YMENTS
Share Award Scheme
The Group approved and adopted the share award scheme (the “ Share Award Scheme ”) for certain employees of the Group
(“Share Incentive Participants ”) in order to recognise the contributions of the Share Incentive Participants to the growth and
development of the Group, and incentivise them to further promote the development of the Group.
APPENDIX I ACCOUNTANTS’ REPORT
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In order to implement the Share Award Scheme, Shenzhen Yuejiang Consultation Partnership (Limited Partnership)
(“Yuejiang LP ”), Shenzhen Qimo Investment Partnership (Limited Partnership) (“ Qimo LP ”), Shenzhen Chumo Consulting
Partnership (Limited Partnership) (“ Chumo LP ”) and Shenzhen Lumo Consulting Partnership (Limited partnership) (“ Lumo LP ”)
were established and designated as share incentive platforms to hold the shares specially awarded to the eligible participants as the
ultimate beneficial owners. The Group has no control over the share incentive platforms.
On 31 December 2018, the Group granted 768,672 (equal to 27,525,106 shares after conversion into a joint stock company)
restricted share units (“ RSUs ”) of the Company to 12 eligible employees at a subscribed price of RMB1.00. On 31 January 2022,
the Group granted 144,937 (equal to 5,190,002 shares after conversion into a joint stock company) restricted share units of the
Company to 49 eligible employees at a subscribed price of RMB52.42. On 1 June 2023, the Group granted 12,345,000 restricted
share units of the Company to 83 eligible employees at a subscribed price of RMB1.39. On 31 December 2023, the Group granted
1,866,400 restricted share units of the Company to 16 eligible employees at a subscribed price of RMB1.39.
All of the RSUs granted to the Share Incentive Participants shall be subject to both a listing-based condition (the “ IPO
Condition ”) as well as service conditions. The IPO Condition would be satisfied when the ordinary shares of the Company are
successfully listed on a recognised stock exchange.
The fair values of the RSUs granted on 31 December 2018, 31 January 2022, 1 June 2023 and 31 December 2023 were
estimated at RMB2.99, RMB5.93, RMB7.01 and RMB7.55 per share after conversion into a joint stock company, respectively, by an
independent professionally qualified valuer.
The fair values of the RSUs granted were estimated as at the grant date by using discounted cash flow method and hybrid
method, as well as equity allocation based on option pricing model, taking into account the terms and conditions upon which the
RSUs were granted. The following table lists the significant inputs to the fair value model used:
31 December
2018
31 January
2022
1 June
2023
31 December
2023
Risk-free interest rate (%) ................ 2.96 2.30 2.29 2.17
V olatility (%) ......................... 41.17 39.64 40.30 31.32
The movements of the outstanding RSUs granted under the Share Award Scheme during the Relevant Periods were as
follows:
Number of
shares
At 1 January 2021 ........................................................... 683,582
Forfeited during the year ....................................................... (279,770)
At 31 December 2021 ......................................................... 403,812
At 1 January 2022 ........................................................... 403,812
Granted during the year ........................................................ 144,937
Forfeited during the year ....................................................... (37,973)
Vested during the year ........................................................ (72,391)
At 31 December 2022 ......................................................... 438,385
After conversion into a joint stock company ......................................... 15,697,970
At 1 January 2023 ........................................................... 15,697,970
Granted during the year ........................................................ 14,211,400
Forfeited during the year ....................................................... (884,314)
Vested during the year ........................................................ (199,546)
At 31 December 2023 ......................................................... 28,825,510
At 1 January 2024 ........................................................... 28,825,510
Forfeited during the period ..................................................... (803,785)
At 30 June 2024 ............................................................. 28,021,725
APPENDIX I ACCOUNTANTS’ REPORT
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The aforesaid transactions have been accounted for as share-based payment transactions. During the years ended 31
December 2021, 2022, 2023 and the six months ended 30 June 2023 and 2024, the Group recognised share award credit of
RMB1,697,000 and expense of RMB12,107,000, RMB20,712,000, RMB5,447,000 and RMB13,432,000, respectively.
Share Option Scheme
The Group approved a share option scheme (the “ Share Option Scheme ”) in 2018. Pursuant to the Share Option Scheme, the
Group proposed to grant 1.58% of the share options in the original equity structure to the Company through Qimo Investment, one
of the share incentive platforms. 40%, 30% and 30% of the share options will be vested when the vesting condition is met over the
three years. The vesting of share options is also subject to the IPO Condition. The IPO Condition would be satisfied when the
ordinary shares of the Company are successfully listed on a recognised stock exchange.
On 31 December 2018, the Group granted 114,378 (equal to 4,096,000 shares after conversion into a joint stock company)
share options which will vest in instalments over the next three years. The exercise price is RMB8.74 per share.
The fair value of share options granted was estimated at RMB98.77 per share option at the grant date using the Black-Scholes
model. The following table lists the key inputs to the model used:
31 December
2018
Risk-free interest rate (%) ...................................................... 2.58-2.91
V olatility (%) ............................................................... 33.93-37.10
The share options granted and outstanding during the Relevant Periods are as follows:
Number of
shares
At 1 January 2021 ........................................................... 56,465
Forfeited during the year ....................................................... (6,660)
At 31 December 2021 ......................................................... 49,805
At 1 January 2022 ........................................................... 49,805
Forfeited during the year ....................................................... (7,094)
At 31 December 2022 ......................................................... 42,711
After conversion into a joint stock company ......................................... 1,529,415
At 1 January 2023 ........................................................... 1,529,415
Forfeited during the year ....................................................... —
At 31 December 2023 and 30 June 2024 ............................................ 1,529,415
The aforesaid transactions have been accounted for as share-based payment transactions. During the years ended 31
December 2021, 2022, 2023 and the six months ended 30 June 2023 and 2024, the Group recognised share award expenses of
RMB412,000, RMB472,000, RMB752,000, RMB398,000 and RMB233,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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33. DISPOSAL OF A SUBSIDIARY
In July 2021, the Group disposed of 90% equity interests in Wuhan Yuejiang Zhidao Technology Co., LTD. to independent
third parties, at a cash consideration of RMB1,000,000. The transaction was completed on 21 July 2021.
2021
RMB’000
Net assets disposed of:
Cash and bank balances ..................................................... 1,251
Trade receivables .......................................................... 2 1 3
Prepayments and other receivables .............................................. 1 6 3
Inventories .............................................................. 1 4 3
Property, plant and equipment ................................................. 1 3 0
Trade payables ............................................................ (374)
Accruals and other payables .................................................. (306)
Non-controlling interests ..................................................... (57)
Subtotal .................................................................. 1,163
Loss on disposal of a subsidiary .................................................. (163)
Total consideration .......................................................... 1,000
Satisfied by:
Cash .................................................................... 1,000
An analysis of the net inflow of cash and cash equivalents in respect of the disposal of a subsidiary is as follows:
2021
RMB’000
Cash consideration .......................................................... 1,000
Cash and bank balances disposed of ............................................... (1,251)
Net outflow of cash and cash equivalents in respect of the disposal of a subsidiary .............. (251)
34. ASSETS ACQUISITION
In 2020, the Group signed a cooperation agreement with Qingdao government, pursuant to which the government will
incorporate an entity named Qingdao Yuejiang Robotics Co., Ltd. (“Yuejiang Robotics”), used as a platform to acquire the land use
right and build a factory in Qingdao according to the Group’s plan. After completion of the construction the land and the building
will be delivered to the Group for use and the Group is committed to acquiring the equity interests in Yuejiang Robotics which holds
the assets.
In April 2022, the construction was completed and the assets were delivered to the Group. In December 2022, the Group and
the Qingdao government signed an agreement to acquire 100% equity interests in Yuejiang Robotics with reference to the fair value
of the assets. The transfer of the equity interests in Yuejiang Robotics was completed in June 2023.
The commercial substance of the transaction is to acquire the land use right and the building and the purchase obligation as
stipulated in the agreement is non-cancellable. Therefore, when the government transfers the completed building and land use right
to the Group, the Group obtains control of the assets. The subsequent agreement to acquire equity interests in Yuejiang Robotics is
a payment arrangement between the parties for the purchase of the assets.
As at 31 December 2022, the Group recognized property, plant and equipment of RMB60,332,000, right-of-use assets of
RMB9,529,000 and the other payables of RMB70,781,000. In June 2023 when the transfer of the equity interests in Yuejiang
Robotics was completed, the Group recognised the working capital of Yuejiang Robotics and settled the other payables with the
amount of RMB71,540,000.
APPENDIX I ACCOUNTANTS’ REPORT
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35. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2021, 2022, 2023 and the six months ended 30 June 2023 and 2024, the Group had
non-cash additions to right-of-use assets and lease liabilities of RMB6,574,000, RMB7,125,000, RMB6,013,000, RMB4,813,000
and RMB5,062,000, respectively, in respect of lease arrangements for factory, office and laboratory premises.
During the year ended 31 December 2023, the Group had offset the payables for property, plant and equipment with the
deferred income in the amount of RMB63,250,000, based on agreements with government authorities.
(b) Changes in liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in
the Group’s consolidated statement of cash flows as cash flows from financing activities.
Interest
bearing bank
borrowings
Lease
liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 ................................... 23,045 5,824 28,869
Changes from financing cash flow ........................ (23,414) (4,296) (27,710)
Changes from non-financing cash flow .................... — 6,574 6,574
Accretion of interest ................................. 3 6 9 2 8 9 6 5 8
At 31 December 2021 and 1 January 2022 .................. — 8,391 8,391
Changes from financing cash flow ........................ 21,613 (5,208) 16,405
Changes from non-financing cash flow .................... — 7,125 7,125
Accretion of interest ................................. 6 4 4 0 4 4 6
At 31 December 2022 and 1 January 2023 .................. 21,619 10,748 32,367
Changes from financing cash flow ........................ 35,531 (6,536) 28,995
Changes from non-financing cash flow .................... — 4,736 4,736
Accretion of interest ................................. 6 4 0 4 5 9 1,099
At 31 December 2023 and 1 January 2024 ................... 57,790 9,407 67,197
At 31 December 2023 and 1 January 2024 .................. 57,790 9,407 67,197
Changes from financing cash flow ........................ 10,902 (3,086) 7,816
Changes from non-financing cash flow ..................... — 2,765 2,765
Accretion of interest .................................. 5 4 1 1 6 1 7 0 2
At 30 June 2024 ..................................... 69,233 9,247 78,480
At 31 December 2022 and 1 January 2023 .................. 21,619 10,748 32,367
Changes from financing cash flow ........................ 7,810 (3,660) 4,150
Changes from non-financing cash flow ..................... — 3,629 3,629
Accretion of interest .................................. 3 0 3 2 5 0 5 5 3
At 30 June 2023 (Unaudited) ............................ 29,732 10,967 40,699
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Total cash outflow for leases
The total cash outflow for leases included in the consolidated statements of cash flows is as follows:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Within operating activities .......... 1,334 596 1,092 400 514
Within financing activities ........... 4,296 5,208 6,536 3,660 3,086
5,630 5,804 7,628 4,060 3,600
36. PLEDGE OF ASSETS
Details of the Group’s restricted bank deposits and pledged certificate deposits are included in note 23 and note 21 to the
Historical Financial Information.
37. COMMITMENTS
The Group had the following capital commitments at the end of each of the Relevant Periods.
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Purchase of items of property, plant and equipment ..... 26,017 — 1,624 2,565
The Group had the following short-term lease commitments at the end of each of the Relevant Periods. The future lease
payments for these non-cancellable lease contracts are falling due as follows:
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Within one year .............................. 1 3 3 9 9 4 3 8 1 8 3
APPENDIX I ACCOUNTANTS’ REPORT
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38. RELATED PARTY TRANSACTIONS
The Directors are of the view that the following companies are related parties that have material transactions or balances with
the Group during the Relevant Periods and six months ended 30 June 2023.
(a) Name and relationships of the related parties:
Name Relationship
Mr. Liu Peichao The substantial shareholder
Mr. Lang Xulin Director
Mr. Wu Zhiwen Director
Mr. Xiang Guanglong Director
Zhejiang Tiexi intelligent technology Co., LTD
(“ʮ̡ ”)
Associate of the Group
REGAL ALLIED INTERNATIONAL
LIMITED (“ʮ̡ ”)
Other entities controlled or jointly controlled by the Company’s
director (Ms. Cai Wenjuan)
(b) The Group had the following transactions with related parties during the Relevant Periods and six months ended 30
June 2023:
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Sales of products to:
Zhejiang Tiexi Intelligent Technology Co.,
L T D ............................ 1 0 3 ————
REGAL ALLIED INTERNATIONAL
LIMITED ......................... 8 3 8 ————
Loans borrowed from Mr. Liu Peichao* ...... 2,412 ————
Loans borrowed from Mr. Lang Xulin* ...... 1,126 ————
Loans borrowed from Mr. Wu Zhiwen* ...... 8 2 6 ————
Interest expenses for loans from Mr. Liu
Peichao (note 6) ..................... 1 0 3 ————
Interest expenses for loans from Mr. Lang
Xulin (note 6) ...................... 3 ————
Interest expenses for loans from Mr. Wu
Zhiwen (note 6) ..................... 3 ————
* The loans from Mr. Liu Peichao, Mr. Lang Xulin and Mr. Wu Zhiwen were unsecured and non-trade in nature
with an interest rate of 4.75% p.a. and were repaid in 2021.
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Outstanding balances with related parties:
The Group
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due from a related party:
Mr. Xiang Guanglong* .................... — — 1 4 —
Zhejiang Tiexi Intelligent Technology Co., LTD.** 43 37 — —
43 37 14 —
Amounts due to related parties:
Mr. Liu Peichao*** ....................... 1 0 2 — — —
Mr. Lang Xulin*** ....................... 3 — — —
Mr. Wu Zhiwen*** ....................... 3 — — —
108 — — —
* Non-trade in nature, included in “Prepayments, deposits and other receivables” in the consolidated statement of
financial position
** Trade in nature, included in “Trade and bills receivables” in the consolidated statement of financial position
*** Non-trade in nature, included in “Other payables and accruals” in the consolidated statement of financial
position
The Group has assessed the expected loss rate for amounts due from related parties by considering the financial
position and credit history of these related parties and assessed that the expected credit loss is minimal.
(d) Compensation of key management personnel of the Group
Y ear ended 31 December
Six months ended
30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, bonuses, allowances and
benefits in kind ..................... 2,146 3,036 3,405 1,695 1,708
Pension scheme contributions ............ 2 4 4 3 5 9 2 9 3 2
Equity-settled share-based payment expenses . (5,441) 2,232 3,539 547 2,979
(3,271) 5,311 7,003 2,271 4,719
Further details of directors’ and the chief executive’s remuneration are included in note 8 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
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39. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant Periods were as
follows:
The Group
As at 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at fair value through profit or loss:
Structured deposits and certificates of deposit ........ 272,720 190,400 174,383 145,983
Financial assets at amortised cost:
Trade and bills receivables ...................... 16,438 40,436 41,608 33,040
Financial assets included in other receivables and other
assets ................................... 5,752 3,470 3,632 3,551
Restricted bank deposits ........................ 8 2 1 9,189 2,210 821
Cash and cash equivalents ....................... 149,093 297,763 110,962 73,033
172,104 350,858 158,412 110,445
Financial liabilities
Financial liabilities at fair value through profit or loss:
Derivative financial instruments .................. — — 8 0 —
Financial liabilities at amortised cost:
Trade and bills payables ....................... 18,275 30,894 30,907 29,707
Financial liabilities included in other payables and
accruals ................................. 71,810 147,458 13,365 18,849
Lease liabilities ............................. 8,391 10,747 9,407 9,247
Interest-bearing bank loans ...................... — 21,619 57,790 69,233
98,476 210,718 111,469 127,036
The Company
Y ear ended 31 December
As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at fair value through profit or loss:
Structured deposits and Certificates of deposit ........ 222,720 190,400 174,383 145,983
Financial assets at amortised cost:
Trade and bills receivables ...................... 23,150 165,118 139,709 114,898
Financial assets included in other receivables and other
assets ................................... 15,302 3,215 87,906 137,147
Restricted bank deposits ........................ — 3,592 1,389 —
Cash and cash equivalents ....................... 63,106 159,513 52,073 19,624
101,558 331,438 281,077 271,669
Financial liabilities
Financial liabilities at fair value through profit or loss:
Derivative financial instruments .................. — — 8 0 —
Financial liabilities at amortised cost:
Trade and bills payables ....................... 20,283 62,224 95,610 101,958
Financial liabilities included in other payables and
accruals ................................. 4,883 7,627 9,138 16,602
Lease liabilities ............................. 7,547 8,291 5,746 6,197
32,713 78,142 110,494 124,757
APPENDIX I ACCOUNTANTS’ REPORT
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40. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
All the carrying amounts of the Group’s financial instruments approximate to their fair values due to the short-term
maturities of these instruments.
The Group’s finance department is responsible for determining the policies and procedures for the fair value measurement of
financial instruments. At the end of each of the Relevant Periods, the finance department analysed the movements in the values of
financial instruments and determined the major inputs applied in the valuation. The valuation is reviewed and approved by the
finance manager. The valuation process and results are discussed with the directors of the Company once a year for annual financial
reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
The fair values of the financial assets and financial liabilities at fair value through profit or loss have been calculated by
discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and
remaining maturities.
Fair value hierarchy
Financial assets:
As at 31 December 2021
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits and certificates of deposits . — 272,720 — 272,720
As at 31 December 2022
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits and certificates of deposits . — 190,400 — 190,400
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 475 ---
As at 31 December 2023
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits and Certificate Deposits . . . — 174,383 — 174,383
As at 30 June 2024
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits and Certificate Deposits . . . — 145,983 — 145,983
Financial liabilities:
As at 31 December 2023
Fair value measurement using
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Forward currency contracts ............... — 8 0 — 8 0
41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank and other borrowings, financial assets at fair
value through profit or loss and cash and short term deposits. The main purpose of these financial instruments is to raise finance for
the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables,
which arise directly from its operations.
The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk and liquidity risk. The
board of directors reviews and agrees policies for managing each of these risks and they are summarised below.
Foreign currency risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange
rates between RMB and other currencies in which the Group conducts business may affect the Group’s financial condition and
results of operations.
APPENDIX I ACCOUNTANTS’ REPORT
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The following table demonstrates the sensitivity at the end of each of the Relevant Periods to a reasonably possible change in
foreign currency exchange rates, with all other variables held constant, of the Group’s loss before tax (due to changes in the fair
value of monetary assets and liabilities) and the Group’s equity.
Increase/
(decrease) in
basis points
Increase/
(decrease) in
profit before
tax
(Decrease)/
increase in
equity
% RMB’000 RMB’000
Year ended 31 December 2021
If RMB weakens against the US$ ........................ 5 1,435 1,435
If RMB strengthens against the US$ ...................... 5 (1,435) (1,435)
Year ended 31 December 2022
If RMB weakens against the US$ ........................ 5 2,367 2,367
If RMB strengthens against the US$ ...................... 5 (2,367) (2,367)
Year ended 31 December 2023
If RMB weakens against the US$ ........................ 5 3,357 3,357
If RMB strengthens against the US$ ...................... 5 (3,357) (3,357)
Six months ended 30 June 2024
If RMB weakens against the US$ ......................... 5 1,865 1,865
If RMB strengthens against the US$ ....................... 5 (1,865) (1,865)
Credit risk
The Group trades only with recognised and creditworthy parties. It is the Group’s policy that all customers who wish to trade
on credit terms are subject to credit verification procedures. Receivable balances are monitored on an ongoing basis and the Group’s
exposure to bad debts is not significant. The credit risk of the Group’s other financial assets, which comprise cash and cash
equivalents and financial assets included in prepayments, other receivables and other assets, arises from default of the counterparty,
with a maximum exposure equal to the carrying amounts of these instruments.
For other receivables and other assets, management makes periodic collective assessment as well as individual assessment on
the recoverability of other receivables based on historical settlement records and past experience. The Directors believe that there
is no material credit risk inherent in the Group’s outstanding balance of other receivables.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit policy, which
is mainly based on past due information unless other information is available without undue cost or effort, and year-end staging
classification as at the end of each of the Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2021
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* ............ — — — 25,785 25,785
Financial assets included in other receivables
and other assets ................... 6,467 — — — 6,467
Restricted bank balances ............... 8 2 1 — — — 8 2 1
Cash and cash equivalents .............. 149,093 — — — 149,093
156,381 — — 25,785 182,166
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December 2022
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* ............ — — — 50,716 50,716
Financial assets included in other receivables
and other assets ................... 3,843 — — — 3,843
Restricted bank balances ............... 9,189 — — — 9,189
Cash and cash equivalents .............. 297,763 — — — 297,763
310,795 — — 50,716 361,511
As at 31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* ........... — — — 48,484 48,484
Financial assets included in other
receivables and other assets .......... 4,063 — — — 4,063
Restricted bank balances .............. 2,210 — — — 2,210
Cash and cash equivalents ............. 110,962 — — — 110,962
117,235 — — 48,484 165,719
As at 30 June 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* ............ — — — 38,767 38,767
Financial assets included in other
receivables and other assets .......... 3,943 — — — 3,943
Restricted bank balances .............. 8 2 1 — — — 8 2 1
Cash and cash equivalents ............. 73,033 — — — 73,033
77,797 — — 38,767 116,564
* The credit quality of the financial assets included in prepayments, other receivables and other assets is considered to
be “normal” when they are not past due and there is no information indicating that the financial assets had a significant
increase in credit risk since initial recognition.
At the end of each of the Relevant Periods, the Group had no significant concentrations of credit risk which are disclosed in
note 19 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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Liquidity risk
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity
of both its financial instruments and financial assets (e.g., trade receivables) and projected cash flows from operations. The maturity
profile of the Group’s financial liabilities as at the end of each of the Relevant Periods, based on the contractual undiscounted
payments, is as follows:
As at 31 December 2021
Less than
12 months or
on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............................... 18,275 — 18,275
Financial liabilities included in other payables and accruals ...... 71,810 — 71,810
Lease liabilities .................................... 5,147 12,341 17,488
95,232 12,341 107,573
As at 31 December 2022
Less than
12 months or
on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............................... 30,894 — 30,894
Financial liabilities included in other payables and accruals ...... 147,458 — 147,458
Lease liabilities .................................... 5,588 7,438 13,026
Interest-bearing bank loans ............................. 21,625 — 21,625
205,565 7,438 213,003
As at 31 December 2023
Less than
12 months or
on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............................... 30,907 — 30,907
Financial liabilities included in other payables and accruals ...... 13,365 — 13,365
Lease liabilities .................................... 10,715 3,473 14,188
Interest-bearing bank loans ............................. 58,430 — 58,430
113,417 3,473 116,890
As at 30 June 2024
Less than
12 months or
on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............................... 29,707 — 29,707
Financial liabilities included in other payables and accruals ...... 18,849 — 18,849
Lease liabilities ..................................... 7,935 4,056 11,991
Interest-bearing bank loans ............................. 69,924 — 69,924
126,415 4,056 130,471
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 479 ---
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern
and to maintain healthy capital ratios in order to support its business and maximise shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk
characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. The Group is not subject to any externally imposed capital
requirements. No changes were made in the objectives, policies or processes for managing capital during the Relevant Periods.
The asset-liability ratios as at the end of each of the Relevant Periods are as follows:
As at 31 December As at
30 June
20242021 2022 2023
RMB’000 RMB’000 RMB’000 RMB’000
Total assets ................................ 665,085 925,420 734,888 669,143
Total liabilities .............................. 349,434 470,386 361,585 342,211
Asset-liability ratio ........................... 5 3 % 5 1 % 4 9 % 5 1 %
* The asset-liability ratio is calculated by dividing total liabilities by total assets.
42. EVENTS AFTER THE RELEV ANT PERIODS
No significant events have occurred in respect of any period subsequent to 30 June 2024.
43. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of its subsidiaries in respect of any
period subsequent to 30 June 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 480 ---
The following information does not form part of the Accountants’ Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as set out in Appendix
I to this prospectus, and is included herein for information purposes only. The unaudited pro forma
financial information should be read in conjunction with the “Financial Information” section in this
prospectus and the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group prepared in accordance with Rule 4.29 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited and with reference to Accounting Guideline 7 “ Preparation of
Pro F orma Financial Information for inclusion in Investment Circulars ” issued by the Hong Kong
Institute of Certified Public Accountants is to illustrate the effect of the Global Offering on the
consolidated net tangible assets of the Group attributable to owners of the Company as at 30 June 2024 as
if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group has
been prepared for illustrative purposes only and because of its hypothetical nature, it may not provide a
true picture of the consolidated net tangible assets of the Group had the Global Offering been completed
as at 30 June 2024 or at any future date.
Consolidated
net tangible
assets
attributable
to owners of
the Company
as at
30 June 2024
Estimated
net proceeds
from the
Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets
attributable
to owners of
the Company
as at
30 June 2024
Unaudited pro forma
adjusted consolidated net
tangible assets attributable to
owners of the Company per
Share as at
30 June 2024
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Notes 2, 4) (Note 3) (Note 4)
Based on an Offer Price of
HK$18.80 per Share ....... 323,948 641,731 965,679 2.41 2.60
Based on an Offer Price of
HK$19.80 per Share ....... 323,948 677,073 1,001,021 2.50 2.70
Based on an Offer Price of
HK$20.80 per Share ....... 323,948 712,415 1,036,363 2.59 2.80
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 481 ---
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the Company as at 30 June 2024 were equal
to the audited net assets attributable to owners of the Company as at 30 June 2024 of RMB326,932,000 after deducting
of intangible assets of RMB2,984,000 as of 30 June 2024 set out in the Accountants’ Report in Appendix I in this
prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$18.80, HK$19.80 or
HK$20.80 per Share, after the deduction of the underwriting fees and other related expenses payable by the Company
(excluding the listing expenses that have been charged to profit or loss during the Track Record Period) and do not take
into account any shares which may be issued upon exercise of the Over-allotment Option.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company per Share is
arrived at after adjustments referred to in the preceding paragraphs and on the basis that 400,000,000 Shares are in
issue assuming the Global Offering have been completed on 30 June 2024 but takes no account of any Shares which
may be allotted and issued pursuant to the exercise of the Over-allotment Option or any Shares which may be issued or
repurchased by the Company.
(4) For the purpose of this unaudited pro forma adjusted consolidated net tangible assets, the estimated net proceeds from
the Global Offering are converted from Hong Kong dollars into Renminbi (“ RMB”) at an exchange rate of HK$1.00 to
RMB0.92526 and the unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the
Company per Share is converted from RMB into Hong Kong dollars at the same exchange rate. No representation is
made that RMB amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that
rate.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into subsequent
to 30 June 2024.
(6) No dividend was paid or declared by the Company subsequent to 30 June 2024 and up to the Latest Practicable Date.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 482 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from our reporting accountants, Ernst & Young,
Certified Public Accountants, Hong Kong, prepared for the purpose of incorporation in this prospectus,
in respect of the pro forma financial information of the Group.
۱
ਸ਼छଳ
垹
㶣
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong

To the Directors of SHENZHEN DOBOT CORP LTD
We have completed our assurance engagement to report on the compilation of pro forma financial
information of SHENZHEN DOBOT CORP LTD (the “ Company ”) and its subsidiaries (hereinafter
collectively referred to as the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative
purposes only. The pro forma financial information consists of the pro forma consolidated net tangible
assets as at 30 June 2024, and related notes as set out on page II-1 and II-2 of the prospectus dated 13
December 2024 issued by the Company (the “ Pro Forma Financial Information ”). The applicable
criteria on the basis of which the Directors have compiled the Pro Forma Financial Information are
described in Appendix II(A) to the prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of
the global offering of shares of the Company on the Group’s financial position as at 30 June 2024 as if the
transaction had taken place at 30 June 2024. As part of this process, information about the Group’s
financial position has been extracted by the Directors from the Group’s financial statements for the six
months ended 30 June 2024, on which an accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline (“ AG”) 7 Preparation of
Pro F orma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong Institute
of Certified Public Accountants (the “ HKICPA ”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of Ethics for
Professional Accountants issued by the HKICPA, which is founded on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 483 ---
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for Firms
that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements which requires the firm to design, implement and operate a system of quality management
including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on
the 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 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 F orma Financial Information Included
in a Prospectus issued by the HKICPA. This standard requires that the reporting accountants plan and
perform procedures to obtain reasonable assurance about whether the Directors have compiled the Pro
Forma Financial Information in accordance with paragraph 4.29 of the Listing 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 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 Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely to illustrate
the impact of the global offering of shares of the Company on unadjusted financial information of the
Group as if the transaction had been undertaken at an earlier date selected for purposes of the illustration.
Accordingly, we do not provide any assurance that the actual outcome of the transaction would have been
as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial Information has
been properly compiled on the basis of the applicable criteria involves performing procedures to assess
whether the applicable criteria used by the Directors in the compilation of the Pro Forma Financial
Information provide a reasonable basis for presenting the significant effects directly attributable to the
transaction, and to obtain sufficient appropriate evidence about whether:
• the related pro forma adjustments give appropriate effect to those criteria; and
• the Pro Forma Financial Information reflects the proper application of those adjustments to the
unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 484 ---
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which the
Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial Information as
disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Certified Public Accountants
Hong Kong
13 December 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 485 ---
This appendix contains a summary of the main provision of the Articles of Association of the
Company adopted on May 31, 2024, which will take effect from the date of the Listing of H Shares on the
Hong Kong Stock Exchange. The main purpose of this appendix is to provide potential investors with an
overview of the Articles of Association of the Company, so it may not contain all the information that is
important to potential investors.
SHARES AND REGISTERED CAPITAL
The Company shall issue shares under the principles of openness, fairness and equality and shares of
the same class shall carry the equal rights.
Shares of the same class issued at the same time shall be issued under the same condition and at the
same price; each share subscribed by any entity or individual shall be paid for at the same price.
INCREASE AND REDUCTION OF CAPITAL AND REPURCHASE OF SHARES
Increase of Capital
The Company may, based on its operating and development needs, can increase its capital in the
following ways pursuant to the requirements of laws and regulations and upon the resolutions separately
passed at the general meeting:
1. by public offering of shares;
2. by non-public offering of shares;
3. by allotting bonus shares to its existing shareholders;
4. by converting common reserve fund into share capital;
5. by any other means which is stipulated by law and administrative regulations and approved by
the CSRC.
Reduction of Capital
The Company may reduce its registered capital. The Company reduce its registered capital in
accordance with the Company Law and other relevant regulations as well as the procedures stipulated in
the Articles of Association.
Repurchase of Shares
Under any of the following circumstances, a company may purchase its shares in accordance with
laws, administrative regulations, departmental rules, and the Articles of Association:
1. to reduce its capital;
2. to merge with another company that holds the shares;
3. to utilize shares in the employee stock ownership plan or for share incentive;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-1 –


--- page 486 ---
4. shareholder requests the Company to purchase its shares due to an objection to the resolution
on merger or division made by the general meeting;
5. to use the shares in the conversion of the convertible corporate bonds issued by the Company;
6. necessary for the Company to protect its value and the shareholders’ equity.
Except in the above circumstances, the Company shall not purchase the shares of the Company.
Where the Company repurchases its shares under the circumstances set out in items (1) and (2) of
the preceding paragraph, it shall be subject to the resolution of the general meeting; where the Company
repurchases its shares under the circumstances set out in items (3), (5) and (6) of the preceding paragraph,
it shall be subject to the resolution of the Board meeting attended by more than two-thirds (2/3) of the
directors.
After the shares repurchased by the Company in accordance with the preceding paragraph, if it
under the circumstance in item (1), such shares shall be canceled in ten days after the date of repurchase;
for the circumstance in item (2) or (4), such shares shall be transferred or canceled in six months; for the
circumstance in item (3), (5) or (6), the total number of shares held by the Company shall not exceed 10%
of the total issued shares of the Company, and such shares shall be transferred or canceled in three years.
Transfer of Shares
The Company does not accept its own shares as the subject of the pledge.
Shares issued by the Company prior to its public offering shall not be transferred within one (1) year
as of the date on which the shares are listed and traded in the stock exchange. Where there are other
provisions in laws, administrative regulations. or the securities regulatory authority under the State
Council regarding the transfer of shares held by shareholders and actual controllers of listed companies,
such provisions shall prevail.
The directors, supervisors, and senior management 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 held by
them. The shares of the Company held by them shall not be transferred within one (1) year as of the listing
date of the shares of the Company. The Articles of Association may make other restrictive provisions on
the transfer of shares held by directors, supervisors, and senior management of the Company.
Register of Shareholders
The original register of shareholders of H shares listed in Hong Kong shall be kept in Hong Kong for
inspection by shareholders, where there are provisions in the Listing Rules on the period of closure of
register of members before the general meeting is held or the base day before the company decides to
distribute dividends, such provisions shall prevail. If there is no specific provisions, closure of register of
members shall be determined by the board of directors. The shareholders shall enjoy rights and undertake
obligations according to the class of shares they hold; shareholders holding the same class of shares shall
enjoy the same rights and undertake the same obligations.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-2 –


--- page 487 ---
RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
Shareholders
The Company shall establish a register of shareholders with the certificates provided by the
securities registration authority. The register of shareholders shall be sufficient evidence of the holding of
the shares of the Company by the shareholders.
Rights and Obligations of Shareholders
Shareholders of the Company shall entitle to the following rights:
1. to receive dividends and other forms of profit distribution according to the proportion of shares
they hold;
2. to request, convene, hold, participate or authorize proxies to attend general meeting, and to
exercise the right to speak and voting rights according to the proportion of shares they hold;
3. to supervise the business operations of the Company and to make suggestions or inquiries;
4. to transfer, give or pledge the shares held by them in accordance with the laws and regulations,
administrative regulations and the Articles of Association;
5. to inspect the Articles of Association, the register of shareholders, the counterfoils of corporate
bonds, the minutes of the general meeting, the resolutions of the Board of Directors’ meeting,
the resolutions of the Board of supervisors’ meeting, and the financial accounting report;
6. to participate in the distribution of the remaining property of the Company according to the
proportion of shares they hold when the Company is dissolved or liquidated;
7. to require the Company to purchase its shares in the event that shareholders object to
resolutions of the general meeting concerning merger or division of the Company;
8. other rights stipulated by laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s shares are listed, or these Articles of
Association.
A shareholder requesting for inspection of information or access to materials referred to in the
preceding Article shall produce to the Company written documents, evidencing the class and number of
shares that the shareholder holds. The Company shall provide such information and materials as
requested by the shareholder after confirming the identity of the shareholder.
Shareholders of the Company shall assume the following obligations:
1. to abide by laws, administrative regulations and the Articles of Association;
2. to make a capital contribution according to the shares they subscribe for and the capital
participation method;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-3 –


--- page 488 ---
3. not to withdraw shares unless as prescribed by laws and regulations;
4. not to abuse their shareholders’ rights to harm the Company’s or other shareholders’ interests;
not to abuse the Company’s legal person status or the shareholders’ limited liability to harm the
interests of the Company’s creditors.
If a shareholder of a company abuses his rights and causes losses to the Company or other
shareholders, the shareholder shall be liable for compensation according to law.
If a shareholder of a company abuses the independent status of the Company legal person and
the limited liability of the shareholder to evade debts and seriously damages the interests of
creditors of the Company, the shareholder shall bear joint and several liability for the debts of
the Company;
5. other obligations to be assumed by the shareholders according to the laws, administrative
regulations, and the Articles of Association.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-4 –


--- page 489 ---
THE GENERAL MEETING
General Provisions of the General Meeting
The general meeting is the authority of the Company and shall exercise the following functions and
powers in accordance with the laws:
1. to elect and replace directors and supervisors who are not representatives of the employees and
to decide matters relating to the remuneration of directors and supervisors;
2. to consider and approve reports of the Board of Directors;
3. to consider and approve reports of the Board of Supervisors;
4. to consider and approve profit distribution plans and loss recovery plans of the Company;
5. to make resolutions on the increase or reduction of the Company’s registered capital;
6. to make resolutions on the issue of corporate bonds or other securities and listing plan;
7. to make resolutions on matters such as the merger, division, dissolution, liquidation or change
in the organizational form of the Company;
8. to amend the Articles of Association;
9. to make resolutions on the appointment and dismissal of engagement of accounting firms by
the Company;
10. to consider and approve the external guarantees as stipulated in Article 39 of the Articles of
Association;
11. unless as otherwise provided by the securities regulatory rules of the place where the shares of
the Company are listed, to decide the following transactions (except for the provision of
guarantees and financial assistance):
(1) the total amount of assets involved in the transaction (where both book value and
appraised value exist, whichever is higher) accounts for more than 50% of the Company’s
total audited assets for the most recent period;
(2) the transaction amount accounts for more than 50% of the Company’s latest audited net
assets and exceeds RMB50 million;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-5 –


--- page 490 ---
(3) the operating income related to the transaction subject (such as equity) in the most recent
accounting year accounts for more than 50% of the audited operating income of the
Company in the most recent accounting year and exceeds RMB50 million;
(4) the profit generated from the transaction accounts for more than 50% of the audited net
profit of the Company in the most recent accounting year and exceeds RMB7.5 million;
(5) the net profit related to the transaction subject (such as equity) in the most recent
accounting year accounts for more than 50% of the audited net profit of the Company in
the most recent accounting year and exceeds RMB7.5 million;
(6) the total value of purchase or sale assets by the Company or the amount of the transaction
calculated cumulatively within twelve consecutive months exceeds 30% of the audited
total assets of the Company for the latest period.
If the data involved in the calculation of the above indicators are negative, the absolute value of
the data shall be used;
12. to consider transactions between the Company and related parties in which the transaction
amount (except for the provision of guarantees) accounts for more than 2% of the Company’s
total audited assets for the most recent period and exceeds RMB30 million;
13. to consider and approve the change in the use of the raised funds;
14. to consider any share incentive scheme and employee stock ownership plan;
15. to consider and approve the following matters regarding the provision of external financial
assistance by the Company:
(1) the asset-liability ratio of the sponsored object for the latest period exceeds 70%;
(2) the amount of single financial assistance or the cumulative amount of financial assistance
provided within 12 consecutive months exceeds 10% of the company’s latest audited net
assets;
(3) other circumstances stipulated by the CSRC, the Stock Exchange where the Company’s
shares are listed or the Articles of Association;
16. other matters are to be resolved by the general meeting as required by the laws, administrative
regulations, departmental rules, the securities regulatory rules of the place where the shares of
the Company are listed, and the Articles of Association.
The Company shall convene an interim general meeting, within two (2) months from the date of the
occurrence of any of the following circumstances:
1. when the number of Directors is less than the number prescribed by the Company Law or less
than two-thirds (2/3) of the number required by the Articles of Association;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-6 –


--- page 491 ---
2. when the Company’s uncovered losses amount to one-third (1/3) of the total paid-up share
capital;
3. when a request is made by shareholders who individually or collectively hold more than ten
percent (10%) of the shares of the Company;
4. when the Board of Directors deems it necessary;
5. when the Board of Supervisors proposes to convene it;
6. other circumstances as stipulated by laws, administrative regulations, departmental rules, the
listing rules of the Stock Exchange where the Company’s shares are listed or the Articles of
Association.
The Convening of General Meeting
The Board of Directors is responsible for convening general meeting.
The Board of Directors of the Company shall perform the duty earnestly and convene the general
meeting on time within the time limit prescribed in the Articles of Association. All directors shall be
diligent and responsible to ensure the normal convening of general meeting and the exercise of their
powers in accordance with the law. If the Board of Directors agrees to convene an interim general
meeting, a notice of the convening of the general meeting will be issued within 5 days after the board
resolution is made; if the Board of Directors does not agree to convene an interim general meeting, it shall
give reasons.
The independent directors have the right to propose the convening of an interim general meeting. In
response to a proposal by an independent director to convene an extraordinary general meeting, the Board
of Directors shall, in accordance with the laws and regulations, the Hong Kong Listing Rules and these
Articles of Association, provide written feedback within ten (10) days after receiving the proposal to
agree or disagree with the convening of the extraordinary general meeting. If the Board of Directors
agrees to convene an interim general meeting, it will issue a notice of the convening of the general
meeting within five (5) days after making a resolution of the Board of Directors. If the Board of Directors
does not agree to hold an interim general meeting, it shall explain the reasons and make an
announcement.
The Board of Supervisors has the right to propose to the Board of Directors to convene an interim
general meeting and shall make such proposal in writing. The Board of Directors shall, in accordance
with the laws, administrative regulations and these Articles of Association, provide written feedback on
whether it agrees or disagrees with the convening of an interim general meeting within ten (10) days after
receiving the proposal.
Shareholders who individually or collectively hold more than ten percent (10%) of the shares of the
Company have the rights to propose to the Board of Directors for convening an interim general meeting
and shall make such proposal in writing. The Board of Directors shall, in accordance with the laws,
administrative regulations and these Articles of Association, provide written feedback within ten (10)
days after receiving the request, whether it agrees or does not agree to convene an interim general
meeting.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-7 –


--- page 492 ---
If the Board of Directors agrees to convene an interim general meeting, it shall issue a notice to
convene general meeting within five (5) days after making a resolution of the Board of Directors, and any
changes to the original request in the notice shall be subject to the consent of the shareholders concerned.
If the Board of Directors does not agree to convene an interim general meeting or does not provide
feedback within ten (10) days after receiving the request, shareholders individually or collectively
holding more than ten (10) percent of the shares of the Company have the right to propose to the Board of
Supervisors to convene an interim general meeting and shall submit the request in writing to the Board of
Supervisors.
If the Board of Supervisors agrees to convene an interim general meeting, it shall issue a notice of
convening the general meeting within five (5) days after receiving the request, and any changes to the
original proposal in the notice shall be subject to the consent of the shareholders concerned.
If the Board of Supervisors fails to issue a notice of the general meeting within the prescribed
period, it shall be deemed not to convene and preside over general meeting. Shareholders hold more than
ninety (90) consecutive days, or who individually or collectively hold more than ten percent (10%) of the
shares of the Company may convene and preside over the meeting on their own.
Notices of the General Meeting
The convener shall notify all shareholders of the time, place and matters to be considered at the
meeting twenty-one (21) days prior to the annual general meeting, and shall notify all shareholders of the
time, place and matters to be considered at the meeting fifteen (15) days prior to the interim general
meeting. Where laws and regulations or the securities regulatory authority where the Company’s shares
are listed provide otherwise, such provisions shall prevail.
The notice of the general meeting shall meet the following requirements:
1. the time, venue and duration of the meeting;
2. matters and proposals submitted for consideration at the meeting;
3. the equity registration date of the shareholders who are entitled to attend on the general
meeting;
4. particulars shall be in clear text that all shareholders are entitled to attend general meeting and
may appoint their proxies in writing to attend and vote at the meetings. Such proxies need not
be shareholders of the Company;
5. name(s) and telephone number(s) of the standing contact person(s) for the affairs of meetings;
6. other requirements stipulated by laws, administrative regulations, the regulatory rules of the
place where the Company’s shares are listed and the Articles of Association.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-8 –


--- page 493 ---
Resolutions at the General Meeting
The resolutions of the general meeting are classified into ordinary resolutions and special
resolutions.
Ordinary resolutions of the general meeting shall be adopted by more than half (1/2) of the voting
rights held by the shareholders (including shareholders’ proxies) present at the general meeting.
Special resolutions of the general meeting shall be adopted by more than two-thirds (2/3) of the
voting rights held by the shareholders (including shareholders’ proxies) present at the general meeting.
The following matters shall be passed by ordinary resolution of the general meeting:
1. work reports of the Board of Directors and the Board of Supervisors;
2. proposals formulated by the Board of Directors for distribution of profits and for losses
recovery;
3. appointment and removal of members of the Board of Directors and the Board of Supervisors,
their remuneration and method of payment of their remuneration;
4. annual budget and final accounts of the Company;
5. annual report of the Company;
6. other matters other than laws, administrative regulations, the Hong Kong Listing Rules, other
provisions of the relevant regulatory authorities where the Company’s shares are listed, or the
provisions of the Articles of Association shall be adopted by special resolution.
The following matters shall be passed by special resolution of the general meeting:
1. the increase or reduction of the registered capital by the Company;
2. the division, merger, dissolution, or liquidation of the Company;
3. the amendment to the Articles of Association;
4. the amount of purchase and the sale of major assets or the guarantee by the Company within
one year exceeds 30% of the latest audited total assets of the Company;
5. other matters stipulated by laws, administrative regulations, or the Articles of Association, as
well as other matters that the general meeting determines by ordinary resolution that will have
a significant impact on the Company and need to be adopted by special resolution.
Shareholders (including shareholders’ proxies) may exercise voting rights in the amount of the
voting shares they represent, and each share shall have one vote. A shareholder (including shareholder’s
proxies) who has two or more voting rights shall not have to vote for, against or abstain from all voting
rights in a poll.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-9 –


--- page 494 ---
Shares held by the Company do not carry any voting rights and shall not be counted in the total
number of voting shares represented by shareholders present at the general meeting.
Under applicable laws and regulations and the Hong Kong Listing Rules, if any shareholder is
required to abstain from voting on a resolution or restricts any shareholder to voting only for (or against)
a resolution, the number of votes cast by such shareholder or its representative in violation of relevant
regulations or restrictions shall not be counted in the total number of voting shares.
When the general meeting deliberates connected transaction matters, the connected shareholders
shall not participate in voting, and the number of shares with voting rights represented by them shall not
be counted in the total number of valid votes of shares with voting rights present at the general meeting.
Except as otherwise provided by laws and regulations, departmental rules, securities regulatory rules of
the place where the Company’s shares are listed, and all shareholders are related parties.
The shareholders shall vote by disclosed ballot.
DIRECTORS AND THE BOARD OF DIRECTORS
Directors
Directors shall be elected or replaced at the general meeting for a term of three (3) years and may be
re-elected upon the expiration of their terms of office. Except provided by relevant laws, regulations, the
Articles of Association, and relevant securities regulatory rules of the stock exchange where the
Company’s shares are listed.
The general manager or other senior management members may concurrently serve as directors,
provided that the total number of directors who concurrently serve as general manager or other senior
management members and directors who are employee representatives shall not exceed half (1/2) of the
total number of directors of the Company.
Board of Directors
The Board of Directors is composed of 7-11 directors, and the members of the Board of Directors
are elected by the general meeting in accordance with law. The directors are categorized as executive
directors, non-executive directors, and independent directors, of whom there shall be not less than three
independent directors, which shall constitute at least one third or more of the total number of the Board,
at least one independent director shall have appropriate professional qualifications or appropriate
accounting or related financial management expertise, and at least one independent Director shall
ordinarily reside in Hong Kong.
The Board of Directors shall exercise the following functions and powers:
1. to convene the general meeting and report on its work to the general meeting;
2. to implement the resolutions of the Shareholder’ Meeting;
3. to determine the business operation plans and investment plans of the Company;
4. to formulate the profit distribution plans and loss recovery plans of the Company;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-10 –


--- page 495 ---
5. to formulate plans of the Company regarding increase or reduction of the registered capital,
issuance of corporate bonds or other securities and listing;
6. to formulate plans for material acquisitions, purchase of shares of the Company or merger,
division, dissolution, or conversion of the corporate form of the Company;
7. to decide on matters such as external investment, acquisition and disposal of assets, pledge of
assets, external guarantees, entrusted wealth management, connected transactions and external
donations of the Company within the scope of authorization of the general meeting;
8. to determine the setup of the Company’s internal management bodies;
9. to decide on the appointment or dismissal of the Company’s general manager, secretary to the
Board and other senior management members, and decide on their remuneration, rewards and
punishments; to decide on the appointment or dismissal of the Company’s deputy general
manager, chief financial officer and other senior management based on the nomination of the
general manager, and decide on their remuneration, rewards and punishments;
10. to formulate the fundamental management system of the Company;
11. to formulate the proposal for alteration of to the Articles of Association;
12. to request the general meeting to engage or replace the accounting firm that provides auditing
services for the Company;
13. to listen to the work report of the general manager of the Company and inspect his/her work;
14. to manage the information disclosure of the Company;
15. except as otherwise provided by the securities regulatory rules of the place where the shares of
the Company are listed, to decide the following transactions (except for the provision of
guarantees and financial assistance) and if those transactions fall within the authority of the
general meeting, they shall be submitted to the general meeting for consideration:
(1) The total amount of assets involved in the transaction (where both book value and
appraised value exist, whichever is higher) accounts for more than 10% of the company’s
audited total assets for the most recent period;
(2) The transaction amount accounts for more than 10% of the Company’s latest audited net
assets and exceeds RMB10 million;
(3) The operating income related to subject matter of the transaction (such as equity) in the
most recent accounting year accounts for more than 10% of the audited operating income
of the Company in the most recent accounting year and exceeds RMB10 million;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-11 –


--- page 496 ---
(4) The profit generated from the transaction accounts for more than 10% of the audited net
profit of the Company in the most recent accounting year and exceeds RMB1.5 million;
(5) The net profit related to the subject matter of the transaction (such as equity) in the most
recent accounting year accounts for more than 10% of the audited net profit of the
Company in the most recent accounting year and exceeds RMB1.5 million.
If the figures involved in the calculation of the above indicators are negative, the absolute value
of such figures shall be used;
16. to decide on the following connected transactions (except for the provision of guarantees),
which shall be submitted to the general meeting for consideration if they fall within the
authority of the general meeting:
(1) connected transactions between the Company and related individuals exceed
RMB300,000;
(2) transactions with related legal entities that account for more than 0.2% of the Company’s
latest audited total assets and exceed RMB3 million;
(3) non-exempt connected transactions with connected parties defined by the Hong Kong
Stock Exchange;
(4) the following connected transactions between the Company and its related parties are
exempted from consideration in the manner of connected transactions:
i. one party subscribes to the other party’s public offering stocks, corporate bonds,
debentures, convertible corporate bonds, or other securities in cash;
ii. one party acts as a member of the underwriting syndicate to underwrite the other
party’s public offering of shares, corporate bonds or debentures, convertible bonds
or other types of securities;
iii. one party receives dividends, bonuses or remuneration based on a resolution of the
general meeting of the other party;
iv. one party participates in the public bidding or auction of the other party, except
where it is difficult to form a fair price through bidding or auction;
v. transactions in which a company unilaterally obtain benefits, including receiving
gifts of cash assets, being granted debt relief, and accepting guarantees and
assistance;
vi. connected transactions of which prices are determined by the State;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-12 –


--- page 497 ---
vii. the related party provides funds to the Company at an interest rate not higher than
the benchmark interest rate for loan for the same period stipulated by the People’s
Bank of China, and the Company does not provide any corresponding guarantee for
the financial assistance;
viii. the Company provides products and services to directors, supervisors and senior
management on the same trading terms as non-related parties;
ix. connected transactions that can be exempted or individually exempted under
Chapter 14A of the Hong Kong Listing Rules;
x. any other transactions which are specified by the CSRC and the stock exchange
where the shares are listed.
Before the connected transaction is submitted to the Board of Directors for consideration,
it shall be considered and discussed in a special meeting of independent directors and
disclosed in the announcement of the connected transaction with approval by more than
half of all independent directors of the Company;
17. external guarantees other than those required to be submitted to the general meeting for
consideration and approval as provided in Article 39 of these Articles of Association;
18. external financial assistance matters other than those required to be submitted to the general
meeting for consideration and approval as provided in Article 38 of these Articles of
Association;
19. any other authorities which are granted by law, administrative regulations, departmental rules,
or these Articles of Association.
The chairman of the Board of Directors exercises the following functions and powers:
1. to preside over the general meeting and convene and preside over the meeting of the Board of
Directors;
2. to supervise and inspect the implementation of the resolutions of the Board of Directors;
3. to consider and approve under the authorization of the Board of Directors of the Company the
following transactions within the ambit of his/ her authority, except as otherwise provided in
the securities regulatory rules of the place where the Company’s shares are listed:
(1) the total amount of assets involved in the transaction (where both book value and
appraised value exist, whichever is higher) accounts for less than 10% of the Company’s
total audited assets for the most recent period;
(2) the transaction amount accounts for less than 10% of the Company’s latest audited net
assets, or the absolute amount is less than RMB10 million, and the transaction does not
fall within the scope of consideration and approval by the Board of Directors or the
general meeting;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-13 –


--- page 498 ---
(3) the operating income related to the subject matter of the transaction (such as equity) in
the most recent accounting year accounts for less than 10% of the audited operating
income of the Company in the most recent accounting year, or the absolute amount is less
than RMB10 million, and the transaction does not fall within the scope of consideration
and approval by the Board of Directors or the general meeting;
(4) the profit generated from the transaction accounts for less than 10% of the audited net
profit of the Company in the most recent accounting year, or the absolute amount is less
than RMB1.5 million and the transaction does not fall within the scope of consideration
and approval by the Board of Directors or the general meeting;
(5) the net profit related to the subject matter of the transaction (such as equity) in the most
recent accounting year accounts for less than 10% of the audited net profit of the
Company in the most recent accounting year, or the absolute amount is less than RMB1.5
million, and the transaction does not fall within the scope of consideration and approval
by the Board of Directors or the general meeting;
(6) a connected transaction (except for guarantees provided by the Company) in which the
amount of the transaction between the Company and a connected individual is less than
RMB300,000 and does not fall within the scope of consideration and approval by the
Board of Directors or the general meeting; or the amount of the connected transaction
between the Company and connected legal entities is less than RMB3 million or accounts
for less than 0.2% of the Company’s total audited assets of the most recent period;
(7) financing matters in which the amount of the Company’s single borrowing or the
cumulative amount of borrowings within an accounting year is less than 10% of the
Company’s latest audited net assets;
4. to exercise any other functions and powers granted by the Board of Directors.
The Board of Directors shall hold regular meetings, which shall be held at least four times a year,
approximately once a quarter. Notices of regular board meetings shall be sent to all directors and
supervisors at least fourteen days in advance. Regular meetings of the Board of Directors may not be
replaced by the board’s approval given by way of circulation of written resolutions.
The interim meeting of the Board of Directors shall be notified in writing to all directors and
supervisors three days in advance of the meeting.
A meeting of the Board of Directors shall be held only with the presence of more than half of the
directors. A resolution made by the Board of Directors must be passed by more than half of all the
directors.
Resolutions of the Board of Directors shall be voted on a one-person-one-vote basis.
Resolutions of the Board of Directors shall be voted on by disclosed ballot.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-14 –


--- page 499 ---
GENERAL MANAGER
The Company has a general manager who is nominated by the chairman of the Board of Directors
and appointed or dismissed by the Board of Directors.
The Company has several deputy general managers and a number of chief financial officer, secretary
of the board and other several senior management members who are nominated by the general manager
and appointed or dismissed by the Board of Directors.
Each term of the general manager is three years and may be extended by reappointment. The general
manager is accountable to the Board of Directors and exercise the following powers:
1. to be responsible for organizing the formulation of the Company’s development strategy,
planning, business plans, major investment proposals, and reporting to the Board of Directors;
2. to organize the implementation of the resolutions of the Board of Directors and report to the
Board of Directors;
3. to organize the implementation of the Company’s annual business plan, budget program and
investment plan;
4. to formulate the plan for establishment of the Company’s internal management organization;
5. to formulate the Company’s fundamental management system;
6. to be responsible for the nomination, management, and appraisal of senior management
personnel appointed or dismissed by the Board of Directors;
7. to appoint or dismiss management personnel other than those required to be appointed or
dismissed by the Board of Directors;
8. to be responsible for submitting annual work reports and other reports to the Board of
Directors;
9. any other functions and powers conferred by the Articles of Association and the Board of
Directors.
The general manager is present at the Board of Directors’ meetings.
SECRETARY OF THE BOARD
The Company has a secretary of the Board of Directors as the person in charge of information
disclosure, who is responsible for, among others, information disclosure, arrangement of the general
meeting and meetings of the Board of Directors, investor relationship and shareholder particulars
management. The person in charge of information disclosure shall attend meetings of the Board of
Directors and general meeting of the Company.
SUPERVISORS AND THE BOARD OF SUPERVISORS
The directors of the Company, general managers, and other senior management members are not
allowed to serve concurrently as supervisors.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-15 –


--- page 500 ---
The Company establish the Board of Supervisors. The Board of Supervisors consist of three
supervisors. The Board of Supervisors appoint a chairperson, who shall be elected by more than half of
the supervisors. The meetings of the Board of Supervisors shall be convened and presided over by the
chairperson. If the chairperson of the Board of Supervisors is unable or fails to perform his/her duties,
such meeting shall be convened and presided over by a supervisor elected by half or more of the
supervisors.
The board of supervisors consists of shareholder representatives and an appropriate proportion of
employee representatives of the Company. The employee representatives of the Board of Supervisors
shall be elected by employees of the Company at the employee representatives’ meeting, the shareholder
representative supervisors shall be elected by the shareholders.
The Board of Supervisors shall exercise the following functions and powers:
1. to review the regular reports of the Company prepared by the Board of Directors and to submit
its written review opinions;
2. to check the finance of the Company;
3. to supervise the directors and senior management members in the performance of their duties
and to propose the dismissal of the directors and senior management members who violate the
laws, administrative regulations, the Articles of Association or resolutions of the general
meeting;
4. to demand a director and a senior management member to correct his/her act that is detrimental
to the Company’s interests;
5. to propose the convening of interim general meeting in the event that the Board of Directors
fails to perform its duty of convening and presiding over a general meeting in accordance with
the Company Law;
6. to submit proposals to the general meeting;
7. to file legal proceedings against directors and senior management under the Article 189 of the
Company Law;
8. investigate any irregularities, if identified, in the operation of the Company; If necessary, it
may engage an accounting firm, a law firm and other professional institutions to assist it in its
work, and the expenses shall be borne by the Company.
A resolution of the Board of Supervisors shall be passed by more than half of the supervisors.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-16 –


--- page 501 ---
FINANCIAL ACCOUNTING SYSTEM
The Company shall formulate its own financial accounting system in accordance with the laws,
administrative regulations, and the requirements of relevant state departments.
The Company shall submit, disclose and/or submit its annual reports, interim reports, preliminary
results announcements and other documents to shareholders in accordance with the regulatory rules and
other normative documents of the stock exchange where the Company’s shares are listed.
PROFIT DISTRIBUTION
The Company shall formulate a profit distribution system, which can distribute dividends in cash,
stocks, a combination of cash and stocks, or other methods permitted by laws and regulations. The
specific methods are as follows:
1. The Company’s profit distribution principle: The Company implements the dividend
distribution policy of equal right for equal share and shareholders receive dividends and other
forms of profit distribution based on the shares they hold. The Company implements an active
profit distribution policy, attaches importance to reasonable investment returns for investors,
and maintains sustainability and stability. The Company may distribute profits in the form of
cash or shares, and the distribution of profits shall not exceed the cumulative distributable
profits and shall not impair the Company’s ability to operate as a going concern. The Board of
Directors, the Board of supervisors and the general meeting shall give full consideration to the
opinions of independent directors, external supervisors (if any) and public investors in the
process of decision-making and discussion on the profit distribution policy.
2. The Company’s general form of profit distribution: the distribution of dividends by cash,
shares, or a combination of both, and in the event that the Company has cash for dividend
distribution, the Company shall give priority to the use of cash dividend for profit distribution.
3. The Company’s specific conditions and proportion of cash dividend: the Company mainly
adopts the profit distribution policy of cash dividend, that is, the Company achieves profit in
the current year, and can distribute profits after making up the loss, making allocation to the
statutory reserve fund and surplus reserve fund in accordance with the laws, then the Company
may distribute cash dividend; The Company’s profit distribution shall not exceed the
cumulative distributable profit.
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The company is dissolved due to the following reasons:
1. the business term specified in this Articles of Association has expired or other cause for
dissolution specified in this Articles of Association have occurred;
2. the general meeting resolves to dissolve the Company;
3. dissolution is required due to merger or division of the Company;
4. the Company is revoked of its business license, ordered to close down or deregistered in
accordance with the laws;
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-17 –


--- page 502 ---
5. in the event that there is severe difficulty in the operation and management of the Company,
and the continued existence of the Company will cause heavy losses to the interests of its
shareholders and there is no other way to resolve, shareholders who hold more than ten percent
(10%) of the whole voting rights may submit a petition to the People’s Court to dissolve the
Company.
Where a company is dissolved under the circumstance in items 1, 2, 4 or 5 of the preceding
paragraph, a liquidation group shall be established within 15 days from the date of occurrence of the
cause of dissolution to commence the liquidation process. The liquidation group shall be composed of the
directors or the personnel determined by the general meeting. If a liquidation group is not established
within the time limit, the creditor may apply to the People’s Court to appoint relevant personnel to form
a liquidation group to conduct the liquidation.
The liquidation group shall notify the creditors within a period of ten (10) days upon the date of its
formation and make announcements in newspapers within sixty (60) days. The creditors are required to,
within thirty (30) days upon the date of receiving the notices, or for the creditors who fail to receive the
notices, within forty-five (45) days upon the date of the public announcement, declares their claims to the
liquidation group.
After liquidating the Company’s assets and preparing the statement of assets and liabilities and the
list of assets, the liquidation group shall prepare a liquidation plan and submit it to the general meeting or
the People’s Court for confirmation.
If the liquidation group finds that the Company’s assets are insufficient to pay off its debts after
clearing up the Company’s assets and preparing the statement of assets and liabilities and the list of
assets, it shall apply to the People’s Court for declaration of bankruptcy in accordance with the laws.
After the liquidation of the Company, the liquidation group shall prepare a liquidation report,
submit it to the general meeting or the People’s Court for confirmation, and submit it to the Company
registration authority, apply for deregistration of the Company, and announce the termination of the
Company.
ALTERATION OF THE ARTICLES OF ASSOCIATION
The Company shall alter the Articles of Association under any of the following circumstances:
1. after the amendment of the Company Law or relevant laws, administrative regulations, or
securities regulatory rules of the place where the Company’s shares are listed, the provisions
under the Articles of Association conflict with the provisions of the amended laws,
administrative regulations, or securities regulatory rules of the place where the Company’s
shares are listed;
2. there has been a change to the Company, resulting in inconsistency with the contents in the
Articles of Association;
3. the general meeting determined to alter the Articles of Association.
APPENDIX III SUMMARY OF OUR ARTICLES OF ASSOCIATION
– III-18 –


--- page 503 ---
1. FURTHER INFORMATION ABOUT OUR COMPANY
A. Incorporation
Our Company was incorporated as a limited liability company under the laws of the PRC in July
2015 and was converted into a joint stock company with limited liability in December 2022. Our
registered address and principal place of business is at Room 1003, Building 2, Chongwen Park, Nanshan
Smart Park, No. 3370 Liuxian Avenue, Fuguang Community, Taoyuan Sub-district, Nanshan District,
Shenzhen, PRC.
We have established a place of business in Hong Kong at 40/F, Dah Sing Financial Centre, 248
Queen’s Road East, Wan Chai, Hong Kong and was registered with the Registrar of Companies in Hong
Kong as a non-Hong Kong company under Part 16 of the Companies Ordinance on June 25, 2024. Ms.
Ching Shuk Wah Shirley ( ೻ૺശ), our joint company secretary, is the authorized representative of our
Company for the acceptance of service of process and notices on behalf of our Company in Hong Kong
under Part 16 of the Companies Ordinance. The address for service of process on our Company in Hong
Kong is the same as its principal place of business in Hong Kong as set out above.
As our Company was established in the PRC, we are subject to the relevant laws and regulations of
the PRC. An overview of the relevant aspects of laws and regulations of the PRC is set out in the section
headed “Regulatory Overview” in this prospectus. A summary of our Articles of Association is set out in
Appendix III to this prospectus.
B. Changes in the Share Capital of our Company
The registered capital of our Company was increased from RMB10,053,436 to RMB360,000,000
upon completion of the joint stock reform of our Company on December 28, 2022. As of the date of our
establishment as a joint stock company with limited liability, our registered capital was RMB360,000,000
consisting of 360,000,000 issued Domestic Shares with a nominal value of RMB1.00 each, which has
been fully paid up by our promoters.
Immediately following the completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, assuming that th e Over-allotment Option is not exercised, our registered share
capital will be increased to RMB400,000,000, divided into 46,156,853 Domestic Shares and 353,843,147
H Shares, fully paid up or credited as fully paid up, representing approximately 11.54% and
approximately 88.46% of our enlarged share capital, respectively.
Save as disclosed above, there has been no alteration in the share capital within two years
immediately preceding the date of this prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1–


--- page 504 ---
C. Resolutions Passed by Our Shareholders’ General Meeting in relation to the Global Offering
At the extraordinary general meeting of the Shareholders held on May 31, 2024, the following
resolutions, among others, were duly passed:
(1) the issue by our Company of H Shares of nominal value of RMB1.00 each and such H Shares be
listed on the Stock Exchange;
(2) the proposed number of H Shares to be offered under the Global Offering and the grant of the
Over-allotment Option. The number of H Shares to be issued pursuant to the exercise of the
Over-allotment Option shall not exceed 15% of the total number of H Shares to be offered
initially pursuant to the Global Offering;
(3) 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; and
(4) authorization of our Board and its authorized persons to handle all matters relating to, among
other things, the Global Offering.
D. Changes in Share Capital of our Subsidiaries
The list of our subsidiaries is set out in Note 1 to the Accountants’ Report, the text of which is set out
in Appendix I to this Prospectus.
Save as disclosed in the section headed “History and Corporate Structure—Our Principal
Subsidiaries,” there has been no alteration in the share capital of any of our subsidiaries within the two
years preceding the date of this prospectus.
E. Restriction on Share Repurchases
For details of the restrictions on share repurchases by our Company, see the section headed
“Appendix III—Summary of Our Articles of Association” in this prospectus.
2. FURTHER INFORMATION ABOUT OUR BUSINESS
A. Summary of Our Material Contract
We have entered into the following contract (not being contract entered into in the ordinary course
of business) within the two years immediately preceding the date of this prospectus that is or may be
material:
(1) the Hong Kong Underwriting Agreement.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2–


--- page 505 ---
B. Our Intellectual Property Rights
As of the Latest Practicable Date, our Company had registered, or has applied for the registration of
the following intellectual property rights which were material to our Group’s business.
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we considered
to be material to our business:
No. Trademark Class Owner
Place of
Registration Registration No. Validity Period
1.
 7 Our Company PRC 14600874 July 21, 2015 –
July 20, 2025
2.
 9 Our Company PRC 14600894 July 21, 2015 –
July 20, 2025
3.
 7, 9 Our Company European
Union
018702015 August 25, 2022 –
May 13, 2032
4.
 7, 9 Our Company Hong Kong 306115572 November 24, 2022 –
November 23, 2032
5.
 7, 9,
12,
35,
42
Our Company Hong Kong 306576733 June 7, 2024 –
June 6, 2034
6.
8 Our Company PRC 64532285 November 7, 2022 –
November 6, 2032
7.
 10 Our Company PRC 64525611 November 7, 2022 –
November 6, 2032
8.
 11 Our Company PRC 64525635 November 7, 2022 –
November 6, 2032
9.
 12 Our Company PRC 64529846 November 7, 2022 –
November 6, 2032
10.
 16 Our Company PRC 64509904 November 7, 2022 –
November 6, 2032
11.
 17 Our Company PRC 64511873 November 7, 2022 –
November 6, 2032
12.
 28 Our Company PRC 64526415 November 7, 2022 –
November 6, 2032
13.
 36 Our Company PRC 64510252 October 28, 2022 –
October 27, 2032
14.
 37 Our Company PRC 64510630 October 28, 2022 –
October 27, 2032
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3–


--- page 506 ---
No. Trademark Class Owner
Place of
Registration Registration No. Validity Period
15.
 38 Our Company PRC 64515164 November 7, 2022 –
November 6, 2032
16.
 41 Our Company PRC 64507689 October 28, 2022 –
October 27, 2032
17.
 43 Our Company PRC 64510682 November 7, 2022 –
November 6, 2032
18.
 7, 9 Our Company European
Union
018702138 August 24, 2022 –
May 12, 2032
19.
 7, 9 Our Company Japan 6628229 October 17, 2022 –
October 17, 2032
20.
 7, 9 Our Company United
Kingdom
UK00003788134 August 12, 2022 –
May 16, 2032
21.
 7 Our Company US 7098777 July 4, 2023 –
July 4, 2033
22.
 9 Our Company US 7100234 July 4, 2023 –
July 4, 2033
23.
 7, 9,
12,
35,
42
Our Company Hong Kong 306576760 June 7, 2024 –
June 6, 2034
24.
31 Our Company PRC 51903309 August 14, 2021 –
August 13, 2031
25.
 32 Our Company PRC 51867431 August 21, 2021 –
August 20, 2031
26.
 24 Our Company PRC 51864011 August 14, 2021 –
August 13, 2031
27.
 33 Our Company PRC 51863932 August 21, 2021 –
August 20, 2031
28.
 3 Our Company PRC 51862507 August 14, 2021 –
August 13, 2031
29.
 18 Our Company PRC 51861105 August 14, 2021 –
August 13, 2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4–


--- page 507 ---
No. Trademark Class Owner
Place of
Registration Registration No. Validity Period
30.
 26 Our Company PRC 51856408 August 14, 2021 –
August 13, 2031
31.
 45 Our Company PRC 51855858 August 14, 2021 –
August 13, 2031
32.
 29 Our Company PRC 51854505 August 21, 2021 –
August 20, 2031
33.
 19 Our Company PRC 51851495 August 21, 2021 –
August 20, 2031
34.
 27 Our Company PRC 51851453 August 21, 2021 –
August 20, 2031
35.
 30 Our Company PRC 51851436 August 28, 2021 –
August 27, 2031
36.
 13 Our Company PRC 51851110 August 14, 2021 –
August 13, 2031
37.
 43 Our Company PRC 51851036 August 21, 2021 –
August 20, 2031
38.
 23 Our Company PRC 51846530 August 21, 2021 –
August 20, 2031
39.
 36 Our Company PRC 51846118 August 21, 2021 –
August 20, 2031
40.
 5 Our Company PRC 51841215 August 21, 2021 –
August 20, 2031
41.
 2 Our Company PRC 51839645 August 21, 2021 –
August 20, 2031
42.
 22 Our Company PRC 51837828 August 21, 2021 –
August 20, 2031
43.
 34 Our Company PRC 51837401 August 21, 2021 –
August 20, 2031
44.
 36 Our Company PRC 60172168 June 14, 2022 –
June 13, 2032
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 5–


--- page 508 ---
No. Trademark Class Owner
Place of
Registration Registration No. Validity Period
45.
 43 Our Company PRC 60170996 June 14, 2022 –
June 13, 2032
46.
 9 Our Company PRC 60165484 June 7, 2022 –
June 6, 2032
47.
 16 Our Company PRC 60159720 June 7, 2022 –
June 6, 2032
48.
 41 Our Company PRC 60170981 June 14, 2022 –
June 13, 2032
49.
 7 Our Company PRC 55235600 November 7, 2021 –
November 6, 2031
50.
 28 Our Company PRC 55209892 October 28, 2021 –
October 27, 2031
51.
 12 Our Company PRC 55224837 November 21, 2021 –
November 20, 2031
52.
 9 Our Company PRC 55235704 November 21, 2021 –
November 20, 2031
53.
 10 Our Company PRC 55216070 November 21, 2021 –
November 20, 2031
54.
 1 Our Company PRC 51839651 November 7, 2021 –
November 6, 2031
55.
 7 Our Company Taiwan 01818415 January 16, 2017 –
January 15, 2027
56.
 9 Our Company Taiwan 01818561 January 16, 2017 –
January 15, 2027
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 6–


--- page 509 ---
Patents
As of the Latest Practicable Date, we had registered the following patents which we considered to be
material to our business:
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
1. Our Company An absolute position measurement
method, device, storage medium and
machine (ഒ࿁Зໄ಻ඎ
eༀໄeπᎷʧሯʿዚኜ )
ZL201911383251.1 Innovation December 27,
2019
August 13, 2021
2. Our Company An external torque measurement
method, device, controller and
mechanical arm (಻ඎ
eༀໄeછՓኜʿዚ૛ᑑ )
ZL201910594866.2 Innovation July 3, 2019 January 31, 2023
3. Our Company Position positioning method for
magnetic encoder, device, electronic
equipment and computer-readable
storage medium (֛
ၑዚ
̙ᛘπᎷʧሯ )
ZL201911405465.4 Innovation December 30,
2019
August 12, 2022
4. Our Company A motor running angle measurement
method and system, and a joint angle
measurement system ( ɓ၇ཥዚ༶Б
ܓ
಻ඎӻ୕ )
ZL201911379738.2 Innovation December 27,
2019
August 10, 2021
5. Our Company Adaptive modeling method for robot
drive and control integrated system
(ᅼ
ج)
ZL201811605226.9 Innovation December 26,
2018
September 3,
2021
6. Our Company Robotic arm and their joint module
(ዚ૛ᑑʿՉᗫືᅼଡ଼ )
ZL202211229329.6 Innovation October 8, 2022 April 7, 2023
7. Our Company Cobot arm and its joint module ( ՘Ъዚ
૛ᑑʿՉᗫືᅼଡ଼ )
ZL202211230239.9 Innovation October 8, 2022 March 3, 2023
8. Our Company Robotic arm and its joint module
(ዚ૛ᑑʿՉᗫືᅼଡ଼ )
ZL202211226201.4 Innovation October 8, 2022 August 25, 2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 7–


--- page 510 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
9. Our Company Joints, robotic arms, robots and their
harmonic reducer devices ( ᗫືe
ಯ஺ኜༀ
ໄ)
ZL202111160367.6 Innovation September 30,
2021
March 11, 2022
10. Our Company Braking devices for robotic arm joints,
robotic arm joints and robotic arms
(Փਗༀໄeዚ૛
ᑑᗫືʿዚ૛ᑑ )
ZL202180011958.9 Innovation December 30,
2021
March 19, 2024
11. Our Company Robotic arm and its joint modules and
coding components ( ዚ૛ᑑʿՉᗫື
ᅼଡ଼eᇜᇁଡ଼΁ )
ZL202211226202.9 Innovation October 8, 2022 December 1,
2023
12. Our Company Robotic arms and their joint modules US11820012 B1 Innovation January 6, 2023 November 21,
2023
13. Our Company A graphical programming method,
device and intelligent terminal for
robots (ྡҖᇜ೻
eༀໄʿ౽ঐ୞၌ )
ZL201811650764.X Innovation December 31,
2018
May 11, 2021
14. Our Company A robot model display method, device
and intelligent terminal ( ɓ၇ዚኜɛ
eༀໄʿ౽ঐ୞၌ )
ZL201811650765.4 Innovation December 31,
2018
June 27, 2023
15. Our Company Communication method between
terminal and equipment, terminal,
electronic equipment and storage
medium (e
୞၌eཥɿண௪ʿπᎷʧሯ )
ZL202011459418.0 Innovation December 11,
2020
January 10, 2023
16. Our Company Communication method, device and
computer-readable storage medium
based on wireless local area network
(eༀໄ
ၑዚ̙ᛘπᎷʧሯ )
ZL202011464366.6 Innovation December 11,
2020
March 1, 2024
17. Our Company Semi-intelligent teaching and learning
methods, intelligent robots and
storage media ( ̒౽ঐͪ઺ኪ୦˙
e౽ঐዚኜɛձπᎷʧሯ )
ZL201811467840.3 Innovation December 3,
2018
June 29, 2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 8–


--- page 511 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
18. Our Company Robot safety control method and device
based on multiple perceptions (׵
ʿ
ༀໄ)
ZL202010590912.4 Innovation June 24, 2020 April 28, 2023
19. Our Company Space trajectory transition method for
industrial robots, system and robots
(e
ӻ୕ʿዚኜɛ )
ZL201811627820.8 Innovation December 28,
2018
January 22, 2021
20. Our Company Robot control method, system and robot
(eӻ୕ʿዚኜ
ɛ)
ZL201811627830.1 Innovation December 28,
2018
April 23, 2021
21. Our Company A speed planning method with
continuous acceleration, device,
controller and robot (ܓ
eༀໄeછՓ
ኜʿዚኜɛ )
ZL201911380048.9 Innovation December 27,
2019
May 11, 2021
22. Our Company A mobile trajectory planning method,
device, equipment and storage
medium (e
ༀໄeண௪ձπᎷʧሯ )
ZL201811648453.X Innovation December 30,
2018
November 16,
2021
23. Our Company Motion path planning method of robotic
arm, device, equipment, media and
robotic arm (஝ྌ
eༀໄeண௪eʧሯʿዚ૛ᑑ )
ZL202110582502.X Innovation May 27, 2021 July 1, 2022
24. Our Company Robotic arm and its movement path
planning method, control system,
media and robot ( ዚ૛ᑑʿՉ༶ਗ༩
eછՓӻ୕eʧሯʿዚ
ኜɛ)
ZL202210039416.9 Innovation January 13, 2022 February 13,
2024
25. Our Company Robot dynamic parameter identification
method, device, terminal equipment
and storage medium ( ዚኜ ɛਗɢኪ
eༀໄe୞၌ண௪ʿ
πᎷʧሯ )
ZL201811600643.4 Innovation December 26,
2018
April 23, 2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 9–


--- page 512 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
26. Our Company Data verification method, security
controller and data verification
system (eτΌછՓኜ
᜕ӻ୕ )
ZL202110790486.3 Innovation July 13, 2021 January 31, 2023
27. Our Company A secure communication method,
device, robotic arm and storage
medium (eༀ
ໄeዚ૛ᑑʿπᎷʧሯ )
ZL202110791902.1 Innovation July 13, 2021 June 23, 2023
28. Our Company Flexible device housings, robotic arms
and robots (ༀໄ̮ಠeዚ૛ᑑ
ձዚኜɛ)
ZL202110570306.0 Innovation May 22, 2021 May 30, 2023
29. Our Company Machine shells, shell components,
robotic arms and robots
(ಠ᜗eಠ᜗ଡ଼΁eዚ૛
ᑑ˸ʿዚኜɛ )
ZL201980041854.5 Innovation September 17,
2019
July 14, 2023
30. Our Company Housing components for mechanical
equipment and robots (ಠ
᜗ଡ଼΁ձዚኜɛ )
ZL201980041853.0 Innovation September 17,
2019
January 23, 2024
31. Our Company Sensing circuit, logic circuit board, joint
control board, main controller board
and robot (e
ʿዚኜɛ )
ZL201980041894.X Innovation September 17,
2019
September 8,
2023
32. Our Company Object area measurement method,
device, equipment and
computer-readable storage medium
(eༀໄeண௪ʿ
ၑዚ̙ᛘπᎷʧሯ )
ZL201911383454.0 Innovation December 27,
2019
January 11, 2022
33. Rizhao
Yuejiang
Intelligence
Technology
Co., Ltd.
(˚๫̹൳
Ҧ
ʮ̡ )
(“Rizhao
Yuejiang ”)
A robot display method, device and
electronic equipment ( ɓ၇ዚኜɛ
eༀໄʿཥɿண௪ )
ZL201911379650.0 Innovation December 27,
2019
March 11, 2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 513 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
34. Our Company Robotic arm method, device, equipment,
system, storage medium and robotic
arm (eༀໄeண
௪eӻ୕eπᎷʧሯʿዚ૛ᑑ )
ZL202110581850.5 Innovation May 27, 2021 October 29, 2021
35. Our Company Robots and control methods, devices,
equipment, storage media, and
robotic arms ( ዚኜɛʿՉછՓ˙
eༀໄeண௪eπᎷʧሯeዚ૛
ᑑ)
ZL202211014994.3 Innovation August 23, 2022 July 18, 2023
36. Our Company Robotic arm obstacle avoidance method,
device, robotic arm and robot ( ዚ૛
eༀໄeዚ૛ᑑʿዚኜ
ɛ)
ZL202011463416.9 Innovation December 11,
2020
July 29, 2022
37. Our Company Robotic arm robot, obstacle avoidance
method and storage medium of robot
(ᒒღ˙
ʿπᎷʧሯ )
ZL202010627285.7 Innovation July 1, 2020 April 15, 2022
38. Our Company Robot obstacle avoidance method,
robotic arm robot and storage
medium (eዚ૛ᑑ
όዚኜɛʿπᎷʧሯ )
ZL202010627301.2 Innovation July 1, 2020 April 15, 2022
39. Our Company A robot collision detection method,
device, storage medium and robot
(eༀໄe
πᎷʧሯʿዚኜɛ )
ZL201811636935.3 Innovation December 29,
2018
November 3,
2020
40. Our Company Collaborative robotic arm and its motion
control method, collision detection
method and control system ( ՘Ъዚ
eຠᅜᏨ಻
eછՓӻ୕ )
ZL202211220131.1 Innovation September 30,
2022
May 7, 2024
41. Our Company A robot servo control device, apparatus
and robot (છՓ˙
eༀໄʿዚኜɛ )
ZL201811622861.8 Innovation December 28,
2018
April 23, 2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 514 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
42. Our Company Robot collision detection method,
device, equipment and
computer-readable storage medium
(eༀໄeண௪
ၑዚ̙ᛘπᎷʧሯ )
ZL201911383473.3 Innovation December 27,
2019
March 18, 2022
43. Our Company Robot trajectory reproduction method,
control device, equipment and
readable storage medium (ࠐ
eછՓༀໄeண௪ʿ̙
ᛘπᎷʧሯ )
ZL201911380760.9 Innovation December 27,
2019
May 25, 2021
44. Our Company Coffee latte art trajectory generation
method, coffee making method,
related equipment and system ( դਥ
eդਥႡЪ˙
ᗫண௪ʿӻ୕ )
ZL202211311541.7 Innovation October 25, 2022 August 18, 2023
45. Our Company A coffee latte art teaching system ( ɓ၇
ͪ઺ӻ୕ )
ZL202111443351.6 Innovation November 30,
2021
August 4, 2023
46. Our Company Teleoperation manipulator and its
spindle, teleoperation device ( Ⴧ዁Ъ
ዚ૛˓ʿՉ˴ൿeჇ዁Ъண௪ )
ZL202111185802.0 Innovation October 12, 2021 March 18, 2022
47. Our Company Teleoperation manipulator and its
transmission structure, teleoperation
equipment ( Ⴧ዁Ъዚ૛˓ʿՉෂਗ
ഐ࿴eჇ዁Ъண௪ )
ZL202111185803.5 Innovation October 12, 2021 September 30,
2022
48. Our Company Teleoperation manipulator and its
turntable, teleoperation equipment
(Ⴧ዁Ъዚ૛˓ʿՉᔷᓣeჇ዁Ъ
ண௪)
ZL202111185818.1 Innovation October 12, 2021 November 29,
2022
49. Our Company Teleoperation manipulator and
teleoperation equipment ( Ⴧ዁Ъ
ዚ૛˓ʿჇ዁Ъண௪ )
ZL202111185860.3 Innovation October 12, 2021 August 30, 2022
50. Our Company Teleoperation system, teleoperation
method and chip ( Ⴧ዁Ъӻ୕eჇ዁
˪ )
ZL202111176553.9 Innovation October 9, 2021 April 12, 2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 515 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement Date
51. Our Company A target position detection method
(ج)
ZL202010016602.1 Innovation January 8, 2020 June 2, 2020
52. Our Company Fruit stem positioning and fruit picking
methods, devices, robots and media
(eༀໄe
ዚኜɛʿʧሯ )
ZL202111179412.2 Innovation October 11, 2021 March 11, 2022
53. Our Company Three-dimensional target detection
method, detection device, terminal
equipment and computer-readable
storage medium ( ɧၪͦᅺᏨ಻˙
ၑዚ
̙ᛘπᎷʧሯ )
ZL201911383359.0 Innovation December 27,
2019
November 1,
2022
54. Our Company Object recognition and positioning
methods, devices and terminal
equipment (eༀ
ໄʿ୞၌ண௪ )
ZL201911380815.6 Innovation December 27,
2019
January 12, 2024
55. Our Company A teaching trajectory point collection
method, device, robotic arm, system
and medium (༦ᓃમණ˙
eༀໄeዚ૛ᑑeӻ୕ʿʧሯ )
ZL202111263269.5 Innovation October 28, 2021 March 18, 2022
56. Our Company Robot teaching trajectory reproduction
method, device and
computer-readable storage medium
(eༀໄʿ
ၑዚ̙ᛘπᎷʧሯ )
ZL202010590911.X Innovation June 24, 2020 January 11, 2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 516 ---
Domain Names
As of the Latest Practicable Date, we had registered the following domain names which we
considered to be material to our business:
No. Domain Name
Name of Registered
Proprietor Validity Period
1. www.dobot.cn Our Company December 10, 2013 –
December 10, 2026
2. www.dobot-robots.com Our Company October 10, 2022 –
October 10, 2025
3. www.dobot.cc Our Company March 20, 2015 –
March 20, 2025
Software Copyrights
As of the Latest Practicable Date, we had registered the following software copyrights which we
considered to be material to our business:
No. Software Name V ersion Owner Registration No. Date of Registration
1. Welding technology
software
V2.1.0 Our Company 2022SR0752116 June 14, 2022
2. DobotStudio Pro software V2.1.0 Our Company 2022SR0749907 June 14, 2022
3. Stacking process
software
V2.6.0 Our Company 2023SR0396223 March 27, 2023
4. Stacking visual
simulation software
V1.0.0 Our Company 2023SR1160250 September 26, 2023
5. 3D visual simulation
software
V1.0.0 Our Company 2023SR1160252 September 26, 2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 517 ---
3. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUPERVISORS
A. Particulars of Directors’ and Supervisors’ Contracts
Each of our Directors and Supervisors has entered into a service contract with our Company. Each
service contract is for an initial term of three years. The service contracts may be renewed in accordance
with the Articles and the applicable laws, rules and regulations.
Save as disclosed above, none of the Directors or Supervisors has or is proposed to enter into a
service contract with any member of our Group, other than contracts expiring or determinable by the
relevant employer within one year without the payment of compensation (other than statutory
compensation).
B. Remuneration of Directors and Supervisors
See “Directors, Supervisors and Senior Management” and Note 8 to the Accountants’ Report in
Appendix I to this prospectus for the remuneration or benefits in kind paid to our Directors and
Supervisors for each of the three years ended December 31, 2023 and the six months ended June 30, 2024.
During the Track Record Period, no fees were paid by our Group to any of the Directors or the five
highest paid individuals as an inducement to join us or as compensation for loss of office.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 518 ---
4. DISCLOSURE OF INTERESTS
A. Disclosure of Interests of Directors and Supervisors
Save as disclosed below, immediately following the completion of the Global Offering and the
Conversion of Domestic Shares into H Shares (assuming that the Over-allotment Option is not exercised),
none of our Directors or Supervisors has any interest and/or short position in the Shares, underlying
Shares and debentures of our Company or our associated corporations (within the meaning of Part XV of
the SFO) which will be required to be notified to our Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interest or short position which they were taken or
deemed to have under such provisions of the SFO) or which will be required, pursuant to section 352 of
the SFO, to be entered in the register referred to therein, or which will be required, pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing
Rules to be notified to our Company, once the H Shares are listed on the Stock Exchange.
As of the
Latest Practicable Date
Immediately following the completion of
the Global Offering and the Conversion of
Domestic Shares into H Shares (assuming
the Over-allotment Option is not exercised)
Name of Director
Our Company/
associated
corporation
Capacity/ nature of
interest
Number of
Domestic Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Number of
Shares
Description of
Shares
Approximate
percentage of
shareholding in
our Domestic
Shares/
H Shares (as
appropriate)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Mr. Liu (1) ..... O u r
Company
Beneficial owner,
interest in
controlled
corporation
111,889,006 31.08% 19,169,403
92,719,603
Domestic
Shares
H Shares
41.53%
26.20%
4.79%
23.18%
Mr. Lang Xulin
(؍....)
Our
Company
Beneficial owner 7,968,213 2.21% 1,593,643 Domestic
Shares
H Shares
3.45% 0.40%
6,374,570 1.80% 1.59%
(1) As of the Latest Practicable Date, Mr. Liu acted as the general partner of Yuejiang LP and Qinmo LP. Under the SFO,
Mr. Liu is deemed to be interested in the entire Shares held by Yuejiang LP and Qinmo LP.
Up to the Latest Practicable Date, none of the Directors or Supervisors or their respective spouses
and children under 18 years of age had been granted by our Company or had exercised any rights to
subscribe for shares or debentures of our Company or any of its associated corporations.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 519 ---
B. Substantial Shareholders
Save as disclosed in the section headed “Substantial Shareholders” in this prospectus, our Directors,
Supervisors or chief executive are not aware of any other person, not being a Director, Supervisor or chief
executive of our Company, who has an interest or short position in the Shares and underlying Shares of
our Company, which following the completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, would fall to be disclosed to our Company under the provisions of Divisions 2 an 3
of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting
Shares of our Company or any member of our Group.
C. Disclaimers
(1) None of our Directors or Supervisors has any direct or indirect interest in the promotion of our
Company, or in any assets which have within the two years immediately preceding the date of
this prospectus been acquired or disposed of by or leased to any member of our Group, or are
proposed to be acquired or disposed of by or leased to any member of our Group;
(2) None of our Directors or Supervisors is materially interested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the business of our
Group taken as a whole; and
(3) So far as is known to our Directors, none of our Directors, Supervisors, their respective close
associates (as defined under the Listing Rules) or Shareholders of our Company who are
interested in more than 5% of the issued share capital of our Company has any interests in the
five largest customers or the five largest suppliers of our Group.
5. OTHER INFORMATION
A. Estate Duty
Our Directors have been advised that no material liability for estate duty under the PRC laws is
likely to fall on our Company or its subsidiaries.
B. Litigation
As of the Latest Practicable Date, no member of our Group was engaged in any outstanding material
litigation or arbitration which may have material and adverse effect on the Global Offering and, so far as
our Directors are aware, no litigation or claim of material importance is pending or threatened by or
against any member of our Group.
C. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for the listing
of, and permission to deal in, our H Shares. The Joint Sponsors satisfy the independence criteria
applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
The Joint Sponsors will be paid by our Company a total fee of HK$6.5 million to act as the sponsors
in connection with the Listing.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 520 ---
D. Compliance Advisor
Our Company has appointed Guotai Junan Capital Limited as the compliance advisor upon the
Listing in compliance with Rule 3A.19 of the Listing Rules.
E. Preliminary Expenses
We have not incurred any material preliminary expenses.
F . Promoters
See “History and Corporate Structure—Our Company—Our Company’s Early Development” for
details of our promoters.
Within the two years immediately preceding the date of this prospectus, no cash, securities or other
benefit has been paid, allotted or given nor is any proposed to be paid, allotted or given to any promoters
in connection with the Global Offering and the related transactions described in this prospectus.
G. Qualification of Experts
The qualifications of the experts, as defined under the Listing Rules, who have given opinions in this
prospectus, are as follows:
Name Qualification
Guotai Junan Capital Limited Licensed corporation to conduct Type 6 (advising on corporate
finance) regulated activity as defined under the SFO
ABCI Capital Limited Licensed corporation to conduct Type 1 (dealing in securities)
and Type 6 (advising on corporate finance) regulated activities as
defined under the SFO
Ernst & Young Certified public accountants and public interest entity auditors
AllBright Law Offices
(Shenzhen)
PRC Legal Advisor
China Insights Industry
Consultancy Limited
Independent industry consultant
Holman Fenwick Willan LLP Legal advisor as to international sanctions laws
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 521 ---
H. Consents of Experts
Each of the experts named in “5. Other Information—G. Qualification of Experts” above has given
and has not withdrawn its written consent to the issue of this prospectus with the inclusion of its report
and/or letter and/or opinion and/or the references to its name included herein in the form and context in
which it is respectively included.
As of the Latest Practicable Date, none of the experts named above had any shareholding interests in
any member of our Group or the right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe.
I. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty if such sale,
purchase and transfer is effected on the H Share register of members of our Company, including in
circumstances where such transaction is effect on the Stock Exchange. For further information in relation
to taxation, see “Regulation Overview.”
J. No Material and Adverse Change
Our Directors confirm that there has been no material and adverse change in the financial or trading
position of our Group since June 30, 2024.
K. Binding Effect
This prospectus shall have the effect, if an application is made in pursuant hereof, of rendering all
persons concerned bound by all the provisions (other than the penal provisions) of sections 44A and 44B
of the Hong Kong Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as
applicable.
L. Related Party Transactions
Our Group entered into certain related party transactions within the two years immediately
preceding the date of this prospectus as mentioned in Note 38 to the Accountants’ Report in Appendix I to
this prospectus.
M. Restriction on Share Repurchases
See Appendix III to this prospectus for details.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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N. Miscellaneous
(1) Within the two years immediately preceding the date of this prospectus:
(i) save as disclosed in the section headed “History and Corporate Structure”, no share or
loan capital of our Group has been issued or agreed to be issued or is proposed to be fully
or partly paid either for cash or a consideration other than cash;
(ii) no share or loan capital of our Group is under option or is agreed conditionally or
unconditionally to be put under option;
(iii) save as disclosed in the section headed “Underwriting,” no commissions, discounts,
brokerages or other special terms have been granted or agreed to be granted in connection
with the issue or sale of any share of our Group; and
(iv) save as disclosed in the section headed “Underwriting,” no commission has been paid or
is payable for subscription, agreeing to subscribe, procuring subscription or agreeing to
procure subscription for any share in or debentures of our Company.
(2) There are no founder, management or deferred shares or any debentures in our Group.
(3) There has not been any interruption in the business of our Group which may have or has had a
significant effect on the financial position of our Group in the 12 months preceding the date of
this prospectus.
(4) Our Company has no outstanding convertible debt securities or debentures.
(5) There is no arrangement under which future dividends are waived or agreed to be waived.
(6) Save as disclosed in the section headed “History and Corporate Structure,” none of our equity
and debt securities is listed or dealt with in any other stock exchange nor is any listing or
permission to deal being or proposed to be sought.
(7) All necessary arrangements have been made to enable the H shares to be admitted into CCASS
for clearing and settlement.
(8) No company within our Group is presently listed on any stock exchange or traded on any
trading system.
O. 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).
APPENDIX IV 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:
(1) copies of the material contract referred to in “2. Further Information about Our Business—A.
Summary of Our Material Contract” in Appendix IV; and
(2) the written consents referred to in “5. Other information—H. Consents of Experts” in
Appendix IV .
2. DOCUMENTS A V AILABLE ON DISPLA Y
Copies of the following documents will be available on display on the websites of our Company at
www.dobot.cn (with respect to Chinese version) and www.dobot-robots.com (with respect to English
version) and on the website of the Stock Exchange at www.hkexnews.hk up to and including the date
which is 14 days from the date of this prospectus:
(1) the Articles of Association in Chinese;
(2) the Accountants’ Report from Ernst & Young, the text of which is set out in Appendix I;
(3) the audited consolidated financial statements of our Group for the three years ended December
31, 2023 and the six months ended June 30, 2024;
(4) the report from Ernst & Young relating to the unaudited pro forma financial information, the
text of which is set out in Appendix II;
(5) the material contract referred to in “2. Further Information about Our Business—A. Summary
of Our Material Contract” in Appendix IV;
(6) the written consents referred to in “5. Other information—H. Consents of Experts” in
Appendix IV;
(7) the contracts referred to in “3. Further Information about Our Directors and Supervisors—A.
Particulars of Directors’ and Supervisors’ Contracts” in Appendix IV;
(8) the legal opinions issued by AllBright Law Offices (Shenzhen), our PRC Legal Advisor, in
respect of certain general corporate matters and our Group’s business operations in the PRC;
(9) the PRC Company Law and the Trial Administrative Measures together with their unofficial
English translations;
(10) the industry report issued by China Insights Industry Consultancy Limited; and
(11) the legal opinion issued by Holman Fenwick Willan LLP in respect of certain international
sanctions matters.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND
A V AILABLE ON DISPLA Y
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