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If you are in any doubt about any of the contents of this prospectus, you should seek independent professional advice.
Zhonggan Communication (Group) Holdings Limited
中贛通信(集團)控股有限公司
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Number of Offer Shares : 160,000,000 Shares (subject to the Over-
allotment Option)
Number of Hong Kong Public Offer Shares : 16,000,000 Shares (subject to reallocation)
Number of International Placing Shares : 144,000,000 Shares (subject to the Over-
allotment Option and reallocation)
Offer Price : Not more than HK$1.25 per Offer Share and
expected to be not less than HK$1.13 per
Offer 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)
Nominal value : HK$0.1 per Share
Stock code : 2545
Sole Sponsor
⳪暲@:9)
Sole Overall Coordinator, Sole Global Coordinator,
Joint Bookrunner and Joint Lead Manager
⳪暲@:9)
Joint Bookrunners and Joint Lead Managers
Joint Lead Managers
A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Documents Delivered to the Registrar of Companies and Available on Display – A.
Documents delivered to the Registrar of Companies ’’ in Appendix VI 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 and the Re gistrar of Companies in Hong
Kong take no responsibility as to the contents of this prospectus or any other documents referred to above. Hong Kong Exchanges and Clearing Limited, T he Stock Exchange of Hong Kong
Limited and Hong Kong Securities Clearing Company Limited take no respons ibility for the contents of this prospect us, make no representation as to it s accuracy or completeness and
expressly disclaim any liability whatsoever for any loss howsoever arising f rom or in reliance upon the whole or any part of the contents of this prospe ctus.
The Offer Price is expected to be fixed by agreement between the Sole Overall Coordinator and the Sole Global Coordi nator (for itself and on behalf of th e Underwriters) and the Company on
or around Friday, 28 June 2024. If, for any reason, the Sole Overall Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwr iters) and the Company are unable to
reach an agreement on the Offer Price by 12:00 noon on Friday, 28 June 2024, the Global Offering will not become unconditional and will lapse immediatel y. The Offer Price will be not more
than HK$1.25 per Offer Share and is currently expected to be not less than HK$1.13 per Offer Share unless otherwise announced not later than the morning of the last day for lodging
applications under the Hong Kong Public Offer. The Sole Overall Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwrit ers) may, with the consent of the
Company, reduce the number of Offer Shares being offered under the Global Offering and/or the indicative Offer Price range stated in this prospectus a t any time on or prior to the morning of
the last day for lodging applications under the Hong Kong Public Offer. In such case, a notice of the reduction in the number of Offer Shares being offere d under the Global Offering and/or of
the indicative Offer Price range will be published on the Stock Exchange ’s website at www.hkexnews.hk and the Company ’s website at www.gantongjt.com not later than the morning of the
last day for lodging applications under the Hong Kong Public Offer. Further details are set out in the sections headed ‘‘Structure and Conditions of the Global Offering ’’and ‘‘How to Apply for the
Hong Kong Public Offer Shares ’’in this prospectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in the section headed
‘‘Risk Factors ’’in this prospectus.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Public Offer Shares, the Sole Ove rall Coordinator and the Sole Global
Coordinator (for itself and on behalf of the Hong Kong Underwriters) shall ha ve the right in certain circumstances to terminate the Hong Kong Underwri ting Agreement by notice in writing to the
Company at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date (which is currently expected to be Wednesday, 3 July 2024). Further details of the terms of the termination
provisions are set out in the paragraph headed ‘‘Underwriting – Underwriting arrangements and expenses – The Hong Kong Public Offer – Grounds for termination ’’ in this prospectus. 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 law in the United States and may not be offe red, sold, pledged or transferred
within the United States or to, or for the account or benefit of US persons, except pursuant to an exemption from, or in a transaction not subject to, the r egistration requirement under the U.S.
Securities Act.
No information on any website forms part of this prospectus.
ATTENTION
The Company has adopted a fully electronic applicatio n process for the Hong Kong Public Offer. The Company will not provide printed copies of this pros pectus to the public
in relation to the Hong Kong Public Offer. This prosp ectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the Group ’s website at
www.gantongjt.com. If you require a printed copy of this prospectus, you may download and print from the website addresses above.
21 June 2024
IMPORTANT


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
The Company has adopted a fully electronic application process for the Hong Kong
Public Offer and below are the p rocedures 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 the Group ’s
website at www.gantongjt.com . If you require a printed copy of this prospectus, you may
download and print from the website addresses above.
T o apply for Hong Kong Public Offer Shares, you may:
(1) apply online through the HK eIPO White Form s e r v i c ei nt h eIPO App (which can
be downloaded by searching ‘‘IPO App ’’ in App Store or Google Play or
downloaded at www.hkeipo.hk/IPOApp or www.tricorglobal.com/IPOApp )o ra t
www.hkeipo.hk ;o r
(2) apply through the HKSCC EIPO channel to electronically cause HKSCC Nominees
to apply on your behalf, by instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via HKSCC ’s FINI system to
apply for Hong Kong Public Offer Shares on your behalf.
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.
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 the Hong Kong Public Offer
Shares ’’ in this prospectus for further details of the procedures through which you can apply
for the Hong Kong Public Offe r Shares electronically.
IMPORTANT


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Your application through the HK eIPO White Form service or the HKSCC EIPO channel
must be for a minimum of 2,000 Hong Kong Public Offer Shares and in one of the numbers
set out in the table. If you are applying through the HK eIPO White Form service, you may
refer to the table below for the amount payable for the number of Shares you have selected.
You must pay the respective maximum amount pa y a b l eo na p p l i c a t i o ni nf u l lu p o na p p l i c a t i o n
for Hong Kong Public Offer Shares. 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.
No. of Hong Kong
Public Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Public Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Public Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
No. of Hong Kong
Public Offer Shares
applied for
Maximum Amount
payable (2) on
application/
successful allotment
HK$ HK$ HK$ HK$
2,000 2,525.21 40,000 50,504.26 600,000 757,563.76 3,300,000 4,166,600.63
4,000 5,050.43 50,000 63,130.31 700,000 883,824.38 3,600,000 4,545,382.50
6,000 7,575.63 60,000 75,756.38 800,000 1,010,085.00 3,900,000 4,924,164.38
8,000 10,100.86 70,000 88,382.43 900,000 1,136,345.63 4,500,000 5,681,728.13
10,000 12,626.07 80,000 101,008.50 1,200,000 1,515,127.50 5,100,000 6,439,291.88
12,000 15,151.28 90,000 113,634.57 1,500,000 1,893,909.38 5,700,000 7,196,855.63
14,000 17,676.49 100,000 126,260.63 1,800,000 2,272,691.26 6,300,000 7,954,419.38
16,000 20,201.70 200,000 252,521.26 2,100,000 2,651,473.13 7,000,000 8,838,243.76
18,000 22,726.91 300,000 378,781.88 2,400,000 3,030,255.00 8,000,000
(1) 10,100,850.00
20,000 25,252.13 400,000 505,042.50 2,700,000 3,409,036.88
30,000 37,878.19 500,000 631,303.13 3,000,000 3,787,818.76
(1) Maximum number of the Hong Kong Public Offer Shares you may apply for and this is 50% of the Hong
Kong Public Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the AFRC transaction levy and the
Stock Exchange trading fee. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form Service Provider) while
the SFC transaction levy, the Stock Exchange tradi ng fee and AFRC transaction levy will be paid to the
SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of the Hong Kong Public Offer Shares will be
considered and any such application is liable to be rejected.
IMPORTANT


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If there is any change in the following expected timetable, the Company will issue a
separate announcement on the Stock Exchange ’sw e b s i t ea t www.hkexnews.hk and the
Company ’s website at www.gantongjt.com .
Date and time (1)
H o n gK o n gP u b l i cO f f e rc o m m e n c e s ............................... 9 : 0 0a . m .o n
Friday, 21 June 2024
Latest time for completing electronic applications under the
HK eIPO White Form service through (2) :
(1) the IPO App , which can be downloaded by searching
‘‘IPO App ’’in App Store or Google Play or downloaded at
www.hkeipo.hk/IPOApp or www.tricorglobal.com/IPOApp
(2) the designated website at www.hkeipo.hk .........................1 1 : 3 0a . m .o n
Thursday, 27 June 2024
Application Lists open (3) ....................................... 1 1 : 4 5a . m .o n
Thursday, 27 June 2024
Latest time for (a) completing payment of HK eIPO White Form
applications by effecting internet banking transfer(s) or
PPS payment transfer(s) and (b) giving
electronic application instructions to HKSCC (4) ...................1 2 : 0 0n o o no n
Thursday, 27 June 2024
If you are instructing your broker or custodian who is a HKSCC Participant to give electronic
application instructions via HKSCC ’s FINI System to apply for the Hong Kong Public Offer
Shares on your behalf, you are advised to contact your broker or custodian for the latest time
for giving such instructions w hich may be different from the latest time as stated above.
Application Lists close (3) ......................................1 2 : 0 0n o o no n
Thursday, 27 June 2024
Expected Price Determination Date (5) ........................ F r i d a y ,2 8J u n e2 0 2 4
Announcement of the final Offer Price, the level of indication of
interest in the International Placing, the level of applications
in the Hong Kong Public Offer a nd the basis of allocation of
the Hong Kong Public Offer Shares to be published
on the Stock Exchange ’s website at www.hkexnews.hk and
the Company ’s website at www.gantongjt.com
o no rb e f o r e ....................................... T u e s d a y ,2J u l y2 0 2 4
EXPECTED TIMETABLE
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Date and time (1)
Results of allocations under the Hong Kong Public Offer,
(with identification documents numbers
of successful applicants (where applicable)) to be available through
a variety of channels as described in the paragraphs headed
‘‘How to Apply for the Hong Kong Public Offer Shares –
B. Publication of Results ’’in this prospectus, including:
(1) in the announcement to be published on
the Stock Exchange ’s website at www.hkexnews.hk and
the Company ’s website at www.gantongjt.com f r o m ............. T u e s d a y ,2J u l y2 0 2 4
(2) from the results of allocations in the Hong Kong
Public Offer to be available at the ‘‘IPO Results ’’function
in the IPO App or at www.hkeipo.hk/IPOResult
or www.tricor.com.hk/ipo/result
with a ‘‘search by ID ’’f u n c t i o nf r o m ...............................1 1 : 0 0p . m .o n
Tuesday, 2 July 2024
to 12:00 midnight on
Monday, 8 July 2024
(3) from the allocation results telephone enquiry by calling
+852 3691 8488 between 9:00 a.m. and 6:00 p.m. from. . . . . . . . Wednesday, 3 July 2024,
to Monday, 8 July 2024
on a business day
Despatch of Share certificates or deposit of Share certificates
into CCASS in respect of wholly or pa rtially successful applications
pursuant to the Hong Kong Public Offer on or before (6, 7, 8 and 10) .... T u e s d a y ,2J u l y2 0 2 4
Despatch of refund cheques or HK eIPO White Form
e-Auto Refund payment instructions in respect of wholly or
partially successful applications if the final Offer Price
is less than the price payable on application
(if applicable) or wholly or partially unsuccessful applications
pursuant to the Hong Kong Public Offer on or before
(7 to 10) ...... W e d n e s d a y ,3J u l y2 0 2 4
Dealing in the Shares on the Stock Exchange expected to
c o m m e n c ea t9 : 0 0a . m .o n............................ W e d n e s d a y ,3J u l y2 0 2 4
Notes:
1. All dates and times refer to Hong Kong local time, except as otherwise stated. Details of the structure of the
Global Offering, including its conditions, are set out in the section headed ‘‘Structure and Conditions of the Global
Offering ’’in this prospectus.
EXPECTED TIMETABLE
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2. You will not be permitted to submit your application to the HK eIPO White Form service through the IPO App or
the designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained a payment reference number from the IPO App or the designated
website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
the application monies) until 12:00 noon on the last day fo r submitting applications, when the Application Lists
close.
3. If there is/are a ‘‘black ’’ rainstorm warning, a tropical cyclone war ning signal number 8 or above and/or Extreme
Conditions caused by a super typhoon in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on
Thursday, 27 June 2024, the Application Lists will not open and close on that day. Further information is set out in
the paragraphs headed ‘‘How to Apply for the Hong Kong Public Offer Shares – E. Severe Weather Arrangements ’’
in this prospectus.
4. Applicants who apply for the Hong Kong Public Offer Shares by giving electronic application instructions to
HKSCC through HKSCC EIPO channel should refer to the paragraphs headed ‘‘How to Apply for the Hong Kong
Public Offer Shares – A. Application for Hong Kong Public Offer Shares – 2. Application Channels ’’ in this
prospectus.
5. The Price Determination Date is expected to be on or around Friday, 28 June 2024, or such other day as may be
agreed by the Sole Overall Coordinator and the Sole Global Coordinator (for itself and on behalf of the
Underwriters) and the Company. If, for any reason, the Offer Price is not agreed by the Company and the Sole
Overall Coordinator and the Sole Global Coordinator (fo r itself and on behalf of the Underwriters) by 12:00 noon
on Friday, 28 June 2024, the Global Offering (including the Hong Kong Public Offer) will not proceed and will lapse
immediately.
6. Share certificates will only become valid evidence of title provided that, no later than 8:00 a.m. on the Listing Date,
the Global Offering has become unconditional and none of the Underwriting Agreements has been terminated in
accordance with their respective terms.
7. Applicants who apply through the HK eIPO White Form service for 1,000,000 Hong Kong Public Offer Shares or
more under the Hong Kong Public Offer may collect Share certificates in person from the Hong Kong Share
Registrar, Tricor Investor Services Limited at 17/F , Fa r East Finance Centre, 16 Harcourt Road, Hong Kong, from
9:00 a.m. to 1:00 p.m. on Wednesday, 3 July 2024 or such other date as announced notified by the Company.
Applicants being individuals who are eligible for personal collection must not authorise any other person(s) to
make collection on their behalf. If you are a corporate applicant which is eligible for personal collection, your
authorised representative must bear a letter of authorisati on from your corporation stamped with your corporation ’s
chop. Both individual and authorised representatives must produce, at the time of collection, evidence of identity
acceptable to the Hong Kong Share Registrar.
8. Applicants who have applied for Hong Kong Public Offer Shares through the HKSCC EIPO channel should refer to
the paragraphs headed ‘‘How to Apply for the Hong Kong Public Offer Shares – D. Despatch/collection of Share
certificates and refund of application monies ’’in this prospectus for details.
9. Applicants who have applied through the HK eIPO White Form service and paid their applications monies through
single bank accounts may have refund monies (if any) despatched to that bank account in the form of e-Auto
Refund payment instructions. App licants who have applied through the HK eIPO White Form service and paid
their application monies through multiple bank accounts may have refund monies (if any) despatched to the
address as specified in their applicat ion instructions in the form of refund cheques in favour of the applicant (or, in
the case of joint applications, the first-named applicant) by ordinary post at their own risk.
10. Share certificates and/or refund cheques for applicants who have applied for less than 1,000,000 Hong Kong
Public Offer Shares and any uncollected Share certifi cates and refund cheques (if any) will be despatched by
ordinary post (at the applicants ’ own risk) to the addresses specified i n the relevant applications. Further
information is set out in the paragraphs headed ‘‘How to Apply for the Hong Kong Public Offer Shares – D.
Despatch/collection of Share certif icates and refund of application monies ’’in this prospectus.
Particulars of the structure of the Global Offering, including the conditions thereto,
are set out in the section headed ‘‘Structure and Conditions of the Global Offering ’’in this
prospectus.
EXPECTED TIMETABLE
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by the Company solely in connection with the Hong Kong
Public Offer and the Hong Kong Public Offer Shares and does not constitute an offer to sell or
a solicitation of an offer to buy any securities other than the Hong Kong Public Offer Shares
offered by this prospectus pursuant to the Hong Kong Public Offer. This prospectus may not
be used for the purpose of, and does not constitute, an offer to sell, or a solicitation of an
offer to buy any securities 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
the 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 the
applicable securities laws of such jurisdictions pursuant to registration with or authorisation by
the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Company has not authorised anyone to provide you with different
information. Any information or representation not made in this prospectus must not be relied
on by you as having been authorised by the Company, the Sole Sponsor, the Sole Overall
Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, any of their respective directors or any other person or party involved in the
Global Offering.
Page
Expected Timetable ................................................................. i
Contents ........................................................................... i v
Summary ........................................................................... 1
Definitions ......................................................................... 1 5
Glossary of Technical Terms ........................................................ 3 0
Forward-looking Statements ........................................................ 3 5
Risk Factors ........................................................................ 3 7
Waivers from Strict Compliance with Listing Rules ................................. 6 6
Information about this Prospectus and the Global Offering .......................... 6 9
Directors and Parties Involved in the Global Offering ............................... 7 4
Corporate Information .............................................................. 8 3
Industry Overview .................................................................. 8 5
CONTENTS
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Page
Regulatory Overview ............................................................... 1 0 5
History and Reorganisation ......................................................... 1 1 5
Business ........................................................................... 1 5 0
Relationship with Controlling Shareholders ......................................... 2 8 8
Directors and Senior Management .................................................. 2 9 3
Share Capital ....................................................................... 3 0 8
Substantial Shareholders ........................................................... 3 1 1
Financial Information ............................................................... 3 1 2
Future Plans and Use of Proceeds .................................................. 3 8 6
Underwriting ....................................................................... 3 9 0
Structure and Conditions of the Global Offering .................................... 4 0 2
How to Apply for the Hong Kong Public Offer Shares ............................... 4 1 3
Appendix I – Accountants ’ Report .............................................. I - 1
Appendix II – Unaudited Pro Forma Financial Information ....................... I I - 1
Appendix III – Property Valuation Report ......................................... III-1
Appendix IV – Summary of the Constitution of the Company and
Cayman Islands Companies Act ................................. I V - 1
Appendix V – Statutory and General Information ................................ V - 1
Appendix VI – Documents Delivered to the Registrar of Companies
and Available on Display ........................................ V I - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this prospectus.
Since this is a summary, it does not contain all th e information that may be important to you, and
is qualified in its entirety by, and should be read in conjunction with, the full text of this
prospectus. You should read this prospectus in its entirety including the appendices hereto
before you decide to invest in the Offer Shares. There are risks associated with any investment.
Some of the particular risks in investing in the Offer Shares are set out in the section headed
‘‘Risk Factors ’’ in this prospectus. You should read that section carefully before you decide to
invest in the Offer Shares.
OVERVIEW
Established in 2002, the Group is a reputable int egrated service provider and software
developer headquartered in Jiangxi Province of the PRC and focuses on the provision of
T elecommunications Infrastructure Services and Di gitalisation Solution Services in the PRC. Since
its founding, the Group has established long and stable business relationships with the key players
in the telecommunications industry in the PRC including the Big Three, being the three largest
telecommunications network operators in the PRC, and the largest telecommunications tower
infrastructure service provider in the world. Acc ording to the Ipsos Report, the Group ranked third
amongst all telecommunications network infrastr ucture construction and maintenance services
providers in Jiangxi Province in terms of rev enue in 2023, with a market share of approximately
3.1%. As at the Latest Practicable Date, the G roup has expanded its operations to 25 provinces,
municipalities and autonomous regions across the PRC.
PRINCIPAL SERVICES AND BUSINESS MODEL
Telecommunications In frastructure Services
T elecommunications Infrastructure Services cons ist of Infrastructure Construction Services and
Infrastructure Maintenance Services, which are utilised by key market players in the
telecommunications industry in the PRC to ex pand and maintain their telecommunications
networks. Such key players include telecommuni cations network operators, telecommunications
tower infrastructure service providers, local gov ernments, quasi-government institutions and state-
owned enterprises.
 Infrastructure Construction Services ma inly involve the construction, adaptation and
installation works of network infrastructure along the entire telecommunications network,
such as base stations and auxiliary facilities engineering services, power grid connection
services, cable installation services, access network related services and wireless
network equipment installation services.
 Infrastructure Maintenance Services mainly involve carrying out routine basic
maintenance, repairs and restoration w orks and emergency trouble shooting to the
telecommunications infrastructure locate d across rural and urban areas in the PRC.
The following chart summarises the Group ’s principal business activities and business model
in relation to its T elecommunications Infr astructure Services business segment:



Suppliers for labour and ancillary construction materials
Telecommunications Infrastructure Services



Infrastructure Construction
Services


Infrastructure Maintenance Services
The Group
Suppliers
Installation of
telecommunications
equipment provided
by customers
Construction of
telecommunications
network
infrastructure
Procurement of
labour and
ancillary
construction
materials
Project supervision and management
and quality control
Provision of
maintenance, repairs
and emergency
support services
Procurement of
labour and
ancillary
construction
materials
Project supervision and management
and quality control
Telecommunications network operators / telecommunications tower infrastructure service providers / local governments / quasi-government
institutions / state-owned enterprisesCustomers
SUMMARY
– 1 –


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The Group ’s customers in T elecommunications Infrastructure Services business segment
during the Track Record Period primarily compri sed key players in the PRC telecommunications
industry such as telecommunications network operators and telecommunications tower
infrastructure service providers who would contract telecommunications infrastructure construction
and maintenance works to the Group. The Group generally acts as the main contractor as well as
the sole contractor for its T elecommunications Infras tructure Services projects, which are typically
obtained on a project-by-project basis. During the Track Record Period, the Group ’s suppliers in
relation to its T elecommunications Infrastructu re Services business segm ent mainly consisted of
labour suppliers who would supply labour services for c ompleting the on-site labour intensive works
and provide ancillary construction materials requi red, while the Group would remain responsible for
the core aspects of the projects such as overall project management and implementation, testing
and inspection as well as quality control. The engagement of labour suppliers by the Group does
not constitute subcontracting in nature, and th e labour suppliers are not considered as the Group ’s
subcontractors, reasons for which are set out in the paragraph headed ‘‘Business – Suppliers –
Labour suppliers ’’in this prospectus. Due to the specialised equipment and materials needed for the
construction of network infrastructure as well as the need to meet specific technical requirements
and ensure compatibility with their exi sting infrastructure, the Group ’s customers would generally be
responsible for providing the necessary telecommunications equipment.
In respect of the Group ’s pricing policy, it generally adopts a cost-plus pricing model when
determining its bid/offer price quoted in the tender documents for its T elecommunications
Infrastructure Services projects after taking into account factors such as (i) the nature, scale,
complexity and location of the relevant projects as well as (ii) the estimated costs for the
procurement of labour services and ancillary construction materials.
Digitalisation Solution Services
Digitalisation Solution Servi ces consist of Integrated Solution Services, System Maintenance
Services and Software Solution Services, and aim to improve the operational efficiency and
productivity of its customers through incorporatin g digital technologies such as IoT , cloud computing,
big data, discriminative AI and blockchain to enable the integration of various hardware and
software systems under a unified platform.
 Integrated Solution Services generally invol ve providing turnkey solutions through (i)
system design planning; (ii) supply of har dware and software and installation and
integration services; and (iii) provision of after-sale services such as technical support
services, which primarily invo lve provision of a comprehensive digitalisation solution that
includes all the necessary hardware and software components in a single package. The
hardware is sourced from approved third-party suppliers, while the software consists of
both self-developed software and software sourced from approved third-party suppliers.
The self-developed software includes ready-t o-use software and customised software
designed specifically for customers, typically developed by the Group ’s research and
development team, sometimes with the a ssistance of third-party programmers.
 System Maintenance Services mainly inc luded commissioned technical support and
maintenance services for the hardware and software systems delivered under its
Integrated Solution Services projects. Depending on the specific requirements of the
customers, the System Maintenance Services generally include (i) day-to-day system and
network maintenance and data back-up suppor t services; (ii) 24/7 technical support and
consulting services; (iii) system migration s olution services; and (iv) emergency trouble
shooting services.
 Software Solution Services focus on (i) sale o f self-developed software; and (ii) delivering
customised software development services . The Group has the capability to offer its self-
developed software and/or deliver customised software development services, sometimes
with the assistance of third-party software programmers, which suit the needs of end-
users across various sectors, such as digi tal healthcare, digital government, digital
industrial and digital telec ommunications construction.
SUMMARY
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Set out below are the key sectors on which the Group ’s Digitalisation Solution Services
projects focused during the Track Record Period:
Digital
healthcare
Digital
education
Digital
surveillance
Digital
government
Digital
industrial
management
Digital urban
management
The following chart summaries the Group ’s principal business activities and business model in
relation to its Digitalisation Sol ution Services business segment:


Integrated Solution Services
Digitalisation Solution Services
Software Solution Services

System Maintenance
Services
The Group
Integrated Solution Services
Suppliers for hardware, third-party software
and technical support services (if needed)
Suppliers for technical support
and maintenance services (if needed)
Procurement of hardware
and third-party
software (if needed)
Project supervision and management
and quality control
Provision of system design planning, installation
and integration services of hardware and
software systems and technical support services
Telecommunications network operators / local governments / quasi-government institutions / state-owned enterprises / private companies
Project supervision and management
and quality control Provision of software system integration
and technical support services
Research and development
Project supervision and management
and quality control
Research and
development
Customised
development of
software
Sale of self-developed
software/Customised
development of
software
Provision of technical support and maintenance
services for hardware and software systems Sale of
self-developed
software
Suppliers
Customers
The Group ’s research and development efforts have largely driven the increase in significance of its
Digitalisation Solution Services business segment, particularly for those involving the use of the Group ’ss e l f -
developed software, to the Group ’s operational results. The technologies developed as a result of the Group ’s
research and development efforts were applied and/or adopted for developing the software systems required
by its customers under the Integrated Solution Services projects and Software Solution Services projects. For
further details of the Group ’s research and development efforts, please refer to the paragraphs headed
‘‘Business – Research and development ’’in this prospectus.
The Group ’s customers in Digitalisation Solution Services mainly included not only
telecommunications network operators but also loca l governments, quasi-gover nment institutions,
state-owned enterprises and private c ompanies in the PRC whereas the Group ’s suppliers for this
business segment mainly consisted of hardware and software suppliers who would supply hardware
such as surveillance cameras, biometric scanners, computers, data storage and processing system,
third-party software and/or technical support and maintenance services.
In respect of the Group ’s pricing policy for Digitalisation So lution Services, it generally takes
into account the estimated prices its customers are willing to pay and other factors such as (i) in
relation to the Group ’ s Integrated Solution Services projec ts only, the estimated costs for the
procurement of hardware and third-party software system, (ii) (if applicable) the relevant research
and development expenses incurred, (iii) the scale and timeframe required, (iv) the credit term
required by its customers, and (v) the contract prices of the Group ’s similar projects.
SUMMARY
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REVENUE AND GROSS PROFIT MARGIN
The following table sets out a breakdown of the Group ’s total revenue and gross profit margin
by business segments during the Track Record Period:
Year ended 31 December
2021 2022 2023
Revenue
Percentage
of total
Gross
profit
margin Revenue
Percentage
of total
Gross
profit
margin Revenue
Percentage
of total
Gross
profit
margin
RMB’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– Infrastructure Construction Services . . . . . . . . . . . . . . . . 344,631 71.9% 12.2% 309,276 74.9% 12.0% 463,367 76.1% 14.0%
– Infrastructure Maintenance Services . . . . . . . . . . . . . . . . 25,160 5.3% 17.5% 33,224 8.0% 17.7% 37,990 6.2% 24.1%
S u b - t o t a l ................................. 369,791 77.2% 12.5% 342,501 82.9% 12.5% 501,357 82.3% 14.8%
Digitalisation Solution Services
– Integrated Solution Services . . . . . . . . . . . . . . . . . . . . 107,364 22.4% 41.5% 10,148 2.5% 25.4% 41,258 6.7% 31.7%
– System Maintenance Services . . . . . . . . . . . . . . . . . . . 1,963 0.4% 15.6% 2,044 0.5% 19.1% 470 0.1% 37.9%
– S o f t w a r eS o l u t i o nS e r v i c e s..................... ––– 58,399 14.1% 99.0% 66,216 10.9% 93.5%
S u b - t o t a l ................................. 109,327 22.8% 41.1% 70,591 17.1% 86.1% 107,944 17.7% 69.6%
Total.................................... 479,118 100.0% 19.0% 413,091 100.0% 25.1% 609,301 100.0% 24.5%
Revenue
The Group ’s revenue during the Track Record Perio d was primarily generated from the
T elecommunications Infrastructure Services busi ness segment, in particular, its Infrastructure
Construction Services business sub-segment, fo r which its revenue accounted for approximately
72.0% and 74.9% and 76.1% of the Group ’s total revenue, respectively, whereas the revenue from
the Digitalisation Solution Services busines s segment accounted for approximately 22.8%, 17.1%
and 17.7% of its total revenue, respectively. Overall, the Group ’s total revenue increased at a CAGR
of approximately 12.8% over the period from 2021 to 2023.
The Group ’s total revenue decreased by approximat ely RMB66.0 million or 13.8% from the
year ended 31 December 2021 to the year ended 31 December 2022 primarily driven by the
Group’s prioritisation of Software S olution Services projects over Integrated Solution Services
projects to align with customers ’ demand and alleviate the need for substantial capital requirements,
thereby enhancing the Group ’s liquidity. However, such decrease was partially offset by the increase
in the number of Software Solution Services proje cts, resulting in a significant increase in revenue
from 2021 to 2022. The decrease in number of Infrastr ucture Construction Services projects had
also to a certain extent contributed to the decrease in the Group ’s total revenue in 2022. The
Group’s revenue significantly increased by approxim ately RMB196.2 million or 47.5% from the year
ended 31 December 2022 to the year ended 31 December 2023 primarily driven by (i) increase in
revenue recognition for Infrastructure Construc tion Services business segment due to improvement
in number of work orders placed by customers follow ing the lifting of restrictions imposed by the
COVID-19 pandemic as well as acceleration in pr ogress of the projects for this business sub-
segment; and (ii) increase in revenue for Digitalis ation Solution Services business segment as a
result of an increase in both the number of Integrated Solution Services projects and Software
Solution Services projects.
Gross profit margin
The gross profit margin of the Digitalisation Solution Services business segment was relatively
higher than that of the T elecommunications Infrastructure Services business segment during the
Track Record Period mainly due to the fact that (i) the cost of sales was generally lower as a result
of such projects being less labour intensive and having a relatively shorter project life cycle; and (ii)
the projects were generally obtained via singl e-source procurement and/or by responding to
invitation to quote and required a higher degree of cu stomisation by the Group thus leaving more
room for the Group to charge at a higher price. On the other hand, the gross profit margin of the
Infrastructure Construction Services business sub-segment was generally the lowest during the
Track Record Period as the projects were (i) l abour intensive and (ii) mainly obtained by way of
open tender which would restrict the Group ’s ability in setting a high tender price due to the
competitive nature of open tenders as they would be made available to all of the Group ’s
competitors. The Group ’s overall gross profit margin for the years ended 31 December 2021, 2022
and 2023 was approximately 19.0%, 25.1% and 24.5%, respectively.
SUMMARY
– 4 –


--- page 14 ---
The Group ’s overall gross profit margin increased from the year ended 31 December 2021 to the year
ended 31 December 2022 primarily due to an increase in the gross profit margins of its Digitalisation Solution
Services business segment, which reflected the Group ’s prioritisation of Software Solution Services projects
over Integrated Solution Services projects, which resulted in higher gross profit margin due to the minimal
costs involved in the projects, as most of the software applied in Software Solution Services was developed
by the Group, and the Group recognised and classified the costs associated with research and development
for the software as research and development expenses for the relevant years. The Group ’s overall gross
profit margin slightly decreased from the year ended 31 December 2022 to the year ended 31 December
2023 primarily due to the decrease in the gross profit margin of the Digitalisation Solution Services business
segment, which is mainly attributable to the increased contribution of the Integrated Solution Services
business sub-segment, being a sub-segment within the D igitalisation Solution Services business segment
having a relatively lower gross profit margin. For details, please refer to the paragraphs headed ‘‘Financial
Information – Description of selected items in the consolidated statements of profit or loss – Gross profit and
gross profit margin ’’ and the paragraph headed ‘‘Financial Information – Review of historical results of
operations ’’in this prospectus.
PROJECT BACKLOG
The Group ’s project backlog represents its estimate of the total outstanding contract value of
its On-going Projects and Pre-revenue Projec ts (assuming that all works under the relevant
contracts are required to be carried out) as at 31 December 2021, 2022 and 2023 and the Latest
Practicable Date. It is important to note that whil e the contract value stated in the framework
agreement of its T elecommunications Infrastruc ture Services projects represents the maximum
value of potential orders from customers, customers are not obligated to place work orders up to
the contract value. They have the discretion to reduce the work scope by not placing additional
work orders. As such, the contract value used in calculating the Group ’s project backlog has not
taken into account factors that could potentially lead to a reduction in work scope at the customers ’
discretion, which in turn reducing the final amount of revenue to be recognised. For the years ended
31 December 2021, 2022 and 2023, the conversion rate of contract value into actualised work
orders was approximately 66.2%, 68.2% and 72.2% , respectively, for the T elecommunications
Infrastructure Services projec ts, and approximately 100.0%, 100.0% and 98.5%, respectively, for the
Digitalisation Solution Services projects. As a t the Latest Practicable Date, the closing balance of
the Group ’s backlog was approximately RMB819.4 million, co ntributed primarily by the Infrastructure
Construction Services projects. For details, please refer to the paragraph headed ‘‘Business –
Projects – Project backlog ’’in this prospectus.
NUMBER OF PROJECTS
The services provided by the Group during the Tr ack Record Period were generally offered on
a project-by-project basis with no long-term c ommitments from its customers to further engage the
Group for similar related types of work. As at 31 December 2021, 2022 and 2023 and the Latest
Practicable Date, the Group had a total of 101, 148, 116 and 130 projects on hand, respectively,
comprising primarily the Infrastructure Constructi on Services projects. For details, please refer to
the paragraphs headed ‘‘Business – Projects’’ and ‘‘Financial Information – Key factors affecting
results of operations – Non-recurring nature of the Group ’sp r o j e c t s’’in this prospectus.
TENDER SUCCESS RATE
During the Track Record Period, the T elecommunications Infrastructure Services projects were
generally awarded by way of open tender whereby any eligible service provider could submit a
tender to provide the services required by the customer, whereas the Digitalisation Solution
Services projects were generally secured by way of single-source procurement or responding to
invitation to quote whereby the customers would approach the Group to directly seek terms and
obtain a quote, and may negotiate for mutually agreed contract terms. The following table sets out
the Group ’s tender success rate for T elecommunications Infrastructure Services projects during the
Track Record Period:
Year ended 31 December
2021 2022 2023
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s.......................... 1 8 . 9 % 2 0 . 6 % 1 9 . 9 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s.......................... 4 4 . 0 % 3 9 . 4 % 4 1 . 2 %
Overall tender success rate ............................... 2 0 . 6 % 2 2 . 5 % 2 1 . 3 %
Note: The tender success rate for a particular year is calculated based on the number of tenders awarded to the Group
(whether awarded in the same year or subsequently) divided by the number of tenders submitted during that year.
SUMMARY
– 5 –


--- page 15 ---
FIVE LARGEST CUSTOMERS
The Group ’s revenue attributable to its five larges t customers in each year during the Track
Record Period amounted to approximately RMB 476.3 million, RMB409.9 million and RMB592.3
million, representing approximately 99.4%, 99.2% and 97.2% of its total revenue, respectively, while
the revenue attributable to the largest custome r of the Group in each year during the Track Record
Period, namely Customer A, accounted for approximately 69.5%, 57.5% and 48.8% of its total
revenue, respectively. As at the Latest Practicable Date, the Group ’s business relationships with
each of its five largest customers in each year during the Track Record Period ranged from
approximately three to 21 years. For details, please refer to the paragraphs headed ‘‘Business –
Customers – Five largest customers ’’ and ‘‘Business – Customers – Historical concentration in
revenue derived from the Group ’s five largest customers in each year during the Track Record
Period’’in this prospectus.
FIVE LARGEST SUPPLIERS
For the years ended 31 December 2021, 2022 and 2023, the Group ’s procurement costs
attributable to its five largest suppliers in each y ear during the Track Record Period accounted for
approximately 58.3%, 71.7% and 61.8% of its total purchases, respectively. As at the Latest
Practicable Date, the Group ’s business relationships with each o f its five largest suppliers in each
year during the Track Record Period ranged from approximately two to nine years. For details,
please refer to the paragraph headed ‘‘Business – Suppliers – Five largest suppliers ’’ in this
prospectus.
SUMMARY OF FINANCIAL INFORMATION
Consolidated statements of profit or loss and other comprehensive income
The following table sets out a summary of the Group ’s consolidated statements of profit or loss
and other comprehensive income for the Track Re cord Period, which has been extracted from the
Accountants ’ Report in Appendix I to this prospectus:
Year ended 31 December
2021 2022 2023
RMB’000 RMB ’000 RMB ’000
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,118 413,091 609,301
C o s to fs a l e s............................................. ( 3 8 7 , 9 3 0 ) ( 3 0 9 , 4 5 3 ) ( 4 5 9 , 9 8 2 )
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,188 103,638 149,319
O t h e rn e ti n c o m e.......................................... 5 , 8 5 0 4 , 7 5 0 5 , 0 1 8
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,080) (3,436) (3,298)
A d m i n i s t r a t i v ee x p e n s e s..................................... ( 2 0 , 3 5 1 ) ( 3 3 , 0 0 0 ) ( 3 8 , 4 7 4 )
R e s e a r c ha n dd e v e l o p m e n te x p e n s e s ........................... ( 1 9 , 2 0 8 ) ( 1 7 , 6 8 0 ) ( 2 5 , 8 7 3 )
Profit from operations ...................................... 5 2 , 3 9 9 5 4 , 2 7 2 8 6 , 6 9 2
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,480) (15,332) (16,682)
Profit before taxation ...................................... 4 0 , 9 1 9 3 8 , 9 4 0 7 0 , 0 1 0
I n c o m et a x ............................................... ( 4 , 7 4 6 ) ( 3 , 9 6 5 ) ( 1 , 3 3 9 )
Profit for the year ......................................... 3 6 , 1 7 3 3 4 , 9 7 5 6 8 , 6 7 1
Attributable to:
E q u i t ys h a r e h o l d e r so ft h eC o m p a n y............................ 3 6 , 1 7 3 3 4 , 4 7 3 6 8 , 5 9 2
N o n - c o n t r o l l i n gi n t e r e s t s..................................... – 502 79
Profit for the year ......................................... 3 6 , 1 7 3 3 4 , 9 7 5 6 8 , 6 7 1
Cost of sales
The Group ’s cost of sales during the Track Record Period primarily comprised labour
procurement costs, direct material costs and direct labour costs. The Group ’s labour procurement
costs represented the largest component of the Group ’s cost of sales and accounted for
approximately 78.4%, 91.5% and 89.5% of its total cost of sales for the years ended 31 December
2021, 2022 and 2023, respectively. For details, please refer to the paragraph headed ‘‘Financial
Information – Description of selected items in the cons olidated statements of profit or loss – Cost of
sales’’in this prospectus.
SUMMARY
– 6 –


--- page 16 ---
Profit for the year
The Group ’s net profit decreased from the year ended 31 December 2021 to the year ended
31 December 2022 mainly due to (i) the decrease i n its total revenue attributable to the Group ’s
prioritisation of Software Solution Services over In tegrated Solution Services projects to align with
customers ’ demand and alleviate the need for substantial capital requirements; and (ii) the increase
in administrative expenses attributable to increas es in credit impairment losses and listing expenses
which had been partially offset by the increases in gr oss profit and gross profit margin driven by the
Group’s prioritisation of Software Solution Ser vices projects abovementioned. The Group ’s net profit
increased from the year ended 31 December 2022 to the year ended 31 December 2023 mainly
due to increases in its total revenue and total gross profit coupled with the decrease in income tax,
which had been partially offset by the increase in adm inistrative expenses primarily attributable to
the increase in listing expenses and entertainment expenses as well as increase in research and
development expenses primarily attributable to i ncrease in outsourcing fees for research and
development. For details, please refer to the paragraph headed ‘‘Financial Information – Review of
historical results of operations ’’in this prospectus.
Selected items in consolidated statements of financial position
The following table sets out a summary of the Group ’s consolidated statements of financial
position for the Track Record Period, which has been extracted from the Accountants ’ Report in
Appendix I to this prospectus:
As at 31 December
2021 2022 2023
RMB’000 RMB ’000 RMB ’000
N o n - c u r r e n ta s s e t s ...................................... 9 8 , 3 5 4 9 5 , 6 8 5 9 3 , 9 1 7
C u r r e n ta s s e t s......................................... 7 9 8 , 6 4 7 9 3 8 , 8 3 0 1 , 0 6 7 , 4 3 7
Current liabilities. ....................................... 7 6 9 , 3 9 7 8 4 5 , 3 4 1 1 , 0 3 1 , 1 7 0
Net current assets. ..................................... 2 9 , 2 5 0 9 3 , 4 8 9 3 6 , 2 6 7
T o t a la s s e t sl e s sc u r r e n tl i a b i l i t i e s ............................. 1 2 7 , 6 0 4 1 8 9 , 1 7 4 1 3 0 , 1 8 4
N o n - c u r r e n tl i a b i l i t i e s . ..................................... 3 , 0 6 8 1 , 9 0 0 1 , 9 6 2
Net assets. ........................................... 1 2 4 , 5 3 6 1 8 7 , 2 7 4 1 2 8 , 2 2 2
Non-controlling interest . . .................................. – 2,018 –
Net current assets
The Group ’s net current assets increased from appr oximately RMB29.3 million as at 31
December 2021 to approximately RMB93.5 million as at 31 December 2022 mainly due to the
increase in current assets as primarily driven by the increases in contract assets, trade receivables
and cash and cash equivalent, and partially offset by the increase in current liabilities primarily
driven by the increase in short-term bank borrowings during the period to enhance liquidity of the
Group. The increase in these current assets and current liabilities was a result of expansion of the
Group’s business. The Group ’s net current assets decreased to approximately RMB36.3 million as
at 31 December 2023 mainly due to the increase in curr ent liabilities primarily driven by a significant
increase of amounts due to shareholders, which out weighed the increase in current assets during
the year. The significant increase in the amounts due to shareholders of approximately RMB127.7
million was mainly due to modifications made to the Reorganisation plan. Initially, the
Reorganisation plan facilitated the complete transfer of the entire equity interest from Zhonggan
Communication to Jiangxi Zhongge, considering Jiangxi Zhongge ’s status as a newly established
entity. In December 2022, waiver agreements were executed, relieving Jiangxi Zhongge of its
payment obligations. However, in December 2023, modifications made to the Reorganisation plan
necessitated a termination agr eement, reinstating Jiangxi Zhongge ’s responsibility to fulfill payments
of approximately RMB127.7 million to Zhonggan Communication ’s shareholders. In early 2024, the
shareholders provided approximately RMB127.7 millio n as a gift in order to facilitate the transfer
payment. As at the Latest Practicable Date, the t ransfer payment was completed, the amounts due
to shareholders of approximately RMB127.7 millio n would decrease by the same amount, resulting
in an increase in the net current assets. For details, please refer to the paragraph headed ‘‘Financial
Information – Liquidity and capital resources – Net current assets ’’in this prospectus.
SUMMARY
– 7 –


--- page 17 ---
Net assets
The Group ’s net assets increased from approximately RMB124.5 million as at 31 December
2021 to approximately RMB187.3 million as at 31 Dece mber 2022 primarily attributable to the profit
generated for the year ended 31 December 2022 o f approximately RMB35.0 million and the
increase in other reserve of approximately RMB27. 7 million as a result of the capital injections to
Zhonggan Communication during the same year. However, there was a significant decrease in the
Group’s net assets of approximately RMB59.1 milli on, resulting in a total of approximately
RMB128.2 million as at 31 December 2023. The decrease was primarily caused by the
modifications made to the Reorganisation plan which outweighed the profit accumulation during the
year. According to the modifications made to the Reorganisation plan as mentioned above, the
termination agreements revived the payment obligation of Jiangxi Zhongge, thus increasing the
amounts due to shareholders by approximately RMB 127.7 million and resulting in a temporary
reduction of the Group ’s equity by the same amount as at 31 December 2023. As at the Latest
Practicable Date, the provision of approxi mately RMB127.7 million as a gift by Zhonggan
Communication ’s shareholders was completed, and the Group ’s equity fully recovered by the same
amount. For details of the Reorganisation, please refer to the section headed ‘‘History and
Reorganisation ’’in this prospectus.
Selected items in consolidated cash flow statements
The following table sets out a summary of the Group ’s consolidated cash flow statements for
the Track Record Period, which has been extracted from the Accountants ’ Report in Appendix I to
this prospectus:
Year ended 31 December
2021 2022 2023
RMB’000 RMB ’000 RMB ’000
Net cash (used in)/generated from operating activities ................. (12,246) (36,687) 48,438
Net cash used in investing activities ............................ (7,497) (8,404) (706)
Net cash generated from/(us ed in) financing activities ................. 50,604 73,887 (34,807)
Net increase in cash and cash equivalents
d u r i n gt h ey e a r ........................................ 3 0 , 8 6 1 2 8 , 7 9 6 1 2 , 9 2 5
C a s ha n dc a s he q u i v a l e n t sa tt h eb e g i n n i n go ft h ey e a r ................. 8 , 9 8 9 3 9 , 8 5 0 6 8 , 6 4 6
E f f e c to ff o r e i g ne x c h a n g e .................................... –– (31)
Cash and cash equivalents at the end of the year ................... 39,850 68,646 81,540
For the years ended 31 December 2021 and 2022, the Group recorded net operating cash
outflows of approximately RMB12.2 million and RM B36.7 million, respectively. Such net cash
outflows from operating activities was mainly due to the increase in contract assets and trade and
other receivables, as a result of the growth of the Group ’s business. The Group has been improving
the operating cash flow to keep up with the business growth. For the year ended 31 December
2023, the Group managed to record a net cash generated from operating activities of approximately
RMB48.4 million, mainly due to an increase in profi t before tax of approximately RMB31.1 million as
a result of improved profitability and a decreas e in trade and other receivables of approximately
RMB27.3 million as a result of the collection of trade receivables in relation to Infrastructure
Construction Services and Digitalisation Solution S ervices projects. For details, please refer to the
paragraph headed “Financial Information – Liquidity and capital resources – Cash flows ” in this
prospectus.
Turnover days for trade and bills receivables and contract assets
The following table sets out the Group ’s turnover days for trade and bills receivables and
contract assets during the Track Record Period:
Year ended 31 December
2021 2022 2023
Turnover days for trade and bills receivables and contract
assets (days). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503.6 689.6 545.4
Note: Average balance of trade receivables, bills receivables and contract asset multiplied by number of days in that year
divided by total revenue.
SUMMARY
– 8 –


--- page 18 ---
During the Track Record Period, the Group experienced a prolonged turnover period for trade and bills
receivables and contract assets, primarily due to (i) the lengthy inspection and acceptance and settlement
audit processes of its customers for the Infrastructure Construction Services business sub-segment and (ii)
extension of payment terms in relation to five Integrated Solution Services projects. The Group recognised
revenue and corresponding contract assets for its Infrastructure Construction Services projects based on the
work progress. However, the Group was entitled to (i) receive progress payment and issue interim VAT
invoice only after the completion of inspection and acceptance procedures carried out by its customers and/or
their agents and (ii) receive final payment (less retention money (if any)) and issue final VAT invoice only after
completion of settlement audit procedures, which were typically arranged by its customers in stages. Such
processes generally take a considerable amount of time after the recognition of revenue and the
corresponding contract assets. Consequently, the Group maintained a substantial balance of contract assets,
which would be transferred to trade receivables after the completion of the inspection and acceptance and
settlement audit. Following the completion of inspec tion and acceptance and settlement audit, the Group
could receive progress payment and final payment, respectively, from customers after a credit period of up to
90 days. This resulted in a significant balance of trade receivables and contract assets on the Group ’s
balance sheet, contributing to the extended turnover period for trade and bills receivables and contract assets.
According to the Ipsos Report, it is an industry norm that customers for the Infrastructure Construction
Services tend to settle payments after a relatively substantial period of time subsequent to inspection and
acceptance and settlement audit processes and issuance of VAT invoices. Additionally, customers in
Digitalisation Solution Services tend to settle payment s in stages after a relatively substantial period of time
subsequent to delivery and acceptance of work, which is consistent with the industry practice as advised by
Ipsos. In particular, for some of the Group ’s large-scale Digitalisation Solution Services projects, the Group
may only receive payment after the end users have made the corresponding payment to the Group ’s
customers, and the Group had extended the payment terms in relation to the five Integrated Solution Services
projects in view of the temporary liquidity constrai nts faced by the end users, which include regulatory
authorities and public institution, due to the COVID-19 pandemic. With respect to the high level of turnover
days for trade and bills receivables and contract assets, the Group has implemented certain measures to
mitigate their potential adverse impact and enhance the effectiveness of the Group ’s credit policy to improve
its cash inflow from operating activities and turnover days for trade and bills receivables and contract assets.
For details, please refer to the paragraphs headed ‘‘Financial Information – Analysis of major components of
the consolidated statement of financial position – Trade and bills receivables – Trade and other receivables –
Turnover days for trade and bills receivables and contract assets ’’in this prospectus.
Creditors ’ turnover days
The following table sets out the Group ’s creditors ’ turnover days during the Track Record
Period:
Year ended 31 December
2021 2022 2023
Creditors ’ t u r n o v e rd a y s( d a y s ) .................. 3 2 1 . 7 441.6 317.8
Note: Average balance of bill payables multiplied by number of days in that year and divided by total cost of sales.
During the Track Record Period, the Group experienced a prolonged creditors ’ turnover days. This was
mainly due to the credit terms extended by suppliers, which allowed for a payment window of 30 to 45 days
from the date of the Group ’s receipt of payment from its customers. In addition, the Group ’s customers had a
prolonged inspection and acceptance and settleme nt audit process and they will settle the Group ’s trade debt
in stages after completion of inspection and acceptance and settlement audit processes which resulted in
delayed settlement of the Group ’s trade debts. The prolonged creditors ’ turnover days was therefore a direct
result of the Group ’s extended turnover days for trade and bills receivables and contract assets.
Key financial ratios
Year ended 31 December
Key financial ratios 2021 2022 2023
C u r r e n tr a t i o( t i m e s ) .......................................... 1 . 0 1 . 1 1 . 0
Q u i c kr a t i o( t i m e s ) ........................................... 1 . 0 1 . 1 1 . 0
G e a r i n gr a t i o( t i m e s )......................................... 2 . 5 2 . 0 2 . 7
D e b tt oe q u i t yr a t i o( t i m e s )..................................... 2 . 2 1 . 6 2 . 1
I n t e r e s tc o v e r a g e( t i m e s ) ...................................... 4 . 6 3 . 5 5 . 2
R e t u r no ne q u i t y( % ) ......................................... 2 9 . 0 1 8 . 7 5 3 . 5
R e t u r no na s s e t s( % ) ......................................... 4 . 0 3 . 4 5 . 9
Note: For details of the calculation basis, please refer to the paragraph headed ‘‘Financial Information – Summary of financial
information – Key financial ratios ’’in this prospectus.
SUMMARY
– 9 –


--- page 19 ---
The Group recorded gearing ratio of approximately 2.5 times, 2.0 times and 2.7 times as at 31
December 2021, 2022 and 2023, respectively. The relatively high gearing ratio recorded by the Group was
mainly due to the relatively low liquidity and balance of cash on hand, as a result of prolonged settlement or
trade debts form customers. Therefore, the Group utilised bank borrowings to finance its working capital
needs and enhance liquidity. The Group recorded bank borrowings of approximately RMB311.4 million,
RMB375.2 million and RMB347.5 million as at 31 December 2021, 2022 and 2023. For details of the Group ’s
indebtedness during the Track Record Period, please refer to the section headed “Financial Information –
Indebtedness ” in this prospectus.
Indebtedness
As at 31 December 2021, 2022 and 2023 and 30 April 2024, the Group ’s bank borrowings
amounted to approximately RMB311.4 million, RM B375.2 million, RMB347.5 million and RMB339.0
million, respectively, comprising primarily secured bank borrowings used to finance the Group ’s
working capital requirements. Certain of these bank borrowings contained restrictive financial loan
covenants that are commonly found in lending arrangem ents with financial institutions. As confirmed
by the Directors, there were breaches of one of these covenants, which requires the gearing ratio to
be not more than 65% for a period of three consecutive months or more, and the Group fell short of
such requirement. As advised by the PRC Legal Advisers, the relevant bank borrowings may
become repayable on demand upon such breach. Accordingly, the Group has obtained a waiver
from the relevant bank which confirmed that, despi te of such breach, the existing bank borrowings
granted will remain valid for the remaining term. Based on the above, the PRC Legal Advisers are
of the view that the possibility for the relevant principal bank to demand immediate repayment by
the Group is low.
The other restrictive financial loan covenant s which may be material to the Group, included,
among others, that (i) the current ratio shall not fall under 1.0 for a period of three consecutive
months or more; (ii) the ratio of contingent liabilities relative to net assets must not exceed 65% for
a period of three consecutive months or more; and ( iii) the Group must maintain profitability (i.e. net
profit position) for the financial year. As at 31 December 2021, 2022 and 2023 and 30 April 2024,
the Group ’s current ratios were approximately 1.0, 1.1, 1.0 and 1.2 times, respectively. The Group ’s
net profit for the year/period also fulfilled the profitability requirements under the loan covenants
during the Track Record Period and up to 30 April 2024. Furthermore, as confirmed by the
Directors, the Group did not have any contingent li abilities during the Track Record Period and up
to 30 April 2024.
In view of the above breach, the Group has implemented enhanced internal control measures
on liquidity management and compliance with loa n covenants. For details, please refer to the
paragraph headed ‘‘Financial Information – Working Capital ’’in this prospectus.
COMPETITIVE STRENGTHS
The Directors believe that the Group ’s success is attributable to the following competitive
strengths:
 the Group ’s well-established operating history as a reputable integrated service provider
in Jiangxi Province specialising in the provi sion of T elecommunications Infrastructure
Services in the PRC;
 the Group ’s diversified revenue base and service offerings and capability in capitalising
on emerging trends in the telecommunications i ndustry by offering Digitalisation Solution
Services;
 the Group ’s long established business relationships with its suppliers; and
 the Group ’s experienced management team.
For details, please refer to paragraph headed ‘‘Business – Competitive strengths ’’ in this
prospectus.
BUSINESS STRATEGIES
The principal objectives of the Group are to dev elop its business and achieve sustainable
growth through pursuing the followin g principal business strategies:
 continue to expand the Group ’s T elecommunications Infrastructure Services in the
Western Region of the PRC focusing on Xinjiang Uygur Autonomous Region and Yunnan
Province;
SUMMARY
– 10 –


--- page 20 ---
 selectively pursue strategic acquisitions to strengthen the Group ’s Digitalisation Solution
Services;
 enhancing the Group ’s liquidity position and financial c apabilities in securing new large-
scale Digitalisation Solut ion Services projects; and
 strengthening the Group ’s research and development capabilities to enhance its provision
of Digitalisation Solution Services.
For details, please refer to the paragraph headed ‘‘Business – Business strategies ’’ in this
prospectus.
GLOBAL OFFERING STATISTICS
Based on the
minimum offer price
of HK$1.13 per Offer
Share
Based on the
maximum offer
price of HK$1.25 per
Offer Share
Market capitalisation of the Shares (Note 1) ............. H K $ 7 2 3 , 200,000 HK$800,000,000
Unaudited pro forma adjusted consolidated net
tangible assets of the Group attributable to equity
shareholders of the Company per Share (Notes 2 and 3) . . . HK$0.46 HK$0.48
Notes:
1. The calculation of market capitalisation of the Shares is based on 640,000,000 Shares in issue immediately after
completion of the Capitalisation Issue and the Global Offering (assuming that the Over-allotment Option is not
exercised and without taking into account any Shares which may be granted upon the exercise of any options under
the Share Option Scheme).
2. For details, please refer to the section headed ‘‘Unaudited Pro Forma Financial Information ’’ in Appendix II to this
prospectus.
3. No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to equity
shareholders of the Company to reflect any trading result or other transactions of the Group entered into subsequent to
31 December 2023, including but not limited to the provision of RMB127,717,000 to the Group and the settlement of
amounts due to the relevant shareholders on 3 April 2024 arising from termination of waiver agreement with relevant
shareholders. Had such provision of funds and termination been completed on 31 December 2023, the unaudited pro
forma adjusted net tangible assets attributable to equity shareholders of the Company would have been increased by
RMB127,717,000, and the unaudited pro forma adjusted consolidated net tangible assets attributable to equity
shareholders of the Company per Share would have been increased by approximately RMB0.20 (equivalent to
HK$0.22).
USE OF PROCEEDS
It is estimated that the net proceeds from the Global Offering (after deducting underwriting
commissions and estimated expenses payable by t he Group in connection with the Global Offering),
assuming the Over-allotment Option is not exer cised and an Offer Price of HK$1.19 per Share
(being the mid-point of the indicative Offer Price range), will be approximately HK$142.1 million. The
Group currently intends to apply the net proceeds in the following manner:
 approximately 63.0% or HK$89.6 million (equ ivalent to approximately RMB81.4 million)
will be used to selectively pursue strategic acquisitions and acquire full ownership in
companies specialising in the provision of ser vices relating to digitalisation solution
services;
 approximately 15.5% or HK$22.0 million (equi valent to approximately RMB20.0 million),
together with the Group ’s internal resources and/or bank borrowings, will be used as
payment of the upfront costs required in respect of prospective Integrated Solution
Services projects for 2024;
 approximately 17.3% or HK$24.6 million (equi valent to approximately RMB22.4 million),
together with the Group ’s internal resources and/or bank borrowings, will be used to
strengthen the Group ’s research and development capabilities to enhance its provision of
Digitalisation Solution Services by purchasing hardware equipment;
 approximately 4.2% or HK$5.9 million (equ ivalent to approximately RMB5.4 million) will
be used as general working capital.
For further details, please refer to the section headed ‘‘Future Plans and Use of Proceeds ’’in
this prospectus.
SUMMARY
– 11 –


--- page 21 ---
LISTING EXPENSES
The total listing expenses in relation to the Gl obal Offering, primarily consisting fees paid or
payable to professional parties and underwriti ng fees and commission, are estimated to be
approximately HK$48.3 million, w hich accounted for approximately 25.3% of the gross proceeds
from the Global Offering (assuming an Offer Price of HK$1.19 per Offer Share, being the mid-point
of the indicative range of the Offer Price, excludi ng any discretionary incentive fee which may be
paid, and that the Over-allotment Option will not be exercised). The estimated total listing expenses
consist of (i) underwriting-related expens es of approximately HK$9.5 million, and (ii) non-
underwriting-related expenses of approximately H K$38.8 million, including (a) fees and expenses of
the Company ’s legal advisers and auditors and reportin g accountants of approximately HK$23.6
million; and (b) other fees and expenses of approxim ately HK$15.2 million. For the years ended 31
December 2021, 2022 and 2023, the Group incurred listing expenses of approximately HK$22.6
million, of which approximately HK $17.3 million was charged to the Group ’s consolidated statements
of comprehensive income for the years ended 31 December 2021, 2022 and 2023, the remaining
amount of approximately HK$5.3 million was in cluded in other receivables and will be subsequently
charged to equity. It is estimated that listing e xpenses of approximately HK$25.7 million will be
incurred upon Listing, of which approximately H K$12.3 million will be charged to the consolidated
statement of comprehensive income for the y ear ending 31 December 2024, and approximately
HK$13.4 million will be charged to equity.
CONTROLLING SHAREHOLDERS
Immediately following the completion of the Gl obal Offering (assuming that the Over-allotment
Option is not exercised and without taking into account any Shares which may be issued upon the
exercise of any options which may be granted unde r the Share Option Scheme), GT & Yangtze,
which is owned as to approximately 70.0% by Mr . Liu Haoqiong and as to 30.0% by Ms. T ao Xiulan,
will directly own approximately 56.16% of the is sued share capital of the Company. Accordingly, GT
& Yangtze, Mr. Liu Haoqiong and Ms. T ao Xiulan are the Controlling Shareholders within the
meaning of the Listing Rules.
For further details, please refer to the section headed ‘‘Relationship with Controlling
Shareholders ’’in this prospectus.
PRE-IPO INVESTORS
The Group undertook several Pre-IPO Investm ents and entered into a series of agreements
with four Pre-IPO Investors. Immediately after th e completion of the Capitalisation Issue and the
Global Offering (assuming that the Over-allotment Option is not exercised and taking no account of
any Shares to be issued upon the exercise of any options which may be granted under the Share
Option Scheme), the Pre-IPO Investors, namely, Rui Da BVI, Shu Zhi Cayman, You Po BVI and Ms.
Yeung, will be entitled to approximately 0.43%, 1 .00%, 3.22% and 0.75% of the total issued shares
of the Company, respectively. Rui Da BVI is a limit ed liability company incorporated in the BVI and
wholly-owned by Rui Da Xin T ao, which in turn is a li mited liability partnership established in the
PRC and principally engaged in investment management, asset management and project
investment. Shu Zhi Cayman is a limited liabili ty company incorporated in the Cayman Islands and
wholly-owned by Shu Zhi Shen Kong, which in turn is a limited liability partnership established in
the PRC and principally engaged in corporate managemen t and information consultancy services.
You Po BVI is a limited liability company incorporated in the BVI and wholly-owned by You Po
Investment, which in turn is a limited liability partnership established in the PRC and principally
engaged in information consultancy services. Ms. Yeung is a Hong Kong individual and has over 10
years of experience in the consulting industry.
Save for the Pre-IPO Investments, each of the Pre-IPO Investors did not have any past or
present relationships (includi ng, but without limitation, family, trust, business, employment
relationships) or any agreements, arrangement s, understanding or undertakings with the Company,
the subsidiaries, Shareholders, Directors or senior management and any of their respective
associates and is an Independent Third Party as at th e Latest Practicable Date. For further details
of the background of the Pre-IPO Investors and the Pre-IPO Investments, please refer to the
paragraph headed ‘‘History and Reorganisation – Pre-IPO Investments ’’in this prospectus.
DIVIDENDS
The companies comprising the Group did not dec lare or pay any dividend or distribution during
the Track Record Period. As at the Latest Practicable Date, the Group did not have any specific
dividend policy nor any pre-determined dividend payout ratio. For further details, please refer to the
paragraph headed ‘‘Financial Information – Dividends’’in this prospectus.
SUMMARY
– 12 –


--- page 22 ---
RISK FACTORS
There are risks associated with any investment. S ome of the relatively material risks relating to
the Group include, but not limited to, (i) the Group ’s projects are concentrated in the Central Region
of the PRC, in particular Jiangxi Province, and any material change pertaining to Jiangxi Province
may materially and adversely affect the Group ’s business, results of operations and profitability; (ii)
the Group had a concentration of customers during the Track Record Period and any decrease or
loss of business from the Group ’s major customers could adversely and substantially affect the
Group’s operations and financial conditions; (iii) the Group ’s business operates on a non-recurring
and project-by-project basis and failure to obtain new projects could materially affects the Group ’s
business and results of operations; (iv) the Group may not be able to transfer its contract assets to
trade receivables and ensure the settlement of its trade receivables in a timely manner or at all due
to reasons beyond the Group ’s control and as a result, the Group ’s liquidity may be materially and
adversely affected; (v) the Group experienced high level of turnover days for trade and bills
receivables and contract assets during the Track Record Period, and its cash flows may further
deteriorate due to potential mismatches in the tim e between receipt of payments from the Group ’s
customers and payments to the Group ’s suppliers, both of which may impact its operating cash flow
position; (vi) the Group ’s high level of indebtedness may persist or increase in the future; (vii) the
Group may not be able to adequately protect its int ellectually property rights, and the Group may
also be exposed to intellectual property infringement or misappropriation claims; and (viii) the Group
relies on the performance, quality and the conti nued supply of labour, ancillary construction
materials, hardware and third-party software systems and technical support services etc. by its
suppliers, and in particular labour suppliers, to complete certain parts of the Group ’sp r o j e c t s .A
detailed discussion of the risk factors is set out in the section headed ‘‘Risk Factors ’’ in this
prospectus.
COMPETITIVE LANDSCAPE
The telecommunications infrastructure servic es industry in the PRC is highly fragmented with
approximately 366 companies possessing the First T ier Communications Project Implementation
General Contracting Enterprise Qualification* （通信工程施工總承包（一級））in 2023. Similarly, the
digitalisation solution services industry is also h ighly fragmented with top players dominating in
different provinces. In spite of the above, according to the Ipsos Report, there exist multiple entry
barriers in the telecommunications infrastructure services industry including (i) a strong capital
position as a typical project involves significant upfront commitment of resources and capital and as
the payment process can be lengthy and delays may occur, (ii) a proven track record as market
players are required to demonstrate their compet ence and experience in the field during the tender
process and (iii) licenses that are the prerequisite s for a company to participate in the projects of
the key market players in the telecommunicati ons infrastructure services industry. For the
digitalisation solution services industry, the ent ry barriers include (i) high cost of investment to
enhance technologies, develop innovative solutions, t rain information technology talents and obtain
intellectual property and (ii) talent competit ion for technical talents to conduct research and
development of new solutions that meet users ’ needs.
IMPACT OF THE COVID-19 PANDEMIC
During the prevalence of the COVID-19 pandemic, some of the tendering processes of the
Group’s customers for infrastructure constructi on or maintenance related projects had been
terminated or postponed, while for some of the Group ’s secured projects, the customers had placed
fewer work orders or postponed the project completion schedule. For details, please refer to the
paragraph headed ‘‘Business – Projects – Major Projects – Completed Projects ’’in this prospectus.
Meanwhile, the Group experienced (i) protracted timeframe for the inspection and acceptance and
settlement audit procedures by its customers and (ii) delays in settlement of the customers ’
accounts caused by the prolonged internal proc edures of its customers and/or the extension of
payment terms in relation to five Integrated Solu tion Services projects in view of the temporary
liquidity constraints experienced by the end us ers (including regulatory authorities and public
institution). For further details, please refer to the paragraphs headed ‘‘Business – Projects’’and the
section headed ‘‘Financial Information ’’ in this prospectus. However, due to the government ’s
initiatives and support to counter the economic impact of the COVID-19 pandemic by accelerating
the digital transformation of enterprises and city management and the use of automated digital
technologies in the post-COVID-19 era, there p resented rising demand for 5G technologies which
featured high speed, wide bandwidth and stable wir eless data connection and network connectivity
to facilitate business and social activities, hence leading to the urge for improvement of
telecommunications infrastructure across t he PRC. Coupled with the various competitive
strengthens of the Group as set out in the paragraph headed ‘‘Business – Competitive strengthens
’’
SUMMARY
– 13 –


--- page 23 ---
in this prospectus, the Directors considered that the Group had not experienced any material
adverse impact on its business operations and financial performance as a result of the outbreak of
the COVID-19 pandemic.
RECENT DEVELOPMENTS AND N O MATERIAL ADVERSE CHANGE
Subsequent to the Track Record Period and up to the Latest Practicable Date, the Group
continues to be focusing on its T elecommunicati ons Infrastructure Services and Digitalisation
Solution Services business segments, there has been no significant change in the Group ’s business
model or principal services. T o the best knowledge of the Directors, the industries in which the
Group is operating remained relatively stable after the Track Record Period and up to the Latest
Practicable Date. Based on the Group ’s unaudited management account, the Group recorded an
increase in revenue as well as total gross profit for the four months ended 30 April 2024 when
compared to the corresponding period in 2023. Such increase in revenue was primarily due to the
improvement in both the Infrastructure Construc tion Services and the Infrastructure Maintenance
Services business sub-segments, wh ich also contributed to the improvement in gross profit for both
of these business sub-segments over such period.
The Directors are endeavoured to seek new business opportunities for both the
T elecommunications Infrastructure Services and Di gitalisation Solution Services business segments
in order to drive the financial performance of t he Group. Subsequent to the Track Record Period
and up to the Latest Practicable Date, the Group had submitted 97 new tenders for its
T elecommunications Infrastructure Services projects and had been awarded 35 T elecommunications
Infrastructure Services projects with an aggr egate maximum or estimated contract value of
approximately RMB114.9 million, 30 of which are Infr astructure Construction Services projects and
five of which are Infrastructure Maintenance Se rvices projects. These newly awarded/secured
projects are generally of a smaller scale with a maximum or estimated contract value below
RMB25.0 million for Infrastructure Construction Services projects or below RMB3.0 million for
Infrastructure Maintenance Services projects. Further, the Group had secured, by way of single-
source procurement and/or by responding to invita tion to quote, two new Digitalisation Solution
Services projects with an aggregate estimated c ontract value of approximately RMB10.4 million,
both of which are Software Solution Services projects. These two newly secured projects are also
Major Projects with an estimated contract va lue of approximately RMB3.2 million and RMB7.2
million, respectively, relating to the digital financ e and digital government sectors. As at the Latest
Practicable Date, the Group had a total of 130 On -going Projects and Pre-revenue Projects,
comprising 122 T elecommunications Infrastructure Se rvices projects and eight Digitalisation Solution
Services projects, with a total outstanding project backlog of appr oximately RMB819.4 million and
RMB15.1 million, respectively. Based on an assessment made by the Directors, the Group has
given due consideration to the On-going Projects co mprising Infrastructure Construction Services,
Infrastructure Maintenance Services, Software So lution Services and System Maintenance Services,
including an assessment of the appropriate conver sion rate associated with these projects (if
applicable). In addition, the Directors have consi dered certain prospective Integrated Solutions
Services projects. Having given due consideration to all these rel evant factors, the Directors have
concluded that the Group ’s net profit for the year ending 31 December 2024 is expected to be lower
than the net profit for the year ended 31 December 2023. It is important to note that this
assessment is based solely on the existing and pot ential projects described above. The Directors
have excluded from their overall assessment any other projects that may potentially be secured
between the Latest Practicable Date and the end of 2024.
The Directors confirmed that, up to the date o f this prospectus, there has been no material
adverse change in the financial or trading positi ons or prospects of the Group since 31 December
2023 (being the date of which the Group ’s latest audited consolidated financial statements were
made up as set out in the Accountants ’ Report included as Appendix I to this prospectus) and there
has been no event since 31 December 2023 which would materially affect the information shown in
the Accountants ’ Report included as Appendix I to this prospectus.
SUMMARY
– 14 –


--- page 24 ---
Unless the context otherwise requires, the following expressions have the following
meanings in this prospectus.
‘‘Accountants ’ Report ’’........ t h ea c c o u n t a n t s ’ report of the Group prepared by the reporting
accountants as set out in Appendix I to this prospectus
‘‘affiliate(s) ’’ . . . . . . . . . . . . . . . any other person(s), directly or indirectly, controlling or controlled
by or under direct or indirect common control with such specified
person
‘‘AFRC ’’.................. A c c o u n t i n ga n dF i n a n c i a lR e p o r t i n gC o u n c i l
‘‘Application List(s) ’’ . . . . . . . . . the application list(s) used in the Hong Kong Public Offer
‘‘Articles ’’or ‘‘Articles of
Association ’’.............
the second amended and restated articles of association of
the Company conditionally adopted by the Shareholders on
17 June 2024 to take effect upon the Listing Date, as
a m e n d e df r o mt i m et ot i m e
‘‘associate(s) ’’. . . . . . . . . . . . . . has the meaning ascribed thereto under the Listing Rules
‘‘Audit Committee ’’ .......... t h ea u d i tc o m m i t t e eo ft h eB o a r d
‘‘Big Three ’’ . . . . . . . . . . . . . . . the three largest telecommunications network operators in
the PRC
‘‘Board ’’or ‘‘Board of Directors ’’ . the board of Directors
‘‘business day(s) ’’. . . . . . . . . . . any day(s) (other than a Saturday, Sunday or public holiday
in Hong Kong) on which licenced banks in Hong Kong are
generally open for normal banking business
‘‘BVI’’.................... t h eB r i t i s hV i r g i nI s l a n d s
‘‘Capitalisation Issue ’’ . . . . . . . . the issue of 478,988,749 new Shares to be made upon
capitalisation of certain sums standing to the credit of the
share premium account of the Company as referred to in the
paragraph headed ‘‘Statutory and General Information – A.
Further information about the Company – 3. Written
resolutions of the Shareholders passed on 17 June 2024 ’’ in
Appendix V to this prospectus
‘‘CCASS ’’. . . . . . . . . . . . . . . . . the Central Clearing and Settlement System established and
operated by HKSCC
‘‘HKSCC Participant(s) ’’. . . . . . . a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
DEFINITIONS
– 15 –


--- page 25 ---
‘‘China ’’or ‘‘PRC’’........... t h e P e o p l e ’s Republic of China, but for the purpose of this
prospectus, and for geographical reference only and except
where the context requires ot herwise, reference in this
prospectus to ‘‘China ’’ or ‘‘PRC’’ do not apply to Hong Kong,
Macau and T aiwan
‘‘Central Region ’’ . . . . . . . . . . . for the purpose of this prospectus, refers to Jiangxi
Province, Shanxi Province, Anhui Province, Henan
Province, Hubei Province and Hunan Province
‘‘close associate(s) ’’ . . . . . . . . . has the meaning ascribed to it under the Listing Rules
‘‘Companies Act ’’or ‘‘Cayman
Islands Companies Act ’’.....
the Companies Act, Cap. 22 (Law 3 of 1961, as consolidated
and revised) of the Cayman Islands
‘‘Companies Ordinance ’’ . . . . . . the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong) which took effect from 3 March 2014, as amended,
supplemented or otherwise modified from time to time
‘‘C o m p a n i e s( W i n d i n gU pa n d
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 ’’ . . . . . . . . . . . . . . . Zhonggan Communication (Group) Holdings Limited, a
company incorporated in the Cayman Islands on 20 April
2022 as an exempted company with limited liability
‘‘Completed Project(s) ’’....... t h e G r o u p ’s project(s) where the agreement of which had
expired or been terminated, or where all the revenue from
which had been fully recognised, as at specified date
‘‘connected person(s) ’’ . . . . . . . has the meaning ascribed to it under the Listing Rules
‘‘Controlling Shareholder(s) ’’ . . . has the meaning ascribed thereto under the Listing Rules
and unless the context requires others, refers to Mr. Liu
Haoqiong, Ms. T ao Xiulan and GT & Yangtze
‘‘core connected person(s) ’’. . . . has the meaning ascribed thereto under the Listing Rules
‘‘COVID-19 ’’. . . . . . . . . . . . . . . a newly identified coronavirus emerging in 2019, known to
cause contagious respiratory illness
‘‘CSRC ’’.................. t h e C h i n a S e c u r i t i e s R e g u l a t o r y C o m m i s s i o n （ 中國證券監督
管理委員會 ）
‘‘Designated Bank ’’. . . . . . . . . . any bank in Hong Kong designated by it and approved by
HKSCC for money settlement purposes
DEFINITIONS
– 16 –


--- page 26 ---
‘‘Deed of Indemnity ’’. . . . . . . . . a deed of indemnity undertakings dated 17 June 2024
entered into by the Controlling Shareholders in favor of the
Company (for itself and as trustee for each of its
subsidiaries) conta ining the indemnities as referred to in the
paragraph headed ‘‘Statutory and General Information – E.
Other information － 1. T ax and other indemnities ’’ in
Appendix V to this prospectus
‘‘Deed of Non-Competition ’’. . . . a deed of non-competition undertakings dated 17 June 2024
entered into by the Controlling Shareholders in favor of the
Company (for itself and as trustee for each of its
subsidiaries), particulars of which are summarized in the
section headed ‘‘Relationship with Controlling Shareholders ’’
in this prospectus
‘‘Digitalisation Solution Services ’’ one of the business segments of the Group which comprises
Integrated Solution Services, System Maintenance Services
and Software Solution Services. For details, please refer to
the paragraphs headed ‘‘Business – Principal services and
business model ’’in this prospectus
‘‘Director(s) ’’............... t h ed i r e c t o r ( s )o ft h eC o m p a n y
‘‘electronic application
instruction(s) ’’...........
instruction given by a HKSCC Participant electronically via
CCASS to HKSCC, being one of the methods to apply for
the Hong Kong Public Offer Shares
‘‘Eastern Region ’’ . . . . . . . . . . . for the purpose of this prospectus, refers to Beijing,
Shanghai, Tianjin, Hebei Province, Jiangsu Province,
Zhejiang Province, Fujian Province and Shandong Province,
Guangdong Province and Hainan Province
‘‘ESG ’’................... e n v i r o n m e n t ,s o c i e t ya n dg o v e r n a n c e
‘‘Extreme Conditions ’’ ........ t h eo c c u r r e n c eo f ‘‘extreme conditions ’’as announced by any
government authority of Hong Kong due to serious disruption
of public transport services, extensive flooding, major
landslides, large-scale power outage or any other adverse
conditions before Typhoon Signal No. 8 or above is replaced
with Typhoon Signal No. 3 or below
‘‘FINI ’’ ................... ‘‘Fast Interface for New Issuance ’’,a no n l i n ep l a t f o r m
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
DEFINITIONS
– 17 –


--- page 27 ---
‘‘Gantong Jiangxi ’’. . . . . . . . . . . Gantong Communication (Jiangxi) Co., Ltd.* （ 贛通通信（ 江
西 ）有限公司 ）, a limited liability company established under
the laws of the PRC on 28 October 2019 and an indirect
wholly-owned subsidiary of the Company
‘‘Gantong Xiamen ’’ .......... G a n t o n g C o m m u n i c a t i o n ( X i a m e n ) C o . , L t d . * （ 贛通通信（ 廈
門 ）有限公司 ）, a limited liability company established under
the laws of the PRC on 12 November 2021 and an indirect
wholly-owned subsidiary of the Company
‘‘GLP Software ’’ ............ J i a n g x i G e l a p u S o f t w a r e C o . , L t d . * （ 江西歌拉普軟件有限公
司 ）, a limited liability company established under the laws of
the PRC on 11 February 2022 and an indirect wholly-owned
subsidiary of the Company
‘‘GLP T echnology ’’ .......... J i a n g x iG e l a p uT e c h n o l o g yC o . ,L t d . * （ 江西戈拉普科技有限公
司 ）, a limited liability company established under the laws of
the PRC on 30 November 2017 and an indirect wholly-
owned subsidiary of the Company
‘‘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 Offer and the International Placing
‘‘Group ’’.................. t h eC o m p a n ya n di t ss u b s i d i a r i e s( o rt h eC o m p a n ya n da n y
one or more of its subsidiaries, as the context may require)
or, where the context so requires, in respect of the period
before the Company became the holding company of its
present subsidiaries, the present subsidiaries of the
Company and the businesses carried on by such
subsidiaries or (as the case may be) their respective
predecessors
‘‘GT & Yangtze ’’
............ G T & Y a n g t z e L i m i t e d , a b u s i n e s s c o m p a n y w i t h l i m i t e d
liability incorporated in the BVI on 12 April 2022 and a
Controlling Shareholder and is owned as to 70.0% by Mr. Liu
Haoqiong and as to 30.0% by Ms. T ao Xiulan, respectively
‘‘HK$’’, ‘‘Hong Kong dollar(s) ’’ . . Hong Kong dollar(s), the l awful currency of Hong Kong
‘‘HK eIPO White Form ’’ . . . . . . the application for the Hong Kong Public Offer Shares to be
issued in the applicant ’s own name by submitting
applications online through the IPO App or the designated
website at www.hkeipo.hk
DEFINITIONS
– 18 –


--- page 28 ---
‘‘HK eIPO White Form Service
Provider ’’ ...............
the HK eIPO White Form service provider designated by our
Company as specified in the IPO App or on the designated
website at www.hkeipo.hk
‘‘HKFRSs ’’ ................ H o n g K o n g F i n a n c i a l R e p o r t i n g S t a n d a r d s , w h i c h i n c l u d e s
all applicable individual Hong Kong Financial Reporting
Standards, Hong Kong Accounting Standards and the
interpretations issued by the Ho ng Kong Institute of Certified
Public Accountants.
‘‘HKSCC ’’. . . . . . . . . . . . . . . . . Hong Kong Securities Clearing Company Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
‘‘HKSCC EIPO ’’ ............ t h ea p p l i c a t i o nf o rt h eH o n gK o n gP u b l i cO f f e rS h a r e st ob e
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 Clearing
Participant to give electronic application instructions via
HKSCC ’s FINI system to apply for the Hong Kong Public
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
operations and functions of the Systems, as from time to
time in force
‘‘Hong Kong ’’or ‘‘HKSAR ’’or
‘‘HK’’...................
the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong Share Registrar ’’ . . Tricor Investor Services Limited
‘‘Hong Kong Public Offer ’’. . . . . the offer by the Company of the Hong Kong Public Offer
Shares for subscription by the public in Hong Kong as
described in the paragraph headed ‘‘Structure and
Conditions of the Global Offering – T h eH o n gK o n gP u b l i c
Offer ’’in this prospectus at the Offer Price (plus brokerage of
1%, SFC transaction levy of 0.0027%, AFRC transaction
levy of 0.00015% and Stock Exchange trading fee of
0.00565%) and on and subject to the terms and conditions
stated herein
DEFINITIONS
– 19 –


--- page 29 ---
‘‘Hong Kong Public Offer Shares ’’ the 16,000,000 new Shares initially being offered for
subscription by the Company at the Offer Price under the
Hong Kong Public Offer (subject to reallocation as described
in the paragraph headed ‘‘Structure and Conditions of the
Global Offering – T h eH o n gK o n gP u b l i cO f f e r –
Reallocation ’’in this prospectus)
‘‘Hong Kong Underwriters ’’ . . . . the underwriters of the Hong Kong Public Offer named in the
paragraph headed ‘‘Underwriting – Hong Kong Underwriters ’’
in this prospectus
‘‘Hong Kong Underwriting
Agreement ’’..............
the conditional underwriting agreement dated 20 June 2024
relating to the Hong Kong Public Offer entered into by the
Company, the Controlling Shareholders, the executive
Directors, the Sole Sponsor, the Sole Overall Coordinator,
the Sole Global Coordinator and the Hong Kong
Underwriters, particulars of which are summarised in the
paragraph headed ‘‘Underwriting – Underwriting arrangements
and expenses ’’in this prospectus
‘‘Huat Huat ’’............... H u a tH u a tL i m i t e d ,ab u s i n e s sc o m p a n yw i t hl i m i t e dl i a b i l i t y
incorporated in the BVI on 12 April 2022 wholly-owned by
Mr. Liu Dingli
‘‘Independent Third Party(ies) ’’. . an individual(s) or a company(ies) who or which, as far as
the Directors are aware after having made reasonable
enquiries, is/are not connected with (within the meaning of
the Listing Rules) the Group, an y Director, chief executive or
substantial shareholder of the Company, its subsidiaries or
any of their respective associates
‘‘Infrastructure Construction
Services ’’ ...............
one of the business sub-segments under the Group ’s
T elecommunications Infrast ructure Services business
segment, the principal servic es of which mainly involve the
construction, adaptation and installation of network
infrastructure along the entire telecommunications network.
For details, please refer to the paragraphs headed ‘‘Business
– Principal services and business model ’’in this prospectus
‘‘Infrastructure Maintenance
Services ’’ ...............
one of the business sub-segments under the Group ’s
T elecommunications Infrast ructure Services business
segment, the principal services of which mainly involve
carrying out repairs and restoration works, routine basic
maintenance and emergency trouble shooting to customers.
For details, please refer to the paragraphs headed ‘‘Business
– Principal services and business model ’’in this prospectus
DEFINITIONS
– 20 –


--- page 30 ---
‘‘Integrated Solution Services ’’. . one of the business sub-segments under the Group ’s
Digitalisation Solution Services business segment, the
principal services of which main ly involve providing turnkey
solutions through system design planning, supply,
installation and integration services of hardware, software
systems and technical support s ervices. For details, please
refer to the paragraphs headed ‘‘Business – Principal
services and business model ’’in this prospectus
‘‘International Placing ’’ . . . . . . . the conditional placing of the International Placing Shares at
the Offer Price outside the United States in reliance on
Regulation S with selected pro fessional, institutional and
other investors, details of which are described in the
paragraph headed ‘‘Structure and Conditions of the Global
Offering – The International Placing ’’in this prospectus
‘‘International Placing Share(s) ’’. the 144,000,000 new Shares, initially being offered for
subscription by the Company at the Offer Price under the
International Placing (subje ct to the Over-allotment Option
and reallocation as described in the paragraph headed
‘‘Structure and Conditions of the Global Offering – The
International Placing – Reallocation ’’in this prospectus)
‘‘International Underwriters". . . . the group of underwriters led by the Sole Overall Coordinator
and the Sole Global Coordinator, who are expected to enter
into the International Underwriting Agreement
‘‘International Underwriting
Agreement ’’..............
the conditional underwriting agreement relating to the
International Placing and expected to be entered into by the
Company, the Controlling Sha reholders, the executive
Directors, the Sole Sponsor, the Sole Overall Coordinator, the
Sole Global Coordinator and the International Underwriters on
or about the Price Determination Date
‘‘IPO App ’’................ t h em o b i l ea p p l i c a t i o nf o rt h e HK eIPO White Form service
which can be downloaded by searching ‘‘IPO App ’’ in App
Store or Google Play or downloaded at www.hkeipo.hk/
IPOApp or www.tricorglobal.com/IPOApp
‘‘Ipsos ’’ . . . . . . . . . . . . . . . . . . Ipsos, a market research and consulting company, an
Independent Third Party
‘‘Ipsos Report ’’. . . . . . . . . . . . . the industry report prepared by Ipsos and commissioned by
the Company, the content of which is quoted in this
prospectus
DEFINITIONS
– 21 –


--- page 31 ---
‘‘Jiangxi Zhongge ’’ . . . . . . . . . . Jiangxi Zhongge Communication Co., Ltd.* （ 江西中歌通信有
限公司 ）, a company established in the PRC with limited
liability on 18 July 2022 and an indirect wholly-owned
subsidiary of the Company
‘‘Latest Practicable Date ’’ . . . . . 11 June 2024, being the latest practicable date prior to the
printing of this prospectus for ascertaining certain information
contained in this prospectus prior to its publication
‘‘Listing ’’.................. t h e l i s t i n g o f t h e S h a r e s o n t h e M a i n B o a r d o f t h e S t o c k
Exchange
‘‘Listing Committee ’’ ......... t h eL i s t i n gC o m m i t t e eo ft h eS t o c kE x c h a n g e
‘‘Listing Date ’’. . . . . . . . . . . . . . the date, currently expected to be Wednesday, 3 July 2024,
on which dealings of the Shares on the Main Board first
commence
‘‘Listing Rules ’’. . . . . . . . . . . . . the Rules Governing the Listing of Securities on the Stock
Exchange as amended, supplemented or otherwise modified
from time to time
‘‘Main Board ’’.............. t h es t o c ke x c h a n g e( e x c l u d i n gt h eo p t i o n sm a r k e t )o p e r a t e d
by the Stock Exchange which is independent from and
operating in parallel with GEM of the Stock Exchange
‘‘Major Project(s) ’’........... t h e G r o u p ’s projects with contract value of (i) RMB25.0
million or above in the case of Infrastructure Construction
Services projects, or (ii) RMB3.0 million or above in the
cases of Infrastructure Maintenance Services projects,
Integrated Solution Services projects, System Maintenance
Services projects and Software Solution Services projects
‘‘Memorandum ’’or ‘‘Memorandum
of Association ’’ ...........
the second amended and restated memorandum of
association of the Company adopted by the Shareholders on
17 June 2024 with immediate effect as amended from time
to time
‘‘MOFCOM ’’ ............... t h eM i n i s t r yo fC o m m e r c eo ft h eP R C （ 中國商務部 ）
‘‘Mr. Liu Dingli ’’. . . . . . . . . . . . . Mr. Liu Dingli, son of Mr. Liu Haoqiong and an executive
Director
‘‘Mr. Liu Dingyi ’’ . . . . . . . . . . . . Mr. Liu Dingyi, son of Mr. Liu Haoqiong, an executive
Director and a joint company secretary
‘‘Mr. Liu Haoqiong ’’.......... M r . L i u H a o q i o n g , a n e x e c u t i v e D i r e c t o r , c h a i r m a n o f t h e
Board, one of the founders of the Group and a Controlling
Shareholder
DEFINITIONS
– 22 –


--- page 32 ---
‘‘Ms. T ao Xiulan ’’............ M s . T a o X i u l a n , s p o u s e o f M r . L i u H a o q i o n g , o n e o f t h e
founders of the Group and a Controlling Shareholder
‘‘Ms. Yeung ’’............... M s . Y e u n g H o i K a , o n e o f t h e P r e - I P O I n v e s t o r s a n d a n
Independent Third Party
‘‘NDRC ’’.................. t h e N a t i o n a l D e v e l o p m e n t a n d R e f o r m C o m m i s s i o n （ 中華人
民共和國國家發展和改革委員會 ）
‘‘NEEQ ’’.................. t h eN a t i o n a lE q u i t i e sE x c h a n g ea n dQ u o t a t i o n s （ 全國中小企
業股份轉讓系統 ）
‘‘NEEQ Listing Withdrawal ’’. . . . the withdrawal of quotation and termination of listing and
trading of the shares of Zhonggan Communication on NEEQ
on 9 August 2019 upon the application submitted by
Zhonggan Communication
‘‘Negative List ’’............. t h eS p e c i a lA d m i n i s t r a t i v eM e a s u r e sf o rF o r e i g nI n v e s t m e n t
Entry (Negative List) (2021 Edition) （《外商投資准入特別管理
措施（ 負面清單 ）（ 2021 年版 ）》）
‘‘Nomination Committee ’’...... t h en o m i n a t i o nc o m m i t t e eo ft h eB o a r d
‘‘Northeastern Region ’’ . . . . . . . for the purpose of this prospectus, refers to Liaoning
Province, Jilin Province and Heilongjiang Province
‘‘Octuple Hills ’’ . . . . . . . . . . . . . Octuple Hills Limited, a business company with limited liability
incorporated in the BVI on 12 April 2022 and is wholly-owned
by Mr. Liu Dingyi
‘‘Offer Price ’’ .............. t h ef i n a lo f f e rp r i c ep e rO f f e rS h a r e( e x c l u s i v eo fb r o k e r a g e
of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction
levy of 0.00015% and Stock Exchange trading fee of
0.00565%) of not more than HK$1.25 and expected to be
not less than HK$1.13, at which the Offer Shares are to be
subscribed for and issued, or purchased and sold and which
is to be determined by agreement between the Sole Overall
Coordinator and the Sole Global Coordinator (for itself and
on behalf of the Underwriters) and the Company on the
Price Determination Date, as described in the paragraph
headed ‘‘Structure and Conditions of the Global Offering –
Pricing of the Global Offering ’’in this prospectus
‘‘Offer Share(s) ’’. . . . . . . . . . . . the Hong Kong Public Offer Shares and the International
Placing Shares (subject to the Over-allotment Option and
reallocation as described in the section headed ‘‘Structure
and Conditions of the Global Offering ’’in this prospectus)
DEFINITIONS
– 23 –


--- page 33 ---
‘‘Over-allotment Option ’’ . . . . . . the option expected to be granted by the Company under
the International Underwriting Agreement to the International
Underwriters, exercisable by the Sole Overall Coordinator
and the Sole Global Coordinator (for itself and on behalf of
the International Underwriters), pursuant to which the
Company may be required to allot and issue up to an
aggregate of 24,000,000 additional new Shares at the Offer
Price, representing 15% of the initial number of Offer Shares
offered under the Global Offering, at the Offer Price to,
among other things, cover the over-allocations (if any) in the
International Placing, as described in the section headed
‘‘Structure and conditions of the Global Offering ’’ in this
prospectus
‘‘On-going Project(s) ’’ ........ t h eG r o u p ’s project(s) where the agreement of which had not
expired or been terminated, and from which revenue had
begun to be recognised, as at specified date
‘‘PRC Legal Advisers ’’........ J u n Z e J u n L a w O f f i c e s , t h e C o m p a n y ’s legal advisers as to
PRC law
‘‘Pre-IPO Investment(s) ’’ . . . . . . the investment(s) in the Company undertaken by the Pre-
IPO Investors prior to the Global Offering, the details of
which are set out in the section headed ‘‘History and
Reorganisation – Pre-IPO Investments ’’in this prospectus
‘‘Pre-IPO Investor(s) ’’ ........ R u iD aB V I ,S h uZ h iC a y m a n ,Y o uP oB V Ia n dM s .Y e u n g
‘‘Pre-revenue Project(s) ’’...... t h eG r o u p ’s project(s) where the agreement of which had not
expired or been terminated, but from which no revenue had
yet been derived, as at specified date
‘‘Price Determination Date ’’. . . . the date, expected to be on or around Friday, 28 June 2024,
on which the Offer Price is fixed for the purpose of the
Global Offering
‘‘QYP Info T ech ’’. . . . . . . . . . . . Jian Qingyoupu Information T echnology Limited （ 吉安青優普
信息科技有限公司 ）, a limited liability company established in
the PRC on 1 January 2023, an associate of the Company
and indirectly owned as to 49% by the Company and 51%
by an Independent Third Party
‘‘Regulation S ’’. . . . . . . . . . . . . Regulation S under the U.S. Securities Act
‘‘Remuneration Committee ’’. . . . the remuneration committee of the Board
‘‘Renminbi ’’or ‘‘RMB
’’ ........ R e n m i n b i ,t h el a w f u lc u r r e n c yo ft h eP R C
DEFINITIONS
– 24 –


--- page 34 ---
‘‘Reorganisation ’’ ........... t h ec o r p o r a t er e o r g a n i s a t i o no ft h eG r o u pi np r e p a r a t i o nf o r
the Listing as described in the paragraph headed ‘‘History,
Reorganisation and Corporate Structure – Corporate
Reorganisation ’’in this prospectus
‘‘Rui Da BVI ’’ .............. R u iD aX i nT a oC a p i t a lM a n a g e m e n tC e n t r eL i m i t e d （ 睿達信
韜資本管理中心有限公司 ）, a business company with limited
liability incorporated in the BVI on 2 June 2022 wholly-
owned by Rui Da Xin T ao, one of the Pre-IPO Investors and
an Independent Third Party
‘‘Rui Da Xin T ao ’’ . . . . . . . . . . . Beijing Rui Da Xin T ao Ca pital Management Centre (Limited
Partnership)* （ 北京睿達信韜資本管理中心（ 有限合夥 ））,a
limited liability partnership established under the laws of the
PRC on 3 August 2015 and an Independent Third Party
‘‘SAFE ’’ .................. t h eS t a t eA d m i n i s t r a t i o no fF o r e i g nE x c h a n g eo ft h eP R C （ 中
國國家外匯管理局 ）
‘‘SAIC ’’................... t h e S t a t e A d m i n i s t r a t i o n f o r I n d u s t r y a n d C o m m e r c e o f t h e
PRC（ 中國國家工商行政管理總局 ）
‘‘SAT’’ ................... t h eS t a t eA d m i n i s t r a t i o no fT a x a t i o no ft h eP R C
（ 中國國家稅
務總局 ）
‘‘SFC ’’ ................... t h eS e c u r i t i e sa n dF u t u r e sC o m m i s s i o no fH o n gK o n g
‘‘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) ’’ ................ o r d i n a r y s h a r e s o f H K $ 0 . 1 e a c h i n t h e s h a r e c a p i t a l o f t h e
Company
‘‘Shareholder(s) ’’............ t h eh o l d e r ( s )o ft h eS h a r e s
‘‘Share Option Scheme ’’ . . . . . . the share option scheme conditionally approved and adopted
by the Company on 17 June 2024, the principal terms of
w h i c ha r es u m m a r i s e di nt h es e c t i o nh e a d e d‘‘Statutory and
General Information – D .S h a r eO p t i o nS c h e m e’’in Appendix
V to this prospectus
‘‘Shu Zhi Cayman ’’ .......... S h uZ h iS h e nK o n gI n v e s t m e n tL i m i t e d （ 數智深空投資有限公
司 ）, an exempted company with limited liability incorporated
in the Cayman Islands on 27 April 2022 wholly-owned by
Shu Zhi Shen Kong, one of the Pre-IPO Investors and an
Independent Third Party
DEFINITIONS
– 25 –


--- page 35 ---
‘‘Shu Zhi Shen Kong ’’. . . . . . . . Hainan Shu Zhi Shen Kong Investment Partnership (Limited
Partnership)* （ 海南數智深空投資合夥企業（ 有限合夥 ））,a
limited liability partnership established under the laws of the
PRC on 14 December 2020 and an Independent Third Party
‘‘Software Solution Services ’’. . . one of the business sub-segments under the Group ’s
Digitalisation Solution Services business segment, the
principal services of which main ly involve providing turnkey
solutions through system design planning and supply and
integration and technical support services of software
systems. For details, please refer to the paragraphs headed
‘‘Business – Principal services and business model ’’ in this
prospectus
‘‘Sole Overall Coordinator ’’or
‘‘Sole Global Coordinator ’’ ...
Zhongtai International Securi ties Limited, a corporation
licenced to carry out type 1 (dealing in securities) and type
4 (advising on securities) regulated activities under the SFO
‘‘Sole Sponsor ’’ . . . . . . . . . . . . Zhongtai International Capital Limited, a corporation licenced
to carry out type 1 (dealing in securities) and type 6
(advising on corporate finance) regulated activities under the
SFO, being the sole sponsor for the Listing
‘‘Stabilising Manager ’’. . . . . . . . Zhongtai International Securities Limited
‘‘State Council ’’............. t h eS t a t eC o u n c i lo ft h eP R C （ 中華人民共和國國務院 ）
‘‘Stock Borrowing Agreement ’’. . the stock borrowing agreement which may be entered into
between GT & Yangtze and the Stabilising Manager on or
about the Price Determination Date
‘‘Stock Exchange ’’........... T h eS t o c kE x c h a n g eo fH o n gK o n gL i m i t e d
‘‘subsidiary(ies) ’’. . . . . . . . . . . . has the meaning ascribed to it under the Listing Rules
‘‘substantial shareholder(s) ’’. . . . has the meaning ascribed to it under the Listing Rules
‘‘Sunny Hanmy ’’ . . . . . . . . . . . . Sunny Hanmy Information Service (Shanghai) Co., Ltd.* （ 陽
光恒美信息服務（ 上海 ）股份有限公司 ）, a limited liability
company established under the laws of the PRC on 24 April
2012, the shares of which was delisted from the NEEQ
(Stock Code: 833027) on 5 September 2018 and an
Independent Third Party
‘‘System(s) ’’. . . . . . . . . . . . . . . CCASS, FINI or any other platform, facility or system
established, operated and/or otherwise provided by or
through HKSCC
DEFINITIONS
– 26 –


--- page 36 ---
‘‘System Maintenance Services ’’ one of the business sub-segments under the Group ’s
Digitalisation Solution Services business segment, the
principal services of which mainly involve provision of
technical support and maintenance services for the software
and hardware systems provided under the Integrated
Solution Services. For details, please refer to the paragraph
headed ‘‘Business – Principal services and business model ’’
in this prospectus
‘‘T akeovers Code ’’. . . . . . . . . . . the Codes on T akeovers and Mergers and Share Buy-backs
issued by the SFC, as amended, supplemented or otherwise
modified from time to time
‘‘T elecommunications
Infrastructure Services ’’.....
one of the business segments of the Group which comprises
Infrastructure Construction Services and Infrastructure
Maintenance Services. For details, please refer to the
paragraph headed ‘‘Business – Principal services and
business model ’’in this prospectus
‘‘Track Record Period ’’ . . . . . . . the three years ended 31 December 2021, 2022 and 2023
‘‘Underwriters ’’ . . . . . . . . . . . . . the Hong Kong Underwriters and the International Underwriters
‘‘Underwriting Agreements ’’. . . . the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
‘‘United States ’’, ‘‘US’’or ‘‘U.S. ’’ . the United States of America
‘‘U.S. Securities Act ’’. . . . . . . . . the U.S. Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder
‘‘USD ’’or ‘‘US$’’ ............ U n i t e d S t a t e s d o l l a r s , t h e l a w f u l c u r r e n c y o f t h e U n i t e d
States
‘‘VAT’’ ................... v a l u e - a d d e dt a x
‘‘Western Region ’’. . . . . . . . . . . for the purpose of this prospectus, refers to Guizhou
Province, Yunnan Province, Inner Mongolia Autonomous
Region, Guangxi Zhuang Autonomous Region, Chongqing,
Sichuan Province, Tibet Autonomous Region, Shaanxi
Province, Gansu Province, Qin ghai Province, Ningxia Hui
Autonomous Region and Xinjiang Uygur Autonomous Region
‘‘WPX Info T ech ’’ . . . . . . . . . . . Jiangxi Wanpuxing Information T echnology Limited （ 江西灣普
興科技有限公司 ）, a limited liability company established in
the PRC on 28 February 2023, an associate of the Company
and indirectly owned as to 49% by the Company and 51%
by an Independent Third Party
DEFINITIONS
– 27 –


--- page 37 ---
‘‘Ying Hua BVI ’’............. Y i n gH u aI n v e stment Management Limited （ 英華投資管理有限
公司 ）, a business company with limited liability incorporated in
the BVI on 27 May 2022 wholly-owned by Ying Hua Investment
and an Independent Third Party
‘‘Ying Hua Investment ’’ . . . . . . . Gongqingcheng Ying Hua Investment Management Partnership
(Limited Partnership)* （ 共青城英華投資管理合夥企業（ 有限合
夥 ））, a limited liability partnership established under the laws of
the PRC on 27 October 2015 and an Independent Third Party
‘‘Y o uP oB V I’’.............. Y o u P o C o m m e r c e L i m i t e d （ 酉珀商務有限公司 ）, a business
company with limited liability incorporated in the British Virgin
Islands on 8 June 2022 wholly-owned by You Po Investment,
one of the Pre-IPO Investors and an Independent Third Party
‘‘Y o uP oI n v e s t m e n t’’. . . . . . . . . Shenzhen You Po Business Consulting Partnership (Limited
Partnership)* （ 深圳酉珀商務諮詢 合夥企業（ 有限合夥 ））,a
limited liability partnership established under the laws of the
PRC on 22 February 2022 and an Independent Third Party
‘‘Y u eD aI n v e s t m e n t’’. . . . . . . . . Gongqingcheng Yueda Investment Management Partnership
(Limited Partnership) （ 共青城躍達投資管理合夥企業（ 有限合
夥 ））, a limited liability partnership established under the
laws of the PRC on 14 April 2016 and an Independent Third
Party as at the Latest Practicable Date
‘‘Zhonggan BVI ’’. . . . . . . . . . . . Zhonggan Communication (BVI) Holding Co., Ltd, a
business company with limited liability incorporated in the
BVI on 24 May 2022 and is a direct wholly-owned subsidiary
of the Company
‘‘Zhonggan Communication ’’ . . . Zhonggan Communication (Group) Co., Ltd* （ 中贛通信（ 集團 ）
有限公司 ）, a company established in the PRC with limited
liability on 23 May 2002 and an indirect wholly-owned
subsidiary of the Company
‘‘Zhonggan HK ’’ . . . . . . . . . . . . Zhonggan Communication Hong Kong Limited, a limited
liability company incorporated in Hong Kong on 9 June 2022
and is an indirect wholly-owned subsidiary of the Company
‘‘%’’..................... p e rc e n t .
Unless expressly stated or otherwise required by the context, all data contained in this
prospectus are as at the Latest Practicable Date.
DEFINITIONS
– 28 –


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Unless otherwise specified, all references to any shareholding in the Company in this
prospectus assume the Over-allotment Option is not exercised and does not take into account of
any Shares which may be issued upon the exercise of any options which may be granted under
the Share Option Scheme.
If there is any inconsistency between the English translations and the Chinese names of
entities or enterprises established in Hong Kong or the PRC (as the case may be) or
qualifications awarded in Hong Kong or the PRC (as the case may be), the Chinese names shall
prevail. The English translation of names of entities or enterprises or qualifications in Chinese
marked with ‘‘*’’is for identification purpose only.
DEFINITIONS
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--- page 39 ---
This glossary contains explanations of certain terms used in this prospectus in
connection with the Group and its business. The terms and their meanings may not
correspond to standard industry meanings or usage of these terms.
‘‘5G’’ .................... t h ef i f t h - g e n e r a t i o nw i r e l e s sn e t w o r kt e c h n o l o g y
‘‘10G’’ . . . . . . . . . . . . . . . . . . . 10 Gigabit (i.e. one billion bits), in data communications, it is
commonly used for measuring the amount of data that is
transferred in one second between two telecommunications
points. A network with a data transfer speed of 10G offers
significantly faster data transmission compared to previous
generations, enabling high-speed connectivity for various
applications such as data centres, enterprise networks, and
telecommunications systems
‘‘10G-PON ’’ ............... 1 0G i g a b i tP a s s i v eO p t ical Network, a high-speed fibre optic
technology that enables the transmission of data, voice, and
video at a rate of 10G per second. It provides a cost-
effective solution for delivering high-bandwidth services over
a passive optical network infrastructure
‘‘AI’’..................... a r t i f i c i a li n t e l l i g e n c e
‘‘access network ’’........... i n t h e c o n t e x t o f a t e l e c o m m u n i c a t i o n s n e t w o r k , a n a c c e s s
network mainly serves to receive and transmit signals
between end-user devices (such as mobile phones,
telegraphs, data terminals and computers) and the
telecommunications network vi a the transmission network
‘‘base station ’’ . . . . . . . . . . . . . a fixed transceiver station serving as a central connection
point of access network which connects wireless devices to
a telecommunications network
‘‘big data ’’ ................ a c o m b i n a t i o n o f s t r u c t u r e d , s e m i - s t r u c t u r e d a n d
unstructured data collected by organisations that is too large
and complex to process using traditional methods. The big
data can be analysed by machine learning, modelling and
other advanced analytics applications to extract meaningful
insight to enhance business efficiency
‘‘CAGR ’’. . . . . . . . . . . . . . . . . . compound annual growth rate, calculated by subtracting one
from the result of dividing the ending value by its beginning
value raised to the power of one divided by the period length
GLOSSARY OF TECHNICAL TERMS
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--- page 40 ---
‘‘cloud computing ’’ . . . . . . . . . . the on-demand availability of computing resources over the
internet for applications, servers (physical servers and virtual
servers), data storage, development tools and networking
capabilities, hosted at a remo te data centre and managed by
a cloud services provider. Enterprises only pay for the cloud
computing services they use without building their own
computing resources
‘‘conduit ’’................. i nt h ec o n t e x to fat e l e c o m m u n i c a t i o n sn e t w o r k ,ac o n d u i ti s
a means of transmitting data from one device or network to
a n o t h e r .I tc a nb ei nt h ef o r mo fap h y s i c a lo rv i r t u a l
connection
‘‘core network ’’............. i n t h e c o n t e x t o f a t e l e c o m m u n i c a t i o n s n e t w o r k , a c o r e
network is the backbone network which interconnects
networks by providing paths for the exchange of information
between various sub-networks. Typically, a core network
comprises and is supported by a collection of high-capacity
communications facilities, hardware and devices and
software which are maintained by telecommunications
network operators. It allows telecommunications services to
be provided to end-users and transfers network traffic at
high speed
‘‘digitalisation solution services ’’. digitalisation solution services, in the context of the smart
city solution services industry , refer to the turnkey solution
from planning, developing, in stalling, and optimising the
hardware and software that integrates physical infrastructure,
information infrastructure, social infrastructure, and commercial
infrastructure, encompassing an area ’s population, transportation
assets, energy resources, commercial activity, and communications.
This involves the application of tra ditional technologies including
digitalisation, ICT to design system that connects different
infrastructures for collection of data and operation of
infrastructure, as well as the use of advanced technologies such
as IoT , cloud computing, and AI for real-time data collection, real-
time incident response, rapid an alytics and automated decision
making
GLOSSARY OF TECHNICAL TERMS
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--- page 41 ---
‘‘discriminative AI ’’ .......... a t y p e o f A I m o d e l w h i c h m a i n l y f o c u s e s o n d a t a
classification and statistical analysis based on given
parameters or examples. As opposed to the advanced forms
of AI which involve content reconstruction or generation by
themselves, discriminative AI is a more basic form of AI
which simply analyses the patterns or features in the input
data to assign labels to new data. Discriminative AI models
are widely adopted in digitalisation solutions and used in
tasks such as image recognition, language processing, fraud
detection, and recommendation systems
‘‘GB’’.................... t h e G B s t a n d a r d s （ 中華人民共和國國家標準 ）which are the
PRC national standards issued by the Standardisation
Administration of China （ 中國國家標準化管理委員會 ）.G B
stands for Guobiao （ 國 標 ）, which means ‘‘national
standard ’’. Mandatory standards are prefixed ‘‘GB ’’.
Recommended standards are prefixed ‘‘GB/T ’’ (T stands for
tuijian（ 推薦 ）, which means ‘‘recommended ’’). The GB
standards set forth specific requirements for various types of
products and services
‘‘GDP’’................... g r o s sd o m e s t i cp r o d u c t
‘‘ICT’’.................... i n f o r m a t i o nc o m m u n i c a t i o n st e c h n o l o g y
‘‘Industrial Internet of Things ’’
or ‘‘IIoT ’’................
a subset of IoT that applies specifically to industrial settings
focusing on machine-to-machine communication, big data
and machine learning, which enables industries and
enterprises to improve efficiency and reliability in their
operations
‘‘Internet of Things ’’
or ‘‘IoT’’ . . . Internet of Things, which describes the network of devices
that are embedded with sensors, software and other
technologies for the purpose of connecting and exchanging
data with other devices and systems over the Internet or
other communications networks
‘‘ISO’’. . . . . . . . . . . . . . . . . . . . International Organisation for Standardisation, an international
standard development organisation which develops and
publishes standardisation in technical and non-technical fields
‘‘last mile ’’ . . . . . . . . . . . . . . . . the final portion of the telecommunications networks that
delivers telecommunications signals to the end-users ’
premises
GLOSSARY OF TECHNICAL TERMS
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--- page 42 ---
‘‘module(s) ’’ . . . . . . . . . . . . . . . in the context of computer software, a module is a set of
computer coding composed to deliver specific functionality
which forms a component of a software programme. Through
the process of software development, software developers
can customise a software comprising multiple separate and
interchangeable modules or components to cater to specific
needs of end-users
‘‘node(s) ’’................. i nt h ec o n t e x to fat e l e c o m m u n i c a t i o n sn e t w o r k ,an o d ei sa
connection point within a communications network and an
endpoint for data transmission or redistribution. Nodes are
programmed or engineered to recognise, process and
forward data transmissions to other network nodes
‘‘Optical Line T erminal ’’or ‘‘OLT’’ a key component in a fibre optic network. It acts as a central
hub that manages the communication between the
telecommunications service provider ’s network and the
customer ’s premises. It is responsible for distributing and
managing data to multiple devices connected to the network
‘‘telecommunications ’’. . . . . . . . the transmission of information by various types of
technologies over wire, radio, optical, or other
electromagnetic systems
‘‘telecommunications network ’’. . a communication system that co nstitutes the interconnection
of multiple telecommunicati ons systems for end-users to
communicate with each other. It consists of a group of nodes
interconnected by telecommunications links that are used to
exchange information between the nodes, and usually has a
three-layer structure comprising the core network,
transmission network and access network
‘‘tower ’’ . . . . . . . . . . . . . . . . . . a high-erected steel structure or a pole for hosting antennas
or other equipment
‘‘transmission network ’’....... i n t h e c o n t e x t o f a t e l e c o m m u n i c a t i o n s n e t w o r k , a
transmission network transmits electrical or optical signals,
consisting of various nodes and links that transmit, transfer,
and receive information, and provides protected signal
transmission connection channels to other networks utilising
transmission equipment (such as base stations) as well as
electrical or optical cables or optical fibers, wireless or other
electromagnetic systems as the conduit
GLOSSARY OF TECHNICAL TERMS
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--- page 43 ---
‘‘virtual reality ’’or ‘‘VR’’ . . . . . . . the use of computer modelling and simulation that enables a
person to interact with an artificial three-dimensional visual
or other sensory environment. VR applications immerse the
user in a computer-generated environment that simulates
reality through the use of interactive devices (such as
goggles, headsets, gloves, or body suits) which send and
receive information
‘‘sq.m. ’’ .................. s q u a r em e t e r
GLOSSARY OF TECHNICAL TERMS
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This prospectus contains forward-looking statements relating to the plans, intentions,
beliefs, objectives, expectations and predictions of the Group, which are, by their nature, subject
to significant risks and uncertainties and may not represent the Group ’s overall performance for
the periods of time to which such statements relate. These forward-looking statements are
based on numerous assumptions regarding the Group ’s present and future business strategies
and the environment in which it will operate in the future. Important factors that could cause the
actual performance or achievements of the Group to differ materially from those in the forward-
looking statements include, wit hout limitation, the following:
 its operations and business prospects;
 the amount and nature of, potential for and future development of its business;
 future developments, trends and conditions, c ompetition for its business activities and
future development in the industry and the geographical markets in which the Group
operates;
 its strategies, plans and objectives and its various measures to implement or achieve
such strategies, plans and objectives;
 its ability to meet the changing needs of its customers;
 its dividend distribution plans or dividend policy;
 its financial condition and performance;
 its needs for capital;
 changes in the laws, rules and regulations in the countries in which the Group
operates and the rules, regulations and policies of the relevant government authorities
relating to all aspects of its business, including changes in tax policy and
environmental regulations;
 general political and economic conditions in Hong Kong, the PRC and overseas;
 the general economic trends and conditions;
 changes in competitive conditions and its ability to compete under these conditions;
 its ability to recruit and retain employees and personnel;
 the general economic trends, market and business conditions in the countries or
regions in which the Group operates;
 change or volatility in prices, volumes, operations, margins, overall market trends, risk
management, interest rates and exchange rates;
 other statements in this prospectu s that are not historical facts;
 realisation of the benefits or its future plans and strategies; and
 other factors beyond its control.
FORWARD-LOOKING STATEMENTS
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When used in this prospectus, the words ‘‘aim’’, ‘‘anticipate ’’, ‘‘believe ’’, ‘‘can’’, ‘‘consider ’’,
‘‘continue ’’, ‘‘could ’’, ‘‘estimate ’’, ‘‘expect ’’, ‘‘forecast ’’, ‘‘going forward ’’, ‘‘intend ’’, ‘‘may’’, ‘‘might ’’,
‘‘ought to ’’, ‘‘plan ’’, ‘‘predict ’’, ‘‘project ’’, ‘‘propose ’’, ‘‘potential ’’, ‘‘seek ’’, ‘‘shall ’’, ‘‘should ’’, ‘‘will ’’,
‘‘would ’’, ‘‘with a view to ’’ and the negatives of these terminologies and similar expressions are
intended to identify forward-looking statement s. The Group makes these forward-looking
statements based on current plans and estimates and they speak only as at the date they were
made. These forward-looking statements are not a guarantee of future performance. Actual
outcomes could be caused to differ materially from those expressed in any forward-looking
statements by, including without limitation, the risk factors set forth under the section headed
‘‘Risk Factors ’’in this prospectus.
Although the Directors believe that the Company ’s current views as reflected in these
forward-looking statements based on currently available information are fair and reasonable and
that the Directors confirm that these forward-lo oking statements are made after due and careful
consideration, the Company can give no assurance that these views will prove to be correct.
You are strongly cautioned that reliance on any forward-looking statements in this prospectus
involves known and unknown risks and uncertainties. The risks and uncertainties in this regard
include, but are not limited to, those identified in the section headed ‘‘Risk Factors ’’ in this
prospectus, many of which are not within the control of the Group. In light of these and other
uncertainties, the inclusion of forward-looking statements in this prospectus should not be
regarded as representations by the Company or the Directors that the Group ’s plans or
objectives will be achieved.
Should one or more of the risks or uncertainties materialise, or should underlying
assumptions prove to be incorrect, the financial condition of the Group may be adversely
affected and may vary materially from those described herein as anticipated, believed, estimated
or expected.
The information and assumptions contained in the forward-looking statements have not
been independently verified by the Company, the Controlling Shareholders, the Sole Sponsor,
the Sole Overall Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters, any other party involved in the Global Offering or their respective
directors, officers, employees, advisers or agents and no representation is given as to the
accuracy or completeness of such information or assumptions on which the forward-looking
statements are made. Additional factors that could cause actual performance or achievements of
the Group to differ materially include, but are not limited to, those discussed under the section
headed ‘‘Risk Factors ’’and elsewhere in this prospectus.
Subject to the requirements of applicable laws, rules (including the Listing Rules) and
regulations, the Company does not have any and undertakes no obligation to update or
otherwise revise any forward-looking statements in this prospectus, whether as a result of new
information, future events or developments or otherwise. As a result of these and other risks,
uncertainties and assumptions, the forward-looking events and circumstances contained in this
prospectus might not occur in the way the Company expects, or at all. Accordingly, you should
not place undue reliance on any forward-looking information. All forward-looking statements
contained in this prospectus are qualified by reference to the cautionary statements set out in
this section.
In this prospectus, statements of or reference to the Group ’s intentions or that of any of the
Directors are made as at the date of this prospectus. Any such intentions may change in light of
future developments.
FORWARD-LOOKING STATEMENTS
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--- page 46 ---
Prospective investors should consider carefully all the information set forth in this
prospectus and, in particular, should consider the following risks and special considerations in
connection with an investment in the Company before making any investment decision in
relation to the Global Offering. The occurrence of any of the following risks may have an
adverse effect on the business, results of operations, financial conditions and prospects of
the Group.
This prospectus contains certain forward-looking statements regarding plans, objectives,
expectations and intentions of the Group which involve risks and uncertainties. The Group ’s
actual results could differ materially from those discussed in this prospectus. Factors that
could cause or contribute to such differences include those discussed below as well as those
discussed elsewhere in this prospectus. The trading price of the Offer Shares could decline
due to any of these risks, and you may lose all or part of your investment.
There are certain risks relating to an inves t m e n ti nt h eS h a r e s .T h e s er i s k sc a nb eb r o a d l y
categorised into: (i) ris ks relating to the Group ’s business; (ii) risks rela ting to the industry in
which the Group operates; (iii) risks relating to the PRC; (iv) risks relating to the Global Offering
and the Shares; and (v) risks relating to statements made in this prospectus and from other
sources.
RISKS RELATING TO THE GROUP ’SB U S I N E S S
The Group ’s projects are concentrated in the Cen tral Region of the PRC, in particular
Jiangxi Province, and any material change pertaining to Jiangxi Province may materially
and adversely affect the Group ’s business, results of operations and profitability
The Group was founded and is based in Jiangxi Province where it ranked third amongst all
telecommunications network infrastructure construction and maintenance services providers in
terms of revenue in 2023, and as such, during the Track Record Period, the majority of its
revenue was derived from its projects located in the Central Region of the PRC. In particular,
revenue derived from projects located in Jiangxi Province amounted to approximately RMB300.0
million, RMB188.6 million and RMB312.0 million, accounting for approximately 62.6%, 45.7%
and 51.2% of the Group ’s total revenue for the years ended 31 December 2021, 2022 and 2023,
respectively. Given the Group ’s concentration in revenue from Jiangxi Province, the Group ’s
business is highly subject to the economic conditions and government policies which affect
Jiangxi Province as well as the resources and budgets which the Group ’s customers devote to
Jiangxi Province. Accordingly, where there is any material change in respect of any of the above
factors, the availability of tenders as well as their size and scale may be affected, which may in
turn materially and adversely affect the Group ’s business, results of operations and profitability.
During the Track Record Period, the Group ’s tender success rate for T elecommunications
Infrastructure Services projec ts outside of Jiangxi Province was approximately 18.9%, 16.6%
and 18.3%, respectively, which was comparatively lower than its tender success rate for projects
within Jiangxi Province. Furthermore, almost all of the Group ’s revenues from its Digitalisation
Solution Services projects during the Track Record Period were for projects located in Jiangxi
Province. Therefore, it is expected that the Group will continue to derive a substantial portion of
its revenue from its projects located in Jiangxi P rovince where it maintains a competitive edge
and possesses broad local knowledge, and there is no guarantee that the Group will be able to
RISK FACTORS
– 37 –


--- page 47 ---
reduce its reliance on projects within Jiangxi Province. In the event that the Group is unable to
reduce its reliance on projects within Jiangxi Province, the Group will continue to be subject to
the various factors mentioned which affect Jiangxi Province.
The Group had a concentration of customers during the Track Record Period, and any
decrease or loss of business from the Group ’s major customers could adversely and
substantially affect the Group ’s operations and financial conditions
During the Track Record Period, the Group ’s revenue was relatively concentrated and
largely attributable to Customer A, Customer B, Customer C and Customer D, which in
aggregate amounted to approximately RMB4 65.1 million, RMB403.5 million and RMB578.4
million, representing approximately 97.1%, 97.7 % and 94.9% of its total revenue, respectively.
In light of the above, the Group faces the ri sks associated with having customer
concentration in the future. There is no assurance that any of the Group ’s major customers will
continue to engage us as they do currently, or the revenue generated from the businesses with
them can be maintained or increased in the future. If there is a reduction of successful tenders
by the Group, or cessation of business relationships between the Group and its major customers
for whatever reasons, or if the Group fails to diversify or expand its customer base, the
business, financial conditions, results of operations and gross profit of the Group may be
materially and adversely affected.
The Group ’s business operates on a non-recurring an d project-by-project basis and failure
to obtain new projects could materially affect the Group ’sb u s i n e s sa n dr e s u l t so f
operations
The Group ’s business operates on a project-by-project basis, as such they are non-
recurring in nature. In order for the Group to undertake new projects, the Group must either
participate in open tendering to compete for projects made available by potential customers or
await customers to approach the Group to solicit its services. During the Track Record Period,
the Group ’s T elecommunications Infrastructure Services projects were generally awarded by way
of open tender and the Group ’s tender success rate was app roximately 20.6%, 22.5% and
21.3%, respectively. For Digitalisation Solution Services projects, the Group ’s customers would
typically approach the Group via single-source procurement method and/or by way of invitation
to quote to directly solicit its Digitalisation Solution Services as opposed to open tendering
process, and the Group had secured 11, 22 and 32 Digitalisation Solution Services projects
during the Track Record Period. As such, g iven the non-recurring nature of the Group ’s projects,
the Directors belie ve that the Group ’s future growth and success will depend on the Group ’s
ability to continue to secure projects. The Group cannot assure you that it will be able to secure
projects from the Group ’s existing or potential customers. In the event that there is a significant
decrease in the number of projects or scale in terms of contract value of the projects awarded
by the Group ’s customers, the Group ’s business and results of operations may be materially and
adversely affected.
RISK FACTORS
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The Group may not be able to transfer its contract assets to trade receivables and ensure
the settlement of its trade receivables in a timely manner or at all due to reasons beyond
the Group ’s control and as a result, the Group ’s liquidity may be materially and adversely
affected
The Group ’s contract assets amounted to appro ximately RMB513.5 million, RMB539.6
million and RMB726.8 million as at 31 December 2 021, 2022 and 2023, respectively, which
primarily arose when the Group made efforts or input towards the satisfaction of performance
obligation under its T elecommunications Infrastructure Service projects, however, the right to
receive payment from its customers is subject to the Group satisfying certain pre-agreed
conditions. Upon satisfying such conditions, the contract assets will then be transferred to trade
receivables. Based on the contracts between th e Group and the relevant customers, in order to
receive payment from its customers, the Group must have completed the relevant works
required and passed the customer ’s inspection and acceptance procedures for progress
payment and the settlement audit procedures for final payment. Thus, the transfer of the
Group ’s contract assets to trade receivables will depend on the timing of the completion of
certain procedures by the customers, which may vary among different customers based on their
own internal procedural requirements and other considerations.
In addition, the Group ’s trade receivables amounted to a pproximately RMB229.8 million,
RMB272.8 million and RMB275.6 million as at 31 De cember 2021, 2022 and 2023, respectively,
which arose when the Group issued invoices to its customers. However, the timing of issuance
of invoices will again depend on the completion of internal procedures of the customers, which
may vary among different customers based on their own internal procedural requirements and
other considerations.
The Group cannot assure you that the Group will be able to transfer its contract assets to
trade receivables, and ensure the settlement of its trade receivables, on time or at all. In such
circumstances, the Group may be required to recognise significant amount of loss allowances
for trade receivables and contract assets, which may have a material adverse effect on the
Group ’s financial condition and results of operations. Furthermore, the Group ’s liquidity pressure
arising from the uncertainty and delay in timing of completion of internal procedures by its
customers may intensify if the number of sizeable projects increases in the future. If the Group
is unable to transfer its contract assets to trade receivables and ensure the settlement of its
trade receivables in a timely manner, the Group ’s liquidity may be materially and adversely
affected.
RISK FACTORS
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The Group experienced high level of turnove r days for trade and bills receivables and
contract assets during the Track Record Perio d, and its cash flows may further deteriorate
due to potential mismatches in the time between receipt of payments from the Group ’s
customers and payments to the Group ’s suppliers, both of which may impact its operating
cash flow position
The Group relies on its suppliers to provide the necessary labour and materials for its
projects, and relies upon the cash inflow from it s customers to meet the payment obligations
towards its suppliers. The Group ’s cash inflows are dependent upon a variety of factors
including certification by its cus tomers or their agents and the pro mpt settlement of its invoices.
If such payment is delayed, the Group may be required to fund the cost of works for a lengthy
period of time until the Group ’s payment application is approved and paid for. As at 31
December 2021, 2022 and 2023, the Group ’s trade and other payables amounted to
approximately RMB443.5 million, RMB437.6 m illion and RMB677.5 million, respectively.
Whereas for the corresponding dates, the Group ’s current portion of trade and other receivables
amounted to approximately RMB219.8 million, RMB305.0 million and RMB244.6 million, while its
contract assets amounted to approximately R MB513.5 million, RMB539 .6 million and RMB726.8
million.
During the Track Record Period, the Group experienced high level of turnover days for
trade and bills receivables and contract assets of approximately 503.6, 689.6 days and 545.3
days, respectively. Such prolonged turnover period was primarily due to (i) the lengthy
inspection and acceptance and settlement audit processes of its customers for Infrastructure
Construction Services projects; and (ii) extensio no fp a y m e n tt e r m si nr e l a t i o nt of i v eI n t e g r a t e d
Solution Services projects. The Group recognised revenue and corresponding contract assets
for its Infrastructure Construction Services projects based on the work progress. However, the
Group was entitled to (i) receive progress payment and issue interim VAT invoice only after the
completion of inspection and acceptance procedures carried out by its customers and/or their
agents and (ii) receive final payment (less retention money (if any)) and issue final VAT invoice
only after completion of settlement audit procedures, which were typically arranged by its
customers in stages. Such processes generally take a considerable amount of time after the
recognition of revenue and the corresponding contract assets, resulting in a substantial balance
of contract assets, which would be transferred to trade receivables after the completion of the
inspection and acceptance and settlement audit. Following the completion of inspection and
acceptance and settlement audit, the Group could receive progress payment and final payment,
respectively, from customers after a credit period of up to 90 days. This resulted in a significant
balance of trade receivables and contract assets on the Group ’s balance sheet, contributing to
the extended turnover period for trade and bills receivables and contract assets.
Additionally, customers in Digitalisation Solu tion Services tend to settle payments in stages
after a relatively substantial period of time subsequent to delivery and acceptance of work. In
particular, for some of the Group ’s large-scale Digitalisation Sol ution Services projects, the
Group may only receive payment after the end users have made the corresponding payment to
the Group ’s customers, and the Group had extended the payment terms in relation to the five
Integrated Solution Services projects in view of the temporary liquidity constraints faced by the
end users, which include regulatory authorities and public institution, due to the COVID-19
pandemic. For details, please refer to the paragraphs headed ‘‘Financial Information – Analysis
RISK FACTORS
– 40 –


--- page 50 ---
of major components of the consolidated statement of financial position – Trade and bills
receivables – Trade and other receivables – Turnover days for trade and bills receivables and
contract assets ’’in this prospectus.
Furthermore, even if the Group ’s customers settle such payments on time and in full, there
can be no assurance that the Group would not experience any significant cash flow mismatch
which would affect the Group ’s operating cash flow position as the Group may be required to
provide prepayments pursuant to the arrangement with its suppliers. During the Track Record
Period, the Group would in certain circumstances, depending on the scale of works required,
provide its labour suppliers with an advance payment of approximately 50% of the contract
value as stipulated in the work order within 15 days after the commencement of work. Similarly,
the Group ’s hardware and software suppliers would typically require a portion of the contract
value as prepayment with the balance to be paid after the delivery of the materials.
The abovementioned cash flow mismatches and high turnover days for trade and bills
receivables and contract assets recorded during the Track Record Period can potentially lead to
material adverse impact on the Group ’s operating cash flow position as well as its ability to fund
future capital expenditure. For example, it may negatively affect the Group ’s liquidity and
operating cash flow position, leading to less readily available cash and delays in cash inflow to
fund its day-to-day operations, such as meeting payroll, settlement of trade debts suppliers, and
payment for other expenses, etc. If the Group undertakes a large number of large-scale
projects, it may also pose significant pressure on its cash flow and the Group may record net
operating cash outflow. Indeed for the years ended 31 December 2021 and 2022, the Group
recorded net cash used in operating activities of approximately RMB12.2 million and RMB36.7
million, respectively, which was mainly attrib utable to the increase in contract assets and
increase in trade and other receivables. Moreover, the Group ’s ability to fund future capital
expenditure may also be negatively impacted. W ithout adequate operating cash flow, the Group
may need to rely on external financing sources, such as borrowing from banks or issuing debt,
to fund its future capital expenditure. This can increase the Group ’s debt burden and associated
financing costs, potentially impact ing its financial stability and prof itability and restricting its long-
term growth and competitiveness.
In light of the operating cash outflow position and the high level of turnover days for trade
and bills receivables and contract assets, the Group has adopted certain cash flow management
measures. For details, please refer to the paragraphs headed ‘‘Financial Information – Working
capital – Measures to manage the Group ’s liquidity and improve its working capital position ’’and
‘‘Financial Information – Analysis of major components of the consolidated statement of financial
position – Trade and bills receivables – Trade and other receivables ’’ in this prospectus.
However, there can be no assurance that the Group ’s cash flow management measures could
function properly or at all. If there is any signif icant and substantial cash flow mismatch, the
Group may need to raise funds by resorting to internal resources and/or external financial
resources in order to meet its payment obligations in full and on time.
The Group ’s high level of indebtedness may persist or increase in the future
During the Track Record Period, the Group relied on bank borrowings to fund its operations
which resulted in the Group incurring a substantially high level of indebtedness. As at 31
December 2021, 2022 and 2023, the Group ’s bank borrowings amounted to approximately
RMB311.5 million, RMB375.2 million and RMB3 47.5 million, respectively, while the Group ’sc a s h
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and cash equivalents merely amounted to RMB39.9 million, RMB68.6 million and RMB81.5
million, respectively. Further, the Group ’s gearing ratio (which is calculated by dividing the
Group ’s total debts, which included interest-bearing bank overdrafts and bank borrowings, by its
total equity) as at 31 December 2021, 2022 and 2023 was approximately 2.5, 2.0 and 2.7 times
as at the respective year end. Given the Group ’s high level of indebtedness, there may be
certain ramifications to which the Group is exposed, including:
 increasing the Group ’s vulnerability to adverse general economic and industry
conditions;
 requiring the Group to dedicate a substantial portion of its cash flow from operating
activities for payment of its interest and capital on its debt, thereby reducing available
cash flow for its business expansion, working capital and other general corporate
purposes;
 limiting the Group ’s flexibility in planning for or rea cting to changes in its businesses
and the industry in which the Group operates;
 placing the Group at a competitive disadvantage as compared to its competitors that
have lower levels of indebtedness;
 limiting the Group ’s ability to borrow additional funds; and
 increasing the Group ’s cost of additional financing.
As the Group relies on bank borrowings to fund its operations, the Group may incur
additional indebtedness in the future. However, the Group ’s ability to generate sufficient cash to
satisfy its existing and future debt obligations will depend upon its ability to transfer its contract
assets to trade receivables, and the timeliness of settlement of its trade receivables by its
customers, which are both subject to factors beyond the control of the Group, as well as its
future operating performance, which will be affected by, among other things, prevailing economic
conditions, PRC governmental regulation, demand for the services offered by the Group and
other factors, many of which are beyond the Group ’s control. Accordingly the Group may not
generate sufficient cash flow to pay its anticipated operating expenses and to service its debt, in
which case the Group will be forced to adopt alter native strategies that may include actions
such as disposing of assets, restructuring or refinancing indebtedness, or seeking equity capital.
These strategies may not be implemented on satisfactory terms, or at all, and, even when
implemented, may result in an adverse effect on the Group business, results of operations and
financial condition.
As at 31 December 2021, 2022 and 2023, the agreements with respect to the Group ’s
borrowings with one of its principal banks which amounted to approximately RMB155.2 million,
RMB155.1 million and RMB127.2 million, were s ubject to loan covenant s relating to certain
financial ratios based on the borrower ’s balance sheet that are commonly found in lending
arrangements with financial institutions. As advised by the PRC Legal Advisers, the Group was
unable to fulfill certain requirements relating to financial ratios during the Track Record Period.
According to the terms of the loan agreements, if the Company were to breach such covenants,
the relevant bank borrowings may become repayable on demand.
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There is also no assurance that the Group will always be able to obtain the required debt
financing in the future, or that it would be able to arrange for restructuring or refinancing when
its bank borrowings become due. If the Group is unable to obtain or renew its loan facilities, its
results of operations and financial condition may be materially and adversely affected.
The Group may not be able to adequately protec t its intellectually property rights, and the
Group may also be exposed to intellectual pro perty infringement or misappropriation
claims
The Group relies primarily on a combination of patent, trademark and copyright
registrations as well as confidentiality agreements, to safeguard its intellectual property rights.
As at the Latest Practicable Date, the Group has registered 25 trademarks and over 120
software copyrights and obtained 14 patents in the PRC which are or may be material to the
Group ’s business. For further details as to the Group ’s intellect property rights, please refer to
the paragraphs headed Statutory and General Information –‘ ‘ B. Further Information about the
Group ’s business – 2. Intellectual proper ty rights of the Group ’’in Appendix V to this prospectus.
Despite the Group ’s measures and efforts, unauthorised parties may attempt to copy or
otherwise obtain and use its intellectual property rights, and it is difficult to monitor unauthorised
use of such intellectual property rights. In addition, the Group ’s competitors may independently
develop technology and/or know-how similar to the Group ’s. The measures taken by the Group
may not be sufficiently adequate to prevent misappropriation or unauthorised use of the Group ’s
intellectual property rights. Furthermore, there is also no assurance that infringement of the
Group ’s intellectual property rights does not exist now or that it will not occur in the future. The
Group may, from time to time, be required to initiate litigation to protect and enforce its
intellectual property rights if necessary. Such litigation could incur substantial costs and lead to
a diversion of resources, which could negatively affect the operational results, profitability and
business prospects of the Group. Even if such litigation is resolved in favour of the Group, it
may not be able to successfully enforce the judgment and remedies awarded by the court, and
such remedies may not be adequate to compensate the Group for its actual or anticipated
related losses, whether tangible or intangible. Any negative publicity and complaints regarding
any infringing party ’s unauthorised uses of the Group ’s intellectual property rights could confuse,
dilute or tarnish, directly or indirectly, the Group ’s appeal and reputation, which could in turn
materially and adversely affect the business of the Group.
In addition, the Group ’s projects will often involve certain intellectual property rights of its
own or of third parties. There is no guarantee that these intellectual property rights do not or will
not infringe those of others, as the relevant laws and regulations relating to intellectual property
rights are often highly complex. In the event that there are claims against the Group for
infringement of intellectual property rights, the Group would need to divert resources to defend
such claims, whether such claims are valid or not. The Group may also be required to
compensate the claimant for damages suffered as a result of any infringement. There is no
assurance that the Group will not face such cl aims in future. In such event, the business,
financial condition and results of operations of the Group may be materially and adversely
affected.
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The Group relies on the performance, quality a nd the continued supply of labour, ancillary
construction materials, hard ware and third-party software s ystems and technical support
services etc. by its suppliers, and in particular labour suppliers, to complete certain parts
of the Group ’sp r o j e c t s
The Group is dependent on the performance, quality and the continued supply of labour,
ancillary construction materials, hardware and third-party software and technical support
services by its suppliers to main tain the provision of the Group ’s services to its customers. The
Group ’s five largest suppliers in each year during the Track Record Period accounted for
approximately 58.3%, 71.7% and 61.8% of the Group ’s total purchases in aggregate, and the
Group ’s largest supplier in each year during the Track Record Period accounted for
approximately 32.6%, 32.3% and 19.2% of its total purchases. Amongst the Group ’s five largest
suppliers in each year during the Track Record P eriod, the majority were labour suppliers. In
general, the Group does not enter into long term contracts with its labour suppliers, as such,
there is no assurance that they will be able to continue to provide stable and quality services to
the Group at prices acceptable to the Group, or that it can maintain its relationships with them in
the future. If any of the Group ’s five largest suppliers in each year during the Track Record
Period are unable to provide the required services to the Group, and the Group is unable to find
alternative suppliers on similar or better quality and pricing terms, the Group ’s business, results
of operations and profitability may be adversely affected.
In addition, when the Group engages labour suppliers to perform certain parts of the works
in the Group ’s projects, the Group is ul timately responsible to its customers for the works
completed by its labour suppliers, the Group is exposed to risks in relation to the non-
performance, delayed performance, sub-standard performance or non-compliance of its labour
suppliers. Although the Group has implemented certain measures to monitor the quality and
progress of works completed by its labour suppliers, there is no assurance that the Group is
able to monitor the performance of these labour suppliers as efficiently and effectively as with its
own employees. The Group may as a result experience issues relating to the quality of work or
delay in delivery of its services, and may incur additional costs arising from managing its labour
suppliers, remedying defects or delays caused by its labour suppliers. These may materially and
adversely affect the Group ’s profitability, results of operations and reputation, and result in
litigation and damages claims. If the Group ’s labour suppliers violate any laws, rules or
regulations, the Group may expose itself to prosecutions by relevant authorities and may
become liable to claims for losses and damages, which may also materially and adversely affect
the Group ’s operations and financial position. Any poor performance or non-compliance of the
Group ’s labour suppliers may also affect the Group ’s reputation, and in turn may materially and
adversely affect its business and results of operations.
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Failure to properly estimate th e risks, time and costs involved in a project or delays in
completion may lead to cost overruns and affect the Group ’s financial conditions and
profitability
When determining the offer price for its projects, the Group generally adopts a cost-plus
pricing model after taking into account factors including, the nature, scale, complexity and
location of the relevant project, as well as the estimated material, labour and equipment cost. As
such, whether the Group is able to achieve its target profitability in any project is significantly
dependent on its ability to accurately estimate and control these costs . The actual time taken
and cost involved in implementing the Group ’s project may be adversely affected by a number of
factors, such as shortage or cost escalation of materials and labour, adverse weather conditions,
accidents, and any other unforeseen problems and circumstances. Any of the aforesaid factors
may give rise to delays in completion of works or cost overruns, which in turn may result in a
lower profit margin or even a loss for a project, thereby materially and adversely affecting the
Group ’s financial condition, profitability or liquidity.
In addition, the Group ’s projects are typically subject to specific completion schedule
requirements and the Group may be liable to pay liquidated damages for delay in completion of
works if extension of time is not granted by its customers, or where extension of time is not
provided for under the relevant contract, and the Group is required to comply with the agreed
schedule regardless of occurrence of any event that is beyond the Group ’s control. Liquidated
damages are typically calculated by the number of days delayed times a pre-determined fixed
amount per day. Despite the fact that the Group did not incur any liquidated damages during the
Track Record Period, there is no assurance that it will not incur such damages in the future. Any
failure to meet the pre-agreed time schedule requirements may result in the Group being liable
to pay significant liquidated damages, and if it is unable to hold the relevant labour supplier
liable or obtain compensation for the liquidated damages, Group ’s business, financial condition,
results of operations, reputation and prospect may be materially and adversely affected.
The Group ’s project backlog is not indicative of the Group ’s future earnings and operation
results
The Group ’s project backlog represents the total outstanding contract value of its On-going
Projects and Pre-revenue Projects as at certain ye ar-end dates, which is calculated by aggregating
the maximum or estimated contract value of the Group ’s On-going and Pre-revenue Projects, minus
the actual amount of revenue recognised (VAT in clusive) and the remaining contract value of the
completed project during the relevant year. For the years ended 31 December 2021, 2022 and
2023, the ending balance of the Group ’s backlog was approximately RMB584.4 million,
RMB1,135.6 million and RMB876.7 millio n, respectively. For details, please refer to the paragraphs
headed ‘‘Business – Projects – Project backlog ’’in this prospectus. Backlog is not a measurement
defined by generally accepted accounting principles and may not be indicative of future results of
operations. In calculating its backlog, the Grou p had adopted the contract value as set out in the
relevant contracts and assumed that the entire value of works under the contracts would be
required to be carried out. However, while the framework agreement in respect of its
T elecommunications Infrastructure Services projects entered into between the Group and its
customer would typically set out the maximum or estimated contract value, the customer is
generally not obligated to place work orders up to the maximum or estimated contract value and
may reduce the work scope at its liberty by not placing additional work orders. It is therefore
beyond the control of the Group to ascertain the actual amount of contract value, which will be
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recognised as revenue or contract assets, prior to the completion or termination of a project.
Accordingly, the contract value used in calculating the Group ’s project backlog has not taken into
account factors that could potentially lead to a reduction in work scope at the customers ’ discretion.
On the other hand, for certain T elecommunications Infrastructure Services projects, the contract
value would not be specified in the relevant agreement, thus, the Group would only be able to
assess the estimated contract value when the customer placed the work order(s) with the Group. In
addition, the framework agreements or task specific agreements entered into between the Group
and its customers may also be terminated or va ried under certain circumstances in accordance
with the relevant agreements. Accordingly, any termination or modification to any one or more
Major Projects may have a substantial and immediate effect on the Group ’s backlog.
Hence, there can be no assurance that the amount estimated in the Group ’s backlog will be
realised in full, in a timely manner, or at all, or even if it is realised, such recognised backlog will
result in revenue, and no reliance should be placed on the Group ’s backlog values during the Track
Record Period as indicators of its future performance and operating results.
The Group requires various approvals, licenc es and permits to operate its business, and
the loss of or failure to obtain or renew any or all of these approvals, licences and permits
could materially and adversely affect the Group ’sb u s i n e s s
In accordance with the laws and regulations o f the PRC, the Group is required to maintain
various approvals, licences and permits in order to operate its business. Please refer to the
paragraphs headed ‘‘Business – Licenses and qualifications ’’ for a summary of the Group ’s
approvals, licences or permits and the section headed ‘‘Regulatory Overview ’’in this prospectus
for a summary of the licences the Group is required to obtain. The approvals, licences and
permits are typically valid for a limited period of time and may be renewed upon being reviewed
by the relevant government authorities or organisations. Further, the Group may also be subject
to periodic inspections, examinations and inquiries by the relevant government authorities or
organisations in respect of its approvals, licenses and permits. The Group cannot guarantee that
it will be able to maintain or renew the requisit e approvals, licences and permits or to comply
with the new requirements for maintaining those approvals, licences and permits, if new laws
and regulations are promulgated or the existing laws and regulations are amended. Failure to
comply with the relevant laws and regulations, or the loss of or failure to renew its licences and
permits or any change in the government policies may prevent the Group from undertaking
certain types of project or works, or lead to imposition of penalties on the Group and as a result,
the Group ’s business, results of operations and financial conditions may be adversely affected.
Further, as the approvals, licences and permits are granted, renewed and maintained
based upon the Group ’s satisfactory compliance with, among others, the applicable criteria set
by the relevant government authorities or organisations. Such criteria may include, but are not
limited to, the maintenance of a sufficient project track record, maintenance of a sufficient
number of qualified personnel and compliance with safety regulations and environment
protection regulations. The criteria and standards of compliance may, from time to time, be
subject to changes without substantial advance notice. Any changes or alterations in the
licensing requirements or standards of compliance may require the Group to make necessary
corresponding adjustments to meet the new requirements and/or standards, thus requiring the
Group to incur extra costs which may affect its profitability and financial results.
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The Group ’s customers or their agents may not cer tify the works completed by the Group,
or acknowledge the completion of the various stages of the projects, or make payment or
release the Group ’s retention money in a timely manner
If stipulated under the relevant contracts, th e Group would be entitled to receive progress
payments from its customers, after the customers or their agents have inspected and thereafter
confirmed that the completed works have passe d inspection and acceptance procedures, or
acknowledge the completion of the various stages of the projects, by issuing an inspection report.
The Group would then issue an interim VAT invo ice and the interim payment would become
payable by the customer. Subsequently, such por tion of the completed works would be presented
for settlement audit, and upon the completion of such process, a settlement audit report would be
issued. The Group would then be entitled to issue the final VAT invoice and the final payment
representing the balance less any retention mone y (if any) would become payable by the customer.
For further details, please refer to the paragraphs headed ‘‘Business – Operation flow ’’ in this
prospectus. There is no guarantee that the Group ’s customers or those certifying the Group ’sw o r k s
will certify the works completed by the Group, or acknowledge the completion of the various stages
of the projects at all or on a timely basis. Further, according to the Ipsos Report, the inspection and
acceptance schedule and certification timeframe ar e largely driven by the customers or their agents
and it is not uncommon in the telecommunications industry that there may be a substantial lapse of
time between the completion of the works and the issuance of invoice after the inspection and
acceptance and settlement audit procedures. Any failure or significant delay in the inspection and
certification process may have an adverse effect on the Group ’s cash flow and financial condition.
Even if the Group ’s customers or their agents certify the works completed or acknowledge the
completion of the various stages of the projects, the Group also cannot assure you that it will be
able to collect trade receivables from its customers on a timely basis, or that there will not be any
future dispute with its customers which may result in significant delay in receivables collection.
In line with industry practice, there is generally a contract term for the Group ’s customers to
secure due performance by the Group by retaining a portion of the money from the interim
payment. The retention money for the Group ’s projects is in general 3% to 10% of the final
settlement amount. The retention money may be withheld from each interim payment, or all at
once from the final payment to be settled pursuant to the final accounts. The Group ’s customers
will usually release the retention money after t he expiry of the defect liability period or after-
sales period. There can be no assurance that the Group ’s customers will not deduct any amount
from the retention mone ya sar e s u l to ft h eG r o u p ’s defects, and even if no defects are found at
the end of the defect liability period or after-sales period, there can be no assurance that the
Group ’s customers will release the retention money to the Group in a timely manner. Should the
Group ’s customers fail to release the retention mon ey to the Group in full, or at all, or in a timely
manner, the Group ’s cash flow and financial condition may also be adversely affected.
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The Group may face challenges in developing its Digitalisation Solution Services
business segment
Leveraging its in-depth knowledge in the telecommunications industry, in 2018, the Group
began providing Digitalisation Solution Services to its customers. From the provision of
Digitalisation Solution Services, the Group generated revenue of approximately RMB109.3
million, RMB70.6 million and RMB107.9 million, representing approximately 22.8% and 17.1%
and 17.7% of its total revenue, and recorded gro ss profit of approximately RMB44.9 million,
RMB60.8 million and RMB75.2 million, respecti vely, for the years ended 31 December 2021,
2022 and 2023. The Group intends to undertake additional Digitalisation Solution Services
projects and to further strengthen its capabilities in respect of its provision of Digitalisation
Solution Services through (i) pursuing strategic acquisitions of companies specialising in the
provision of digitalisation solution services in Guangdong Province and Anhui Province; (ii)
enhancing its liquidity position and financial capabilities in securing new large-scale
Digitalisation Solution Services projects; and (iii) strengthening the Group ’s research and
development capabilities. For details, p lease refer to the paragraphs headed ‘‘Business –
Business strategies ’’ and the section headed ‘‘Future Plans and Use of Proceeds ’’ in this
prospectus. There is no assurance that the Group will be able to successfully manage or grow
its Digitalisation Solution Servi ces business segment successfully as anticipated after deploying
the Group ’s management and financial resources and adopting the relevant business strategies.
Any failure in main taining the Group ’s market position or implementing its plans may materially
and adversely affect its business, financial condition and results of operations.
The Group ’s failure to anticipate and respond to changes in technologies or needs could
adversely affect its business and results of operations
The Group ’s Digitalisation Solution Services bus iness segment is subject to rapidly-
changing technological advancements in the telecommunications industry, such as the
introduction of new network and telecommunications standards, systems, software and
methodologies. For instance, 5G technology is in the process of wider commercialisation and
application, and the IoT , will connect every object, appliance, sensor, device, and application to
the Internet. Given the rapidly-changing technological landscape, the Group ’s competitiveness
therefore depends on its technical know-how regarding the latest technologies, its ability to keep
abreast of and adapt quickly to technological changes and to understand the changing needs,
preferences and requirements of its customers. While the Group ’s business strategies include
strengthening its research and development capabilities and acquiring companies specialising in
provision of services relating to Digitalisation Solution Services, there is no assurance that the
Group will be able to offer new solutions or enhancements to existing technologies that will
address the changing needs of its customers in an effective and timely manner.
The Group may also experience unanticipated delays in the development of new solutions
and enhancements. If the Group fails to develop any upgraded solutions and offer services and
solutions with advanced capabilit ies and technologies, its compet itive position, profitability and
business prospects may be adversely affected. Even if the Group is able to upgrade its existing
services and solutions through strengthening its research and development capabilities and
acquiring companies specialising in digitalisation solution services, there is no assurance that
the resulting know-how will achieve widespread market acceptance or meet the customers ’
expectations as anticipated, and failure to achieve the foregoing may also adversely affect the
Group ’s competitive position, profitability and business prospects.
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Further, the Group ’s competitors may also strengthen their research and development
capabilities and provide more advanced services o r solutions. If the competition intensifies, the
Group ’s solutions or services may lose their competitiveness and the Group may not be able to
achieve the growth as expected and its business, results of operations may be adversely
affected.
The Group ’s past performance may not be indicative of the Group ’sf u t u r ep e r f o r m a n c e
The Group operates on a project-by-project basis and its projects during the Track Record
Period were generally non-recurring and obtained by way of open tender or via single-source
procurement. Accordingly, the level of the Group ’s revenue is highly dependent upon its ability to
secure new projects. When tendering for new projects or negotiating with customers for its offer
price, the Group may from time to time adopt different strategies in order to remain competitive,
which may in turn affect the Group ’s revenue, gross profit and gross profit margins. For
example, factors such as increased market competition or deteriorating market conditions may
lead the Group to lower its offer price and margins in order to obtain the relevant project.
The Group cannot assure you that it will contin ue to be able to secure new projects at its
historical rates or that its projects will be at a comparable scale and margins. Accordingly, the
Group ’s historical growth rate, revenue and gross profit margin may not be indicative of its future
performance. During the Track Record Period, the Group ’s revenue was approximately
RMB479.1 million, RMB413.1 million and RMB609.3 million, respectively. During the
corresponding periods, its gross profit was a pproximately RMB91.2 million, RMB103.6 million
and RMB149.3 million, while its gross profit margin was approximately 19.0%, 25.1% and
24.5%, respectively.
Aside from the above, the Group ’s performance is also subject to various other factors,
including but not limited to the costs of labour, performance of its labour suppliers and other
unforeseen factors such as adverse weather, geological conditions and pandemics, which may
delay the completion of the Group ’s projects. There is also no assurance that the demand for the
services provided by the Group will not decrease in the future. An economic downturn in the
PRC or changes in government initiatives or policies may cause the Group ’s customers to
reduce their capital expenditures, and thus the level and scale of available projects, which may
materially and adversely affect the Group ’s business, financial condition and results of
operations. Investors should not solely rely on the Group ’s historical financial information as an
indication of its future financial and operating performance.
The Group ’sb u s i n e s si ss u b j e c tt os e a s o n a l i t y
The Group ’s business under its T elecommunica tions Infrastructure Services and
Digitalisation Solution Services business segments are generally subject to seasonality. During
the Track Record Period, the Group ’s major customers for its T elecommunications Infrastructure
Services included the Big Three telecommunications network operators in the PRC and the
world ’s largest telecommunications tower infrastructure service provider, who would undertake
various telecommunications infrastructure projects in support of the government ’s initiatives and
planning. Based on past experience of the Group, these customers would generally place more
work orders with the Group during the second half of the year and require that the actual works
to be completed by the end of the year. Similarl y, for the Digitalisation Solution Services
projects, the Group ’s major customers would generally approach the Group for new projects,
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particularly for large-scale projects, during the second half of the year as these customers
generally tend to invest more in capital expenditure later in the year, and require the actual
works to be completed by the end of the year. Revenue for the Infrastructure Construction
Services is recognised when the Group made efforts or input towards the satisfaction of
performance obligations, i.e., based on the work progress of the relevant work orders under the
projects, while revenue for the Digitalisation Solution Services is recognised based on the work
progress and/or when the software solution is delivered to the customers. As a result, the Group
would typically record a higher portion of revenue during the second half of the year, which
accounted for approximately 47.1%, 62.4% and 58.9% of the total revenue in respect of its
T elecommunications Infrastructure Services business segment and approximately 89.6%, 93.3%
and 64.9% of the total revenue in respect of its Digitalisation Solution Services business
segment during the years ended 31 December 2021, 2022 and 2023, respectively.
Accordingly, various aspects of the Group ’s business, including sales, working capital and
operating cashflows may be exposed to the seasonality factors, and the Group ’sh a l fy e a r
results may not be indicative of its full year results going forward.
The Group ’s pipeline for Infrastructure Construc tion Services projects may dry up in the
event of the slowdown or completion of the expansion and upgrading of the 5G network
infrastructure in the PRC
The Group ’s business operations and financial performance, particularly for the
Infrastructure Construction Services business sub-segment, are substantially premised on the
continuous growth and development of the telecommunications infrastructure construction
services industry in the PRC. During the years ended 31 December 2021, 2022 and 2023, the
Group had secured 64, 77 and 88 additional Infra structure Construction Services projects,
respectively, and the Group had 103 Infrastructure Construction Services projects on hand as at
the Latest Practicable Date. The Group ’s backlog for its Infrastruc ture Construction Services
projects as at 31 December 2021, 2022 and 2023 and the Latest Practicable Date amounted to
approximately RMB537.2 million, RMB1,014.3 m illion, RMB811.0 million and RMB762.9 million,
respectively. The Group cannot assurance you that there will be sufficient demand for the
Group ’s Infrastructure Construction Services as in the past in future, which ultimately rely on the
development and expansion progress of the tel ecommunications network infrastructure,
including the construction and upgrading of 5G network infrastructure across various provinces
and municipalities of the PRC. In the event that the expansion and upgrading of the nationwide
5G network infrastructure slow down, or approach the completion stage, or that the 5G network
technology gives way to newer technologies, such as 6G (i.e. the newer generation of wireless
network technology), it may inevitably reduce the demand for telecommunications infrastructure
construction services in relation to 5G technology, and the number of Infrastructure Construction
Services projects to be secured by the Group in its project pipeline may gradually dry up. If the
Group is unable to diversity its business focuses, or to capture the new market demand for the
construction and upgrading of telecommunications infrastructure in relation to newer generation
of wireless network technology by timely responding to the industry trends and market needs, its
results of operations, prospects and financial condition may be materially and adversely
affected.
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The government grants received by t he Group were non-recurring in nature
The Group received government grants from the government authorities of Jiangxi Province
which amounted to approximate ly RMB3.3 million, RMB0.9 milli on and RMB3.2 million for the
years ended 31 December 2021, 2022 and 2023, accounting for approximately 55.6%, 18.3%
and 64.7% of the Group ’s other net income during the respective year. These government grants
were all non-recurring in nature. Whether or not the Group will receive the same amount of
government grants, if at all, in future largely depends on (i) the Group ’s eligibility for the
government grant through an internal verification process conducted by the government
authorities; and (ii) the government policies at t hat time which may aim at granting subsidies to
companies in specific industries. The granting of the government grants is therefore determined
by the relevant government authorities at their discretion based on the Group ’s application.
Given the non-recurring nature of the government grants, there is no assurance that the
Group will continue to receive the same amount of government grants as in the past in future. In
the event that there is a modification of the sel ection criteria for receiving the grants, or a
change in the government policies, the amount of government grants the Group will receive may
decrease, if at all. Any loss or reduction in government grants could adversely affect the Group ’s
financial result and financial position.
Increase in wages and shortage of labour may affect the Group ’s ability to implement its
projects and its performance
Generally, the provision of T elecommunications Infrastructure Services is labour intensive
and for any given project a large number of workers with different skills and in particular
qualified technical personnel may be required. Accordingly, the Group ’s business is dependent
upon the continued supply of labour and is susceptible to labour shortage. If there is a
significant increase in the costs of labour, the Group ’s profitability may be ma terially affected.
According to the Ipsos Report, the average annual wage of workers in the telecommunications
infrastructure services industry in the PRC gr ew from RMB65,063.9 in 2019 to RMB81,478.3 in
2023 at a CAGR of approximately 5.8%, which is expected to further increase from
RMB85,767.7 in 2024 to RMB108,577.5 in 2028 at a CAGR of approximately 6.1% due to the
continuous demand for skilled and experienced wor kers for construction o f telecommunications
infrastructure. On the other hand, if the Group or its labour suppliers fail to retain the existing
labour and/or recruit sufficient labour in a timely manner to cope with the Group ’s existing or
future projects, the Group may not be able to timely complete its projects, and this may result in
liquidated damages and/or financial loss. There is no assurance that the supply of labour,
especially experienced and skilled labour, will be sufficient going forward.
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The Group ’s success significantly depends on the key management of the Group and its
ability to attract and retain technical and mana gement staff, in particular, for the Group ’s
licences and/or registrations maintained w ith the relevant government authorities
The Group ’s success and growth is, to a significant ex tent, attributable to the expertise and
experience of the Group ’s management team, in particular Mr. Liu Haoqiong, a co-founder of the
Group and also an executive Director and the chairman of the Board, who has more than 20
years of experience in the telecommunications infrastructure services industry. The remainder of
the Group ’s management team comprises its executive Directors, including Mr. Peng Shengqian,
Ms. Xie Xiaolan, Mr. Liu Dingli, Mr. Liu Dingyi, Mr. Zhou Zhiqiang, Mr. T seung Yat Ming, and its
senior management, Mr. T seung Yat Ming, each of whom is well experienced and possesses
diverse expertise and skills that cover areas such as management, finance, business
development and sales and marketing. Please refer to the section headed ‘‘Directors and Senior
Management ’’in this prospectus for further information of the Group ’s management team. If any
of the executive Directors or members of the senior management cease to be involved in the
management of the Group and the Group is unable to find suitable replacements in a timely
manner, it may materially and adversely impact upon the business, financial condition, results of
operations and profitability of the Group.
In addition, the Group is required to obtain certain licences and registrations for its
business operations, and to maintain such licen ces and registrations, the Group must comply
with the relevant requirements in regards to the number of and the qualifications and
experiences of technical personnel as set out in the relevant ordinances. For further details,
please refer to the section headed ‘‘Regulatory Overview ’’ in this prospectus. Departure or
disqualification of these technical personnel may result in suspension of the Group ’s
registrations if no replacement is identified and applied for. In the event that the technical
personnel depart the Group and the Group is unable to fulfill the requirements of the relevant
laws and regulations in a timely manner, its ability to obtain new projects may be impaired,
thereby adversely affecting its business operations and financial performance.
Failure to maintain safe construction sites and/or implement safety management
measures may lead to property damage, personal injuries or fatal accidents. The Group ’s
financial performance and business prosp ect may be adversely affected by such injury
claims and litigations
Although the Group has established an occupational health and safety related internal
controls in order to provide a safe and healthy working environment to its employees and the
employees of its labour suppliers and to comply with the relevant laws and regulations, the
Group cannot assure you that its employees and the employees of its labour suppliers will
strictly implement all of the Group ’s safety management measures and procedures during the
execution of the Group ’s projects, or that its measures are effective at all. In the event that the
Group fails to maintain safe work sites and/or imp lement safety manageme nt measures resulting
in the occurrence of serious personal injuries or fatal accidents, the reputation of the Group may
be adversely affected, and may result in the suspension or non-renewal of the Group ’s relevant
licences. The Group may also be prosecuted by the relevant government authorities and subject
to extensive fines and penalties.
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The Group ’s employees who suffer from bodily injuries or death as a result of accidents
occurred and diseases contracted during the course of their employment may also claim against
the Group for damages and/or compensation under the Administrative Regulations on Work
Injury Insurance （《工傷保險條例》）. During the Track Record Period and up to the Latest
Practicable Date, there was one fatal accident involving an employee of the Group. For details,
please refer to the paragraphs headed ‘‘Business – Employees – Work safety ’’ in this
prospectus. Further, the Group may also face claims from third parties, who suffer personal
injuries at premises where the Group provides its services, which may or may not be
meritorious. Regardless of the merits of such claims, the Group may need to divert management
resources and incur costs to handle these claims, which may affect its corporate image and
reputation especially if they become public, and may adversely affect its revenue, results of
operations and financial conditions. Additionally, the outcome of any claim is subject to the
relevant parties ’ negotiation or the decision of the court or the relevant arbitration authorities,
and the results may be unfavourable to the Group. In such case, the Group may be required to
pay damages, compensations or fines and the Group ’s financial conditions may be adversely
affected.
Legal and arbitration proceedin gs may arise and affect the Group ’s business, operations
and financial results
The Group may be subject to claims in respect of various matters from its customers,
suppliers, workers and other parties concerned with the Group ’s projects from time to time. Such
claims may include claims for compensation for late completion of works and delivery of
substandard works or, claims in respect of personal injuries and labour compensation in relation
to the works, for which the Group may have to incur costs to defend itself in legal and arbitration
proceedings. If the Group is not successful in defending itself in any proceedings, it may be
liable to pay damages. Such payments may be significant, and if fall outside the scope and/or
limit of the Group ’s insurance coverage or monies retained from its labour suppliers, the Group ’s
business operations and financial position may be adversely affected.
Legal proceedings can be time-consuming, expensive, and may divert the Group ’s
management ’s attention away from the operation of the Group ’s business. Any claims or legal
proceedings to which the Group may become a party in the future may have a material and
adverse impact on the Group ’s business. The Group also need to divert resources and incur
extra costs to handle the aforementioned outstanding and potential claims, which could affect
the Group ’s corporate image and reputation in the telecommunications industry if they were
published by the press. If the aforementioned claims were successfully made against the Group,
it would result in legal costs and damages to be paid to the claimants, which in turn could
materially and adversely affect the Group ’s revenue, results of operations and financial position.
RISK FACTORS
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The Group is exposed to claims arising from latent defects that may be caused by itself or
its suppliers in the past, the discovery of wh ich may have material negative impact on the
Group ’s reputation, business and results of operations
The Group may face claims arising from latent defects that might be existing but not yet
discovered or developed. Such possible latent defects may be caused by the Group itself or its
suppliers in the past. If there are claims against the Group for such latent defects when they are
discovered, the Group may be held primarily liable even if the defects are caused by its
suppliers without the Group ’s fault. Further, due to the passage of time, the Group may be
unable to locate the relevant suppliers to hold them accountable, or to procure them to rectify
the defect (if it is rectifiable at all), or obtain compensation for any loss or damages caused by
such defects. Latent defects may include use of materials not meeting the specifications as
stipulated in the relevant contracts, which may not be discovered despite the inspection and
acceptance by the customers of the works prior to completion, and remain undiscovered for
years after the completion of the relevant project.
In the event that there are any significant claims against the Group by its customers or
other party for any latent defects, the Group ’s results of operations and financial position may be
materially and adversely affected. Even if such latent defects do not involve any non-compliance
with laws or regulations, or breach of any contractual obligations on the Group ’sp a r t ,i tm a yb e
required to rectify such defects or take preventive or remedial measures, such as conducting
reviews, tests or examinations on the works in the past, because of the negative publicity or to
prevent the reputation of the Group from being negatively affected. As a result, the Group ’s
operation, business and results of operations may be materially and adversely affected.
The Group ’s insurance coverage may not be sufficient to cover all losses or potential
claims which would affect the Group ’s business, financial condition and results of
operations
During the Track Record Period, the Group had purchased and maintained insurance
covering its property, motor vehicle and workers compensation. For details, please refer to the
paragraphs headed ‘‘Business – Insurance ’’ in this prospectus. It cannot be guaranteed that the
insurance policies taken out by the Group are suff icient to cover all potential risks and losses.
Certain types of risks, such as the risks in relati on to business interruption or litigation, the
collectability of the Group ’s trade and other receivables, and l iabilities arising from events such
as epidemics, natural disasters, adverse weather conditions, political unrest and terrorist
attacks, are generally not covered by insurance because they are either uninsurable or it is not
cost justifiable to insure against such risks. A s a result, the Group may have to pay out of its
own resources for any uninsured financial or other losses, damages and liabilities, litigation or
business disruption. If the Group ’s business operations are disrupted or interrupted for a
substantial period of time, it could incur costs and losses that may materially and adversely
affect its business, financial conditions and results of operations.
RISK FACTORS
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Any failure to maintain an effe ctive quality control system could have a material adverse
effect on the Group ’s business and operations
With its operating history tracing to 2002, the Group believes that the reputation and brand
name that it has built play a significant role in enabling itself to attract customers and secure
projects. The promotion and enhancement of the Group ’s reputation and brand name depend
largely on its ability to provide reliable, quality a nd timely services to its customers. If the Group
fails to do so, or its customers no longer perceive the Group ’ss e r v i c e st ob eo fh i g hq u a l i t y ,t h e
Group ’s brand name and reputation will be adversely affected, which will in turn materially and
adversely affect the Group ’s business, financial conditions and results of operations.
T o uphold its ability in delivering quality servi ces, the Group needs to continue to maintain
an effective quality control system for project implementation, which will involve timely update of
the system and provision of training to its employees in accordance to changing business
needs. Any failure or deterioration of the Group ’s quality control system could result in defects in
its works, which in turn may jeopardise its reputation, reduce demand for its services, or even
subject it to contractual liabilities and other claims. Any such claims, regardless of whether they
are ultimately valid, could cause the Group to incur significant costs, harm its reputation and/or
result in significant disruption to its operations. Furthermore, if any of such claims ultimately
prove to be valid, the Group could be required to pay substantial monetary damages or
penalties, which could have a material adverse impact on its business, financial conditions and
results of operations.
Breaches, hacking, failures, or disruptions of the information technology system of the
Group could interrupt its business operati o n sa n dh a r mi t sb u s i n e s sa n dr e s u l t so f
operations
The Group relies on its information technology systems to operate and manage its
business and to process, maintain, and safeguard information, including information belonging
to the Group, its customers and employees. The computer systems may fail of their own accord,
and are subject to interruption or damage from power outages, human error or abuse, new
system installations, computer viruses, security brea ches (including through cyber-attack and
data theft), catastrophic events such as natural disasters and other events beyond the Group ’s
control (such as acts of war or terrorism). Moreover, hacking and data theft techniques are
continuously evolving, and the anti-virus systems and security measures adopted by the Group
may not be able to adjust to these changes in a timely manner. Although the Group is
continuously working to maintain secure and reliable systems, there is no assurance that the
Group ’s efforts will be effective and adequate. If the Group ’s information technology systems are
compromised, degraded, damaged, or breached, or otherwise cease to function properly, the
Group could suffer interruptions in operations or unintentionally allow misappropriation of
proprietary or confidential information, which could damage its reputation and result in
significant expenses and legal claims. Similarly, information technology system breaches, or
failures of the systems of the Group ’s customers and suppliers may also result in similar
consequences. Any of these events could materially and adversely affect the Group ’s reputation,
business and results of operations.
RISK FACTORS
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RISKS RELATING TO THE INDUSTRY IN WHICH THE GROUP OPERATES
The Group ’s performance depends on prevailing m arket conditions and trends in the
Telecommunications Infrastructure Services in dustry, and Digitalisation Solution Services
industry and in the overall state of economy in the PRC
All of the Group ’s operations are based in, and all of the Group ’s revenue was derived from
the PRC during the Track Record Period, and the Directors expect the Group ’s business will
continue to be based in the PRC . Accordingly, the Group ’s future performance depends on the
prevailing market conditions and trends in the telecommunications industry in the PRC. The
future growth and level of profitability is likely t o depend primarily upon the c ontinued availability
of large scale projects, which will be determin ed by the interplay of various factors. These
factors include, in particular, the PRC government ’s policies and initiatives, the spending
budgets and patterns of the Group ’s customers, and the general conditions and prospects of the
PRC economy. If the government authorities adopt regulations that place additional restrictions
or burdens on the telecommunications industry, the Group ’s customers may be more
conservative in their spending budgets, and the demand for T elecommunications Infrastructure
Services and Digitalisation Solution Services in the PRC may deteriorate, which in turn
materially and adversely affect the Group ’s operations and profitability. In addition, the Group ’s
performance and financial condition also depend on the state of the economy in the PRC. If
there is a downturn in the e conomy of the PRC, the Group ’s results of operations and financial
position may be adversely affected. In addition to economic factors, social unrest or civil
movements may also affect the state of the economy in the PRC, and in such cases, the
Group ’s operations and financial position may also be adversely affected.
An occurrence of a natural disas ter, widespread health epidemic or other outbreaks, such
as COVID-19, could have a material adverse effect on the Group ’s business, financial
condition and results of operations
The Group ’s business could be materially and adversely affected by natural disasters or the
outbreak of a widespread health epidemic, such as swine flu, avian influenza, severe acute
respiratory syndrome (SARS) or COVID-19. The occurrence of a natural disaster or a prolonged
outbreak of an epidemic illness, or other adver se public health developments in the PRC could
materially disrupt the Group ’s business and operations. In particular, the outbreak of COVID-19
which was first reported in late 2019 and spread within the PRC and globally, has caused
significant disruption in the economic activities. As the Group ’s operations, customers and
suppliers are located in the PRC, the outbreak of COVID-19 in the PRC may affect the
telecommunications industry, and cause temporary suspension of projects and shortage of
labour, materials and equipment and other services, which would severely disrupt the Group ’s
operations and have a material adverse effect on the Group ’s business, financial condition and
results of operations. The Group ’s operations could also be disrupted if any of its employees or
employees of the Group ’s labour suppliers were suspected of contacting, or contacted an
epidemic disease, since this could require the Group and its labour suppliers to quarantine
some, or all of these employees, and disinfect the works sites and facilities used for the Group ’s
operations. In addition, the Group ’s revenue and profitability could also be reduced to the extent
if any natural disaster, health epidemic or other virus outbreak harms the overall economy in the
PRC. These adverse impacts, if materialise and persist for a substantial period, may
significantly and adversely affect the Group ’s business operation and financial performance.
RISK FACTORS
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Competition in the Telecommunications Infrastr ucture Services indust ry and Digitalisation
Solution Services industry may put downw ard pricing pressures on the Group which
could materially and adversely affecting the Group ’s profitability
The Group holds various licences that enable it to tender for, and carry out different types
of projects, and it competes directly with other service providers actively operating in the PRC
that possess the same licences and offer similar services as the Group. Some of the Group ’s
competitors may have stronger brand names, bigger capital base, longer operating histories,
longer and more established relationship with their customers, and better marketing and other
resources. Furthermore, due to the open nature of the markets in which the Group operates, any
new participants may enter th e industry if they attain the required technical skills and
experience, and are granted the requisite licences by the relevant regulatory bodies, and
thereby intensifies the competition. These competitors may be able to reduce the Group ’s
market share by adopting more aggressive pricing policies than the Group, or by providing
services that can gain wider market acceptance than what the Group can offer. Existing and
potential competitors may also develop relationships with the Group ’s customers, and
competition from these competitors could significantly harm the Group ’s ability to secure
projects. Thus, if the Group fails to compet e effectively, or maintain or improve its
competitiveness in the market, its business, financial condition and results of operations will be
adversely affected.
RISKS RELATING TO THE PRC
The Group may be adversely affected by changes in political, social and economic
policies, as well as govern mental policies, in the PRC
During the Track Record Period, all of the Group ’s revenue was derived from the provision
of services to the Group ’s customers in the PRC, and substantially all of the Group ’s assets and
business operations are also currently located in the PRC. Accordingly, the Group ’s business,
financial condition and results of operations are subject to political, economic and legal
developments in the PRC to a significant degree. The PRC ’s economy differs from the
economies of most developed countries in many aspects, including the extent of government
involvement, growth rate, control of foreign exchange, allocation of resources and capital
investment. Any significant changes in the PRC ’s political, economic and governmental policies
and measures could have a material adverse effect on the PRC ’s overall economic growth, and
the Group cannot assure you that such changes will not occur. Where such changes have a
material adverse effect on the PRC ’s overall economic growth, it may impact the industry in
which the Group operates, which in turn may diminish the demand for its services.
RISK FACTORS
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The Group may be deemed a PRC resident enter prise under the EIT Law and be subject to
PRC taxation on the Group ’sw o r l d w i d ei n c o m e
The Company is a holding company incorporated under the laws of the Cayman Islands,
and under the EIT Law and its implementation rules, if an enterprise incorporated outside the
PRC has its ‘‘de facto management bodies ’’ located within the PRC, such enterprise may be
recognised as a PRC tax resident enterprise, and be subject to the unified income tax at a rate
of 25% on its worldwide income. The implementation rules to the EIT Law define the term ‘‘de
facto management body ’’as a body that has a material and overall management control over the
business, personnel, accounts and properties of the enterprise. In April 2009, SAT issued the
Circular on Issues Concerning the Identification of Chinese – Controlled Overseas Registered
Enterprises as Resident Enterprises in Accordance with the Actual Standards of Organisational
Management, which was partially revised by SAT in December 2017, setting out certain criteria
for specifying what constitutes a ‘‘de facto management body ’’ in respect of enterprises that are
established offshore by PRC enterprises. However, no such criteria are provided in these, or
other publications of SAT in respect of enterprises established offshore by private individuals or
foreign enterprises like the Group, it is therefore unclear whether the Group will be deemed to
be a ‘‘PRC tax resident enterprise ’’for the purposes of the EIT Law even though substantially all
of the Group ’s operations and management are currently based in the PRC. The Group is
currently not treated as a PRC tax resident ent erprise by the relevant tax authorities,
nevertheless, there can be no assurance that the Group will not be treated as a PRC tax
resident enterprise under the EIT Law in the future, and be subject to the unified income tax. In
the event that the Group is subject to the unified income tax, its income tax expenses may
increase significantly and have a material adverse effect on its net profit and profit margins.
If the Group ’s preferential tax treatments become unavailable or if the calculation of the
Group ’s tax liability is successfully challenged by the PRC tax authorities, its results of
operations would be materially and adversely affected
During the Track Record Period, the Group enjoyed a number of preferential tax
treatments. Zhonggan Communication qualified as a High and New T echnology Enterprise in
2015, and the qualification was subsequently renewed in 2018 and 2021, and the valid period
was extended to 2024. GLP T echnology qualified as a High and New T echnology Enterprise in
2020, and the qualification was subsequently renewed in 2023, and the valid period was
extended to 2026. Furthermore, GLP Software qualified as a ‘‘Double-soft Enterprise ’’ in 2023,
which is valid for five years until 2028. As advised by the PRC Legal Advisers, pursuant to the
PRC EIT Laws, as a High and New T echnology Enterprise, each of Zhonggan Communication
and GLP T echnology enjoys a preferential corporate income tax treatment at a reduced rate of
15%, and as a Double-soft Enterprise, GLP Software enjoys full exemption from and 50%
reduction of statutory corporate income tax for the first two years and the subsequent three
years respectively. For further details on the tax regime the Group was subject to, please refer
to the paragraphs headed ‘‘Regulatory Overview – Regulations relating to tax ’’ in this
prospectus. It is the relevant PRC government authorities ’ discretion to decide when, under
what conditions, or whether the preferential tax treatment should be granted to the Group. There
is no assurance that the laws or regulations, or governmental policies in relation to the Group ’s
preferential tax treatments will not change, or that its current eligibility to enjoy preferential tax
treatment will not be cancelled. If there is any reduction, suspension, discontinuation or
RISK FACTORS
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cancellation of the Group ’s preferential tax treatments, which may adversely affect the
recoverability of the Group ’s tax recoverable, its business, financial condition and profitability
would be materially and adversely affected.
The Company is a holding company and the Group ’s ability to pay dividends is primarily
dependent upon the earnings of, and distributions by, the Company ’s subsidiaries in the
PRC
The Company is a holding company incorporated under the laws of the Cayman Islands
with limited liability. The majority of the Group ’s business operations are conducted through the
Company ’s subsidiaries in the PRC and hence, the Group ’s turnover and profit are derived from
these subsidiaries, as such the Group ’s ability to pay dividends to the Shareholders is primarily
dependent upon the earnings of the Company ’s subsidiaries in the PRC and their distribution of
funds to the Group, primarily in the form of dividends. The ability of the Company ’s subsidiaries
in the PRC to make distributions to the Group depends upon, amongst others, their distributable
earnings. Under the PRC law, payment of dividends is only permitted out of accumulated profits
according to PRC accounting standards and regulations, and the Company ’s subsidiaries in the
PRC are also required to set aside part of their after-tax profits to fund certain reserve funds that
are not distributable as cash dividends. Other possible factors such as financial condition,
restrictions on distributions contained in the Company ’s PRC subsidiaries ’ articles of
associations, restrictions contained in debt instruments, withholding tax and other arrangements
will also affect the ability of the Company ’s subsidiaries in the PRC to make distributions to the
Group. These restrictions could reduce the amount of distributions that the Group receives from
the Company ’s subsidiaries in the PRC, which in turn would restrict its ability to pay dividends
on the Shares. The amounts of distributions that any of the subsidiaries of the Company has
declared and made in the past are not indicative of the dividends that the Group may pay in the
future. There is no assurance that the Group will be able to declare or distribute any dividends
in the future.
Dividends payable by the Group to its foreign investors and gains on the sale of the
Shares may be subject to withholding taxes under the PRC tax laws
Under the EIT Law and its implementation rules, enterprise income tax at the rate of 10.0%
is applicable to dividends payable to investors that are ‘‘non-resident enterprises ’’ (being
investors which have not set up institutions or premises in the PRC, or where the institutions or
premises are set up but its subsidiary ’s after tax income has no actual relationship with such
institutions of premises) to the extent such dividends are sourced within the PRC. Similarly, any
gain realised on the transfer of the shares of a PRC enterprise by such investors is also subject
to 10.0% PRC enterprise income tax if such gain is regarded as income derived from sources
within the PRC. If the Group is considered as a PRC ‘‘resident enterprise ’’, it is unclear whether
the dividends the Group pays with respect to the Shares, or the gain you may realise from the
transfer of the Shares, would be treated as income derived from sources within the PRC and be
subject to PRC tax. If the Group is required under the EIT Law to withhold PRC enterprise
income tax on the Group ’s dividends payable to its foreign Shareholders, or if you are required
to pay PRC enterprise income ta x on the transfer of the Shares, the value of your investment or
return on your investment in the Shares may be materially adversely affected.
RISK FACTORS
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Government control on currency conversion and changes in the exchange rate between
RMB and other currencies could negatively affect the Group ’s financial condition, results
of operations and its ability to pay dividends
RMB is not currently a freely convertible currency and the Group needs to convert RMB
into foreign currencies for the payment of dividends, if any, to Shareholders, which is subject to
the PRC rules and regulations on currency conversion. In the PRC, SAFE regulates the
conversion of RMB into foreign currencies. Foreign invested enterprises are required to apply to
SAFE or its local branches for Foreign Exchange Registration Certificates. Under the relevant
PRC foreign exchange laws and regulations, p ayment of regular items, including profit
distributions and interest payments, are permitted to be made in foreign currencies without prior
government approval, but are subject to certa in procedural requirements. Strict foreign
exchange control continues to apply to capital account transactions, which must be approved by
and/or registered with SAFE. The Group cannot assure you that the PRC regulatory authorities
will not impose further restrictions on foreign exchange transactions for regular items, including
payment of dividends.
Furthermore, in 2005, the PRC revalued the exchange rate of the RMB to the USD and
abolished the pegging of the RMB solely to the USD as applied in the past. Instead, it is pegged
against a basket of currencies. The Group cannot assure you that in the future the PRC will not
revalue RMB or permit its substantial appreciation. Any increase in the value of RMB may
adversely affect the growth of the PRC economy and competitiveness of various industries in
the PRC, including the industry in which the Gr oup operates, which could in turn affect the
financial condition and results of operations of the Group. Fluctuations in exchange rates for
USD may also adversely affect the value, translated or converted into RMB, of the Group ’sn e t
assets, earnings and any declared dividends. The Group may incur new debt financings which
may include foreign currency denominated borrowings. Any adverse fluctuations in exchange
rates among these foreign currencies may materially and adversely affect the Group ’s results of
operations.
PRC regulations on direct investments and loans by offshore holding companies to PRC
entities may delay or limit the Group from makin g additional capital contributions or loans
to the Company ’s major PRC subsidiaries
In utilising the proceeds of the Global Offering in the manner described in the section
headed ‘‘Future Plans and Use of Proceeds ’’ in this prospectus, the Company, as the offshore
holding company of the Company ’s operating subsidiaries in the PRC, may make loans and
additional capital contributions to the Company ’s PRC subsidiaries or a combination thereof. Any
loans to the Company ’s PRC subsidiaries are subject to PRC regulations and approvals. For
example, loans by the Company to its subsidiaries in the PRC, which are foreign-invested
enterprises, to finance their activities cannot exceed statutory limits, and must be registered with
SAFE or its local counterpart. In addition, any capital contributions to the Company ’sP R C
subsidiaries must be approved by MOFCOM or its local counterpart. The Group cannot assure
that the Group will be able to obtain these government registrations or approvals on a timely
basis, if at all, with respect to future loans or capital contributions by the Group to the
Company ’s PRC subsidiaries. If the Group fails to obtain such registrations or approvals, its
ability to use the proceeds of the Global Offering may be negatively affected, which could
materially and adversely affect its liquidity and its ability to fund and expand its business.
RISK FACTORS
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You may experience difficulties in effecting service of legal process and enforcing
judgments against the Group and its officers
The Company was incorporated under the laws of the Cayman Islands and a substantial
part of the Group ’s businesses, assets and operations are located in the PRC. In addition, most
of the Directors and officers are residents of the PRC. As a result, it may not be possible to
effect service of legal process upon the Group, or the Directors and the Group ’so f f i c e r si nt h e
PRC. Moreover, a judgment of a court of another j urisdiction may be reciprocally recognised or
enforced if the jurisdiction has a treaty with the PRC, or if judgements of the PRC courts have
been recognised before in that jurisdiction (subject to the satisfaction of other requirements).
The PRC does not have treaties providing for the reciprocal recognition and enforcement of
judgments of courts of the United States, the United Kingdom, Japan and most other western
countries. Therefore, it may be difficult for you to enforce against the Group, or the Directors
and the Group ’s officers in the PRC any judgments obtained from non-PRC courts.
Under the current arrangement for reciprocal enforcement of arbitral awards between the
PRC and Hong Kong, awards made by the PRC arbitral authorities that are recognised under
the Arbitration Ordinance can be enforced in Hong Kong. Hong Kong arbitration awards are also
enforceable in the PRC. On 14 July 2006, the Supreme People ’s Court of the PRC and the
government of Hong Kong signed the Arrangement on Reciprocal Recognition and Enforcement
of Judgements in Civil and Commercial Matters (the ‘‘2006 Arrangement ’’). Under the 2006
Arrangement, where any designated People ’s Court of the PRC or Hong Kong court has made
an enforceable final judgment requiring payment of money in a civil and commercial case
pursuant to a choice of court agreement, any party concerned may apply to the relevant
People ’s Court of the PRC or Hong Kong court for recognition and enforcement of the judgment.
Although the 2006 Arrangement became effective on 1 August 2008, the outcome and
effectiveness of any application brought under the 2006 Arrangement remains uncertain.
In January 2019, the Supreme People ’s Court of the PRC and the government of Hong
Kong signed 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 (the ‘‘2019 Arrangement ’’). The 2019 Arrangement stipulates, among
others, the scope and particulars of judgements, the procedures and ways of application for
recognition or enforcement, the review of the jurisdiction of the court that issues the original
judgement, the circumstances where the recognition and enforcement of a judgement shall be
refused, and the approaches towards remedies. The 2019 Arrangement shall apply to any
judgement made on or after its effective date by the courts of both sides. The 2006 Arrangement
shall be terminated on the same day when the 2019 Arrangement comes into effect. If a ‘‘written
choice of court agreement ’’has been signed by parties according to the 2006 Arrangement prior
to the effective date of the 2019 Arrangement, the 2006 Arrangement shall still apply. Although
the 2019 Arrangement has been signed, its effective date has yet to be announced. Therefore,
there are still uncertainties about the outcome and effectiveness of enforcement or recognition
of judgements under the 2019 Arrangement.
RISK FACTORS
– 61 –


--- page 71 ---
In addition, Hong Kong has not entered into multilateral conventions or bilateral treaties
regarding recognition and enforcement of judgments made by courts of any other jurisdictions.
Hong Kong courts are also subject to certain limiting concerns when being used as an avenue
for aggrieved investors, including enforcement of a Hong Kong judgment against the overseas
assets, operations and/or directors, and enforcement of an overseas judgment in Hong Kong
courts. As a result, it may be difficult or impossible for investors to effect service of process,
enforce foreign judgments, or bring original actions against the Group ’s assets, or the Directors
in China or Hong Kong in order to seek recognition and enforcement of foreign judgments in
China.
Although the Group will be subject to the Listing Rules and the T akeovers Code upon
Listing, the Shareholders will not be able to bring actions on the basis of violation of the Listing
Rules or the T akeovers Code, which do not have the force of law in Hong Kong, and must rely
on the Stock Exchange and SFC to enforce their rules.
There are uncertainties regarding the interpretation and enforcement of PRC laws and
regulations
The Company ’s operating subsidiaries are principally based in the PRC and are subject to
the laws and regulations of the PRC. The PRC legal system is based on statutory laws. Under
this system, prior court decisions may be cited for reference but do not have binding
precedential effect. Since 1979, the PRC government has been developing a comprehensive
legal system and considerable progress has been made in the promulgation of laws and
regulations dealing with economic matters, such as corporate organisation and governance,
property title, foreign investme nt, commerce, taxation and trade. As these laws and regulations
are relatively new and evolving, and because of the limited volume of published cases and
judicial interpretations, and the non-binding nature of prior court decisions, the interpretation and
enforcement of these laws and regulations involves some uncertainties. Such uncertainties may
lead to difficulties in enforcing the Group ’s rights and in resolving disputes with any persons, and
could result in unanticipated costs and liabilities.
RISKS RELATING TO THE GLOBAL OFFERING AND THE SHARES
There may be limited liquidity in the Shares and volatility in the price of the Shares on the
Stock Exchange, which could result in subst antial loss for investors purchasing the
Shares under the Global Offering
The Shares have not been traded in an open market prior to the completion of the Global
Offering and the Offer Price may not serve as an indicator of the price of the Shares as traded
on the Stock Exchange in the future.
The Offer Price is the result of negotiations between the Group, the Sole Overall
Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwriters), and
may be different from the market prices for the Shares after the Listing. The Group has applied
for the listing of and permission to deal in the Shares on the Stock Exchange. However, there is
no assurance that an active and liquid public trading market of the Shares will develop upon the
Listing, or if it does develop, that it may be sustained for any period of time after the Listing. The
market price and trading volume of the Shares may fluctuate significantly and rapidly as a result
of the following factors, among other things, some of which are beyond the Group ’s control:
RISK FACTORS
– 62 –


--- page 72 ---
 v a r i a t i o ni nt h eG r o u p’s results of operations;
 the Group ’s inability to compete effectively in the market;
 changes in securities analysts ’ analysis of the Group ’s financial performance;
 the Group ’s announcement of significant acquisitions, dispositions, strategic alliances
or joint ventures;
 addition or departure of the Group ’s key personnel;
 fluctuations in market prices and trading volume of the Shares;
 the Group ’s involvement in litigation;
 penalties from the relevant authorities in respect of any possible non-compliance in
the Group ’s operations; and
 general economic and stock market conditions in Hong Kong.
All such factors may result in significant fluctuations in the market price and/or transaction
volume of the Shares. There is no assurance that such changes will not occur.
Purchasers of the Shares will experience immediate dilution and may experience further
dilution if the Group issue additional Shares in the future
The Offer Price of the Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering and the Capitalisation Issue. Therefore, purchasers of
the Shares in the Global Offering will experience an immediate dilution. In order to expand its
business, the Group may consider offering and issuing additional Shares to new and/or existing
Shareholders in the future after the Listing. Purchasers of the Shares may experience further
dilution in their holdings in the future.
Sale or perceived sale of substantial amounts of the Shares in the public market after the
Global Offering could materia lly and adversely affect the p revailing market price of the
Shares
The Shares beneficially owned by the Controllin g Shareholders are subj ect to certain lock-
up periods under the Listing Rules and further undertakings in favour of the Group, however,
there is no assurance that the Co ntrolling Shareholders (whose i nterests may differ from those
of other Shareholders) will not dispose of their Shares following the expiration of the lock-up
periods. Sale of substantial amounts of the Shares in the public market, or the perception that
such sale may occur, could adversely affect the prevailing market price of the Shares.
RISK FACTORS
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--- page 73 ---
Upon completion of the Global Offering and th e Capitalisation Issue (assuming that the
Over-allotment Option is not exercised, and without taking into account of any shares which may
be granted upon the exercise of any options which may be granted under the Share Option
Scheme), the Controlling Shareholders will own 56.16% of the Shares in issue (without taking
into account of the Shares which may be issued upon the exercise of the Over-allotment Option,
and issued upon the exercise of options under the Share Option Scheme) and will therefore
have significant influence over the operations and business strategies of the Group. Accordingly,
the Controlling Shareholders will have the ability t o require the Group to effect corporate actions
according to their own desires. The interests o f the Controlling Shareho lders may not always
coincide with the best interests of other Shareholders. If the interests of any of the Controlling
Shareholders conflict with the interests of other Shareholders, or if any of the Controlling
Shareholders choose to cause the Group ’s business to pursue strategic objectives that conflict
with the interests of other Shareholders, the Company or those other Shareholders may be
materially and adversely affected as a result.
The Group may require additional funding for future growth. Issue of new Shares under
the Share Option Scheme or any future equity fund raising exercise will have a dilution
effect and may affect the Group ’s profitability
The Group may be presented with opportunities to expand the Group ’s business through
acquisitions in the future. Under such circumstances, secondary issue(s) of securities after the
Listing may be necessary to raise the required capital to capture these growth opportunities. If
additional funds are raised by means of issuing new equity securities in the future to new and/or
existing Shareholders after the Listing, such new Shares may be priced at a discount to the then
prevailing market price. Inevitably, if existing Shareholders are not offered an opportunity to
participate, their shareholding interests in the Company will be diluted. Also, if the Group fails to
utilise the additional funds to generate expecte d earnings, this could adversely affect the
Group ’s financial results and in turn exert pressure on the market price of the Shares. Even if
additional funds are raised by means of debt financing, any additional debt financing may, apart
from increasing interest expense and gearing, contain restrictive covenants with respect to
dividends, future fund raising exercises and other financial and operational matters.
Further, the Group has conditionally adopted the Share Option Scheme but no option has
been, or will be granted thereunder prior to the Listing Date. Any exercise of the options to be
granted under the Share Option Scheme in the fut ure will result in a dilution in the shareholding
of the Shareholders in the Company, and may result in a dilution in the earnings per Share and
net asset value per Share. The fair value of the share options at the date on which they are
granted with reference to the valuer ’s valuation will be charged as share-based expense, which
may adversely affect the Group ’s results of operations.
RISK FACTORS
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RISKS RELATING TO STATEMENTS MADE IN THIS PROSPECTUS AND FROM OTHER
SOURCES
Certain statistics and facts in this pro spectus are derived fr om various official
government sources and publications or ot her sources and have not been independently
verified
This prospectus includes certain statistics and facts that are derived from various official
government sources, public market research, the Ipsos Report and other independent third-party
sources. The statistics and facts from official government sources have not been independently
verified by the Company, the Directors, the Sole Sponsor, the Sole Overall Coordinator, the Sole
Global Coordinator, the Underwriters, or any of thei r respective directors, affiliates or advisers or
any other party involved in the Global Offering, and no representation is given as to its accuracy.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties
This prospectus contains certain statements and information that are ‘‘forward-looking ’’and
uses forward-looking terminologies such as ‘‘anticipate ’’, ‘‘believe ’’, ‘‘could ’’, ‘‘expect ’’, ‘‘estimate ’’,
‘‘intend ’’, ‘‘may’’, ‘‘plan ’’, ‘‘seek ’’, ‘‘should ’’, ‘‘will ’’, ‘‘would ’’ or similar terms. Those statements
include, among other things, the discussion of the Group ’s growth strategy, expectations
concerning the Group ’s future operations and liquidity and capital resources. Investors of the
Shares are cautioned that reliance on any forward-looking statements involves risks and
uncertainties, and that, although the Group believes the assumptions on which the forward-
looking statements based on are reasonable, any or all of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements based on those assumptions could
also be incorrect. The uncertainties in this regard include, but are not limited to, those identified
in this section, many of whic h are not within the Group ’s control. In light of these and other
uncertainties, the inclusion of forward-looking statements in this prospectus should not be
regarded as representations that the Group ’s plans or objectives will be achieved, and investors
should not place undue reliance on such forward-looking statements. The Group does not
undertake any obligation to update publicly or release any revisions of any forward-looking
statements, whether as a result of new information, future events or otherwise. Please refer to
the section headed ‘‘Forward-looking Statements ’’in this prospectus for further details.
The Group strongly cautions you not to plac e any reliance on any information contained
in press articles, media coverage and/or research analyst reports regarding the Group,
the industry in which the Group operates, or the Global Offering
There may be press articles, media coverage and/or research analyst reports regarding the
Group, the industry in which the Group operates, or the Global Offering, which may include
certain financial information, financial projections and other information about the Group that do
not appear in this prospectus. The Group has not authorised the disclosure of any such
information in the press, media or research analyst reports. The Group does not accept any
responsibility for any such press articles, media coverage or research analyst reports, or the
accuracy or completeness or reliability of any such information or publication. T o the extent that
any such information appearing in publications other than this prospectus is inconsistent or
conflicts with the information contained in this prospectus, the Group disclaims it. Accordingly,
prospective investors should not rely on any such information. In making your decision as to
whether to purchase the Shares, you should rely only on the financial, operational and other
information included in this prospectus.
RISK FACTORS
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In preparation for the Listing, the Company has applied for the following waivers from strict
compliance with the relevant pr ovisions of the Listing Rules:
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, the Company must have sufficient management
presence in Hong Kong, which normally means that at least two executive directors must be
ordinarily resident in Hong Kong. Given that (i) the core business operations of the Group are
principally located, managed and conducted in the PRC and the Group ’sh e a do f f i c ei ss i t u a t e d
in Jiangxi Province, the PRC; (ii) the executive Directors and senior management team
principally reside in the PRC; and (iii) the manag ement and operations of the Group have mainly
been under the supervision of the executive Directors and senior management, who are
principally responsible for the overall management, corporate strategy, planning, business
development and control of the Group ’s businesses and it is important for them to remain in
close proximity to the Group ’s operation located in the PRC, the Company considers that it
would be difficult and commercially not feasible for the Company to appoint two executive
Directors who are ordinary residents of Hong Kong and station them in Hong Kong or to relocate
the executive Directors to Hong Kong for the purpose of satisfying the requirements under Rule
8.12 of the Listing Rules. For the above reasons, the Company does not have, and does not
contemplate in the foreseeable future that it will have sufficient management presence in Hong
Kong for the purpose of satisfying the requirement under Rule 8.12 of the Listing Rules.
Accordingly, the Company has applied to the Stock Exchange for, and the Stock Exchange
has granted us, a waiver from strict compliance with Rule 8.12 of the Listing Rules. The
Company will ensure that there are adequate and efficient arrangements to achieve regular and
effective communication between the Company and the Stock Exchange as well as compliance
with the Listing Rules by way of the following arrangements:
(a) Authorised representatives : the Company has appointed Mr. Liu Dingyi, an
executive Director and a joint company secretary, and Ms. Wong Wai Yee, Ella ( ‘‘Ms.
Wong ’’), a joint company secretary, as the authorised representatives ( ‘‘Authorised
Representatives ’’) for the purpose of Rule 3.05 of the Listing Rules. The Authorised
Representatives will act as the Company ’s principal channel of communication with
the Stock Exchange and would be readily contactable by phone, facsimile and email
to deal promptly with enquiries from the Sto ck Exchange. Ms. Wong ordinarily resides
in Hong Kong whereas Mr. Liu ordinarily resides in the PRC, and Mr. Liu possesses
valid travel documents and is able to renew such travel documents when they expire
in order to visit Hong Kong. Accordingly, the Authorised Representatives will be able
to meet with the relevant members of the S tock Exchange to discuss any matters in
relation to the Company within a reasonable period of time. See ‘‘Directors and Senior
Management ’’ in this prospectus for more information about the Authorised
Representatives.
(b) Directors : to facilitate communication with the Stock Exchange, the Company has
provided the Authorised Representatives and the Stock Exchange with the contact
details of each of the Directors. In the event that any Director expects to travel or
otherwise be out of office, he or she will provide the phone number of the place of his/
her accommodation to the Authorised Representatives. T o the best of the Company ’s
knowledge and information, each Director who is not ordinarily resident in Hong Kong
WAIVERS FROM STRICT COMPLIANCE WITH LISTING RULES
– 66 –


--- page 76 ---
possesses or can apply for valid travel documents to visit Hong Kong and can meet
with the Stock Exchange within a reasonable period after requested by the Stock
Exchange.
(c) Compliance adviser : the Company has appointed Zhongtai International Capital
Limited as its compliance adviser (the ‘‘Compliance Adviser ’’) in compliance with
Rule 3A.19 of the Listing Rules. The Compliance Adviser will, among other things and
in addition to the Authorised Representativ es, provide the Company with professional
advice on continuing obligations under the Listing Rules and act as additional channel
of communication of the Company with the Stock Exchange during the period from the
Listing Date to the date on which the Company complies with Rule 13.46 of the Listing
Rules in respect of its financial results for the first full financial year immediately after
the Listing. The Compliance Adviser will be available to answer enquiries from the
Stock Exchange and will act as the principal channel of communication with the Stock
Exchange when the Authorised Representatives are not available.
WAIVER IN RELATION TO JOINT COMPANY SECRETARIES
According to Rules 3.28 and 8.17 of the Listing Rules and Chapter 3.10 of the Guide for
New Listing Applicants published by the Stock Exchange effective from 1 January 2024, the
secretary of an issuer must be a person who has the requisite knowledge and experience to
discharge the functions of the company secretary and is either (i) a member of the Hong Kong
Chartered Governance Institute, a solicitor or barrister as defined in the Legal Practitioners
Ordinance (Chapter 159 of the Laws of Hong Kong) or a certified public accountant as defined
in the Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong); or (ii) an
individual who, by virtue of his academic or professional qualifications or relevant experience, is,
in the opinion of the Stock Exchange, capable of discharging the functions of company
secretary.
The Company proposes to appoint Mr. Liu Dingyi and Ms. Wong as the Company ’s joint
company secretaries. Mr. Liu is an executive Director of the Company and is responsible for
overseeing legal and compliance activities of the Group. Although Mr. Liu does not possess the
qualifications set out in Rule 3.28 of the Listi ng Rules, the Company believes it would be in the
best interests of the Company to appoint him as one of the joint company secretaries due to his
management role in the Company and his thorough understanding of the internal administration
and business operations of the Group. In addition, as the Group ’s headquarter and principal
operations are located in the PRC, the Directors believe that it is necessary to appoint Mr. Liu
as a company secretary whose presence in the PRC enables him to attend the day-to-day
corporate secretarial matters of the Group. The Company has appointed Ms. Wong, a Chartered
Governance Professional and a fellow of both The Hong Kong Chartered Governance Institute
(formerly known as The Hong Kong Institute of Chartered Secretaries) and The Chartered
Governance Institute (formerly known as The Institute of Chartered Secretaries and
Administrators) another in the United Kingdom, who is qualified under Rule 3.28 of the Listing
Rules, to act as the other joint company secretary to provide guidance to and assist Mr. Liu on
an on-going basis. Being a director of Corporate Services Division of Tricor Services Limited,
the Directors are of the view that Ms. Wong is a person who is qualified and suitable to provide
assistance to Mr. Liu for the three-year peri od from the Listing Date so as to enable him to
acquire the relevant experience (as required under Note 2 to Rule 3.28 of the Listing Rules) to
duly discharge his duties.
WAIVERS FROM STRICT COMPLIANCE WITH LISTING RULES
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--- page 77 ---
Accordingly, the Company has applied to the Stock Exchange for, and the Stock Exchange
has granted, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17 of
the Listing Rules on the condition that Mr. Liu will be assisted by Ms. Wong as a joint company
secretary throughout the three-year period from the Listing Date. Apart from discharging in her
role as one of the joint company secretaries, Ms. Wong will guide and assist Mr. Liu to acquire
the relevant experience as required under Rule 3.28 of the Listing Rules. She will be able to
provide necessary guidance, direction and support to Mr. Liu from time to time and to explain to
both Mr. Liu and the Company the relevant provisions and requirements under the Listing Rules
and other applicable Hong Kong laws and regulations. Ms. Wong is expected to work closely
with Mr. Liu and will maintain regular contact with Mr. Liu and the Directors and senior
management of the Company.
In addition, the Company will ensure both Mr. Liu and Ms. Wong to comply with the
requirement under Rule 3.29 of the Listing Rules to take no less than 15 hours of relevant
professional training annually and will enhance his knowledge of the Listing Rules during the
three-year period from the Listing Date. Ms. Wong will guide and assist Mr. Liu to enable him to
acquire the requisite company secretarial knowledge and experience. The Company will further
ensure that Mr. Liu has access to the relevant training and support that would enhance his
understanding of the Listing Rules and the duties of a company secretary of an issuer listed on
the Stock Exchange. The Compli ance Adviser will also provide guidance and advice to the
Company and joint company secretaries as to the Listing Rules and all other applicable laws
and regulations. Such waiver will be revoked immediately if and when Ms. Wong ceases to
provide such assistance or the Company commits any material breaches of the Listing Rules
during the three-year period from the Listing Date. At the end of the three-year period, the
Company must demonstrate and seek the confirmation of the Stock Exchange that Mr. Liu,
having had the benefit of Ms. Wong ’s assistance for three years, will have acquired the relevant
experience within the meaning of Rule 3.28 of the Listing Rules and is capable of discharging
the responsibilities of a company secretary, s o that a further waiver will not be necessary.
WAIVERS FROM STRICT COMPLIANCE WITH LISTING RULES
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DIRECTORS ’ R E S P O N S I B I L I T YF O RT H EC O N T E N T SO FT H I SP R O S P E C T U S
This prospectus, for which the Directors (including any proposed Director who is named as
such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws
of Hong Kong) and the Listing Rules for the purpose of giving information with regard to the
Group. The 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;
 there are no other matters the omission of which would make any statement herein or
in this prospectus misleading; and
 all opinions expressed in this prospectus have been arrived at after due and careful
consideration and are founded on basis and assumptions that are fair and reasonable.
INFORMATION AND REPRESENTATION
The Company has not authorised anyone to provide any information or to make any
representation not contained in this prospectus. You should not rely on any information or
representation not contained in this prospectus as having been authorised by the Company, the
Sole Overall Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the Joint Lead
Managers, the Sole Sponsor, the Underwriters or any of their respective directors, officers or
representatives or any other person involved in the Global Offering. No representation is made
that there has been no change or development reasonably likely to involve a change in the
Group ’s affairs since the date of this prospectus or to imply that the information contained in this
prospectus is correct as at any date subsequent to the date of this prospectus.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers if they are in any doubt as to the taxation implications in relation to subscribing for,
purchasing, holding or disposing of, and dealing in the Shares (or exercising rights attaching to
them).
It is emphasised that none of the Company, the Sole Overall Coordinator, the Sole Global
Coordinator, the Joint Bookrunners, the Joint Lead Managers, the Sole Sponsor, any of the
Underwriters, any of their respective directors, agents, advisers, employees, personnel or any
other persons or parties involved in the Global Offering accepts responsibility for any tax affairs
or liabilities of any person resulting from the subscription for, purchase, holding or disposing of,
dealing in the Shares, or the exercise of any rights attaching to the Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 79 ---
I s s u e r................... Z h o n g g a nC o m m u n i c a t i o n( G r o u p )H o l d i n g sL i m i t e d
The Global Offering . . . . . . . . . The Global Offering of (i) initially 16,000,000 new
Shares for subscription by the public in Hong Kong
(subject to reallocation) and (ii) initially 144,000,000
new Shares for subscription under the International
Placing (subject to reallocation and the Over-allotment
Option).
If the Over-allotment Option is exercised, the Company
will be issuing up to 24,000,000 new Shares.
For further details regarding the structure of the Global
Offering, please refer to the section headed ‘‘Structure
and Conditions of the Global Offering ’’ in this
prospectus.
Offer Price range . . . . . . . . . . . Not more than HK$1.25 and not less than HK$1.13 per
Offer Share
Over-allotment Option and
S t a b i l i s a t i o n.............
Up to 24,000,000 additional new Shares to be issued
by the Company. For further details of the
arrangements relating to th e Over-allotment Option and
Stabilisation, please refer to the section headed
‘‘Structure and Conditions of the Global Offering ’’in this
prospectus.
Procedure for application for the
Hong Kong Public Offer
S h a r e s .................
Please refer to the section headed ‘‘How to Apply for
t h eH o n gK o n gP u b l i cO f f e rS h a r e s’’in this prospectus.
Conditions of the Hong Kong
P u b l i cO f f e r .............
Details of the conditions of the Hong Kong Public Offer
are set out in the paragraph headed ‘‘Structure and
Conditions of the Global Offering – Conditions of the
Global Offering ’’in this prospectus.
Underwriting . . . . . . . . . . . . . . The listing of the Offer Shares on the Stock Exchange
is sponsored by the Sole Sponsor. The Hong Kong
Public Offer is fully underwritten by the Hong Kong
Underwriters pursuant to the Hong Kong Underwriting
Agreement. The International Placing is expected to be
fully underwritten by the International Underwriters
pursuant to the International Underwriting Agreement to
be entered into by the Company and the International
Underwriters, among other parties. For further details
relating to the underwriting arrangements, please refer
to the section headed ‘‘Underwriting ’’in this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 80 ---
Lock-up undertakings by the
Company and the Controlling
S h a r e h o l d e r s ............
Please refer to the paragraphs headed ‘‘Underwriting –
Underwriting arrangements and expenses – Undertakings
– Lock-up undertakings to the Stock Exchange ’’ and
‘‘Underwriting – Underwriting arrangements and expenses
– Undertakings – Lock-up undertakings to the Hong Kong
Underwriters ’’in this prospectus.
Register of members . . . . . . . . The principal register of members will be maintained by
the principal share registrar, Ogier Global (Cayman)
Limited, in the Cayman Islands, and the branch register
of members will be maintained by the Hong Kong Share
Registrar, Tricor Investor Services Limited, in Hong
Kong.
Stamp duty . . . . . . . . . . . . . . . Dealings in the Shares registered on the Company ’s
Hong Kong branch register of members will be subject
to Hong Kong stamp duty. The current ad valorem rate
of Hong Kong stamp duty is 0.1% on the higher of the
consideration for or the market value of the Shares and
it is charged on the purchaser on every purchase and
on the seller on every sale of the Shares. In other
words, a total stamp duty of 0.2% is currently payable
on a typical sale and purchas e transaction involving the
Shares.
Transfers of the Shares registered on the Company ’s
principal register of members in Cayman Islands will
n o tb es u b j e c tt ot h eC a y m a nI s l a n d ss t a m pd u t y
unless the Company holds an interest in land in the
Cayman Islands.
Application for listing on
t h eS t o c kE x c h a n g e .......
Application has been made to the Listing Committee for
the granting of approval for the listing of, and
permission to deal in, the Shares in issue and to be
issued pursuant to the Global Offering (including any
Shares which may be issued pursuant to the
Capitalisation Issue, the exercise of the Over- allotment
Option or any options which may be granted under the
Share Option Scheme). No part of the Shares or the
loan capital of the Company is listed on or dealt in on
any other stock exchange and no such listing or
permission to list is being or proposed to be sought in
the near future.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 81 ---
Restrictions on offers and offers
f o rs a l e .................
No action has been taken to permit a public offering of
the Offer Shares in any jurisdiction other than Hong
Kong, or the distribution of this prospectus in any
jurisdiction other than Hong Kong. Accordingly, this
prospectus may not be used for the purpose of, and
does not constitute, an offer or invitation in any
jurisdiction or in any cir cumstance in which such an
offer or invitation is not authorised or to any person to
whom it is unlawful to make such an offer or invitation.
Eligibility for CCASS. . . . . . . . . Subject to the granting of the approval for the listing of,
and permission to deal in, the Shares on the Stock
Exchange and compliance of the stock admission
requirements of HKSCC, the Shares will be accepted
as eligible securities by HKSCC for deposit, clearance
and settlement in CCASS with effect from the Listing
Date or any other date as determined by HKSCC.
Settlement of transactions between participants of the
Stock Exchange is required to take place in CCASS on
the second settlement day after any trading day. You
should seek the advice of your stockbroker or other
professional adviser for details of those settlement
arrangements as such arrangements will affect your
rights and interests.
All necessary arrangements have been made for the
Shares to be admitted into CCASS. All activities under
CCASS are subject to the General Rules of HKSCC
and HKSCC Operational Procedures in effect from time
to time.
L a n g u a g e ................ I f t h e r e i s a n y i n c o n s i s t e n c y b e t w e e n t h e E n g l i s h
version and the Chinese tran slation of this prospectus,
the English version of this prospectus shall prevail.
Rounding of figures . . . . . . . . . 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 arithmetic aggregation of the
figures preceding them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 82 ---
Currency conversion. . . . . . . . . Solely for your convenience, this prospectus contains
translations of certain RMB amounts into Hong Kong
dollars at specified rates. You should not construe
these translations as representations that the RMB
amounts could actually be, or have been, converted
into Hong Kong dollar amounts at the rates indicated or
at all. Unless indicated otherwise, the translations of
RMB amounts into Hong Kong dollars have been made
a tt h er a t eo fR M B 1 . 0t oH K $ 1 . 1 .
Commencement of dealing in
t h eS h a r e s..............
Dealings in the Shares on the Main Board are expected
to commence at 9:00 a.m. (Hong Kong time) on
Wednesday, 3 July 2024. Shares will be traded in
board lots of 2,000 Shares each.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 73 –


--- page 83 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Liu Haoqiong
（ 劉皓瓊 ）.....................
Room 502, Unit 1, Building 2
No. 38 Qingshan South Road
Donghu District
Nanchang City
Jiangxi Province, PRC
Chinese
Mr. Peng Shengqian
（ 彭聲謙 ）.....................
Room 402
No. 42, Changqiao Fifth Village
Xuhui District
Shanghai, PRC
Chinese
Ms. Xie Xiaolan
（ 謝小蘭 ）.....................
N o .5 ,D a n g j i aR o a d
Donghu District, Nanchang City
Jiangxi Province, PRC
Chinese
Mr. Liu Dingli
（ 劉鼎立 ）.....................
Room 502, Unit 1, Building 2
No. 38 Qingshan South Road
Donghu District
Nanchang City
Jiangxi Province, PRC
Chinese
Mr. Liu Dingyi
（ 劉鼎議 ）.....................
Room 502, Unit 1, Building 2
No. 38 Qingshan South Road
Donghu District
Nanchang City
Jiangxi Province, PRC
Chinese
Mr. Zhou Zhiqiang
（ 周志強 ）.....................
Room 602, Unit 4
Block 2, Building 3
849 Fenglin West Street
Nanchang Economic and
T echnological Development Zone
Jiangxi Province, PRC
Chinese
Independent Non-executive
Directors
Mr. Yu Shiyong
（ 余世勇 ）.....................
Wuyuan West Third Lane
Huli District
Xiamen City
Fujian Province, PRC
Chinese
Mr. Li Yinguo
（ 李銀國 ）.....................
No. 14 3-2
No. 131 Yupei Road
Shapingbei District
Chongqing City, PRC
Chinese
Mr. Zhu Yugang
（ 朱玉鋼 ）.....................
Room 105, Unit 2, Building 13
No. 266 Guidian Road
Xihu District
Nanchang City
Jiangxi Province, PRC
Chinese
Please refer to the section headed ‘‘Directors and Senior Management ’’ in this prospectus
for further details of the Directors and the Group ’s senior management members.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 74 –


--- page 84 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor ............. Zhongtai International Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and type 6 (advising on corporate
finance) regulated activities as defined in the SFO
19/F
Li Po Chun Chambers
189 Des Voeux Road Central
Central
Hong Kong
Sole Overall Coordinator and
Sole Global Coordinator ...
Zhongtai International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
19/F
Li Po Chun Chambers
189 Des Voeux Road Central
Central
Hong Kong
Joint Bookrunners ......... Zhongtai International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
19/F
Li Po Chun Chambers
189 Des Voeux Road Central
Central
Hong Kong
CCB International Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 4 (advising on securities) and
type 6 (advising on corporate finance) regulated activities as
defined in the SFO
12/F
CCB T ower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 75 –


--- page 85 ---
BOCOM International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 4 (advising on securities) and type 5 (advising on
futures contracts) regulated activities as defined in the SFO
9/F
Man Yee Building
68 Des Voeux Road Central
Hong Kong
CMB International Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and type 6 (advising on corporate
finance) regulated activities as defined in the SFO
45/F
Champion T ower
3 Garden Road
Central
Hong Kong
ABCI Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and type 6 (advising on corporate
finance) regulated activities as defined in the SFO
11/F
Agricultural Bank of China T ower
50 Connaught Road Central
Hong Kong
ICBC International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
37/F , ICBC T ower
3 Garden Road
Hong Kong
CMBC Securities Company Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
45/F
One Exchange Square
8 Connaught Place
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 76 –


--- page 86 ---
First Shanghai Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 4 (advising on securities) and
type 6 (advising on corporate finance) regulated activities as
defined in the SFO
19/F , Room 2402-04 &2505-10
Wing On House
71 Des Voeux Road Central
Hong Kong
China Sunrise Securities (International) Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
Unit 4502, 45/F
The Center
99 Queen ’s Road Central
Central
Hong Kong
Joint Lead Managers ....... Zhongtai International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
19/F
Li Po Chun Chambers
189 Des Voeux Road Central
Central
Hong Kong
CCB International Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 4 (advising on securities) and
type 6 (advising on corporate finance) regulated activities as
defined in the SFO
12/F
CCB T ower
3 Connaught Road Central
Central
Hong Kong
BOCOM International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 4 (advising on securities) and type 5 (advising on
futures contracts) regulated activities as defined in the SFO
9/F
Man Yee Building
68 Des Voeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 77 –


--- page 87 ---
CMB International Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and type 6 (advising on corporate
finance) regulated activities as defined in the SFO
45/F
Champion T ower
3 Garden Road
Central
Hong Kong
ABCI Securities Company Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
10/F
Agricultural Bank of China T ower
50 Connaught Road Central
Hong Kong
ICBC International Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
37/F , ICBC T ower
3 Garden Road
Hong Kong
CMBC Securities Company Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
45/F
One Exchange Square
8 Connaught Place
Central
Hong Kong
First Shanghai Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 4 (advising on securities) and
type 6 (advising on corporate finance) regulated activities as
defined in the SFO
19/F , Room 2402-04 &2505-10
Wing On House
71 Des Voeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 78 –


--- page 88 ---
China Sunrise Securities (International) Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
Unit 4502, 45/F
The Center
99 Queen ’s Road Central
Central
Hong Kong
Yue Xiu Securities Company Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 4 (advising on securities) and type 5 (advising on
futures contracts) regulated activities as defined in the SFO
Rooms Nos. 4917-4937, 49/F
S u nH u n gK a iC e n t r e
No.30 Harbour Road
Wanchai
Hong Kong
Patrons Securities Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
Unit 3214, 32/F
Cosco T ower
183 Queen ’s Road Central
Sheung Wan
Hong Kong
Victory Securities Company Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
t y p e4( a d v i s i n go ns e c u r i t i e s )a n dt y p e9( a s s e t
management) regulated activities as defined in the SFO
Room 1101-3, 11/F
Yardley Commercial Building
3 Connaught Road West
Sheung Wan
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 79 –


--- page 89 ---
Futu Securities International (Hong Kong) Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 3 (leveraged foreign exchange trading), type 4 (advising
on securities), type 5 (advising on futures contracts), type 7
(providing automated trading services) and type 9 (asset
management) regulated activities as defined in the SFO
34/F
United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 4 (advising on securities ), type 5 (advising on futures
contracts) and type 9 (asset management) regulated
activities as defined in the SFO
1/F
308 Central Des Voeux
308 Des Voeux Road Central
Hong Kong
Livermore Holdings Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities) and ty pe 4 (advising on securities)
regulated activities as defined in the SFO
Unit 1214A, 12/F , T ower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Valuable Capital Limited
A corporation licenced under the SFO to carry on type 1
(dealing in securities), type 2 (dealing in futures contracts),
type 4 (advising on securities ), type 5 (advising on futures
contracts) and type 9 (asset management) regulated
activities as defined in the SFO
RM 3601-06 & 3617-19, 36/F
China Merchants T ower
Shun T ak Centre
168-200 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 80 –


--- page 90 ---
Legal advisers to the Company As to Hong Kong law:
Nixon Peabody CWL
5/F & Unit 1002, 10/F
Standard Chartered Bank Building
4-4A Des Voeux Road Central
Central, Hong Kong
As to PRC law:
JunZeJun Law Offices
28 & 29 Floor
Landmark
No.4028 Jintian Road
Futian District
Shenzhen 518035, PRC
As to Cayman Islands law:
Ogier
11th Floor
Central T ower
28 Queen ’s Road Central
Central, Hong Kong
Legal advisers to the Sole
Sponsor and the
Underwriters ............
As to Hong Kong law:
Holman Fenwick Willan
15th Floor
To w e r O n e
Lippo Centre
89 Queensway
Admiralty, Hong Kong
As to PRC law:
Guangdong Zhuojian Law Firm
3rd/20th Floor
Pingan Building
No.1099 Shennan Middle Road
Futian District
Shenzhen City, PRC
Auditor and reporting
accountants .............
KPMG
Certified Public Accountants
8th Floor
Prince ’s Building
10 Chater Road
Central, Hong Kong
Property valuer ............ HG Appraisal & Consulting Limited
17/F
80 Gloucester Road
Wanchai
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 81 –


--- page 91 ---
Industry consultant ........ Ipsos Asia Limited
6/F
C h i n aL i f eC e n t e rT o w e rA
One HarbourGate
18 Hung Luen Road
Hung Hom, Hong Kong
Receiving banks ........... Industrial and Commercial Bank of China (Asia) Limited
33/F
ICBC T ower
3 Garden Road
Central, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 82 –


--- page 92 ---
Registered office ................ 8 9N e x u sW a y ,C a m a n aB a y
Grand Cayman, KY1-9009
Cayman Islands
Head office and principal place of
business in PRC ...............
Room 101, Block 99
2799 Tianxiang Avenue
Nanchang Jiahai Industrial Park
Nanchang High-tech Industrial Development Zone
Nanchang City
Jiangxi Province, the PRC
Principal place of business
in Hong Kong .................
5/F
Manulife Place
3 4 8K w u nT o n gR o a d
Kowloon, Hong Kong
Company ’s website ............... www.gantongjt.com
(The information on the website does not form part of
this prospectus)
Joint company secretaries ......... Mr. Liu Dingyi （ 劉鼎議）
Room 502, Unit 1, Building 2
No. 38 Qingshan South Road
Donghu District
Nanchang City
Jiangxi Province, PRC
Ms. Wong Wai Yee, Ella （ 黄慧兒）
5/F
Manulife Place
3 4 8K w u nT o n gR o a d
Kowloon, Hong Kong
Authorised representatives ......... Mr. Liu Dingyi （ 劉鼎議）
Room 502, Unit 1, Building 2
No. 38 Qingshan South Road
Donghu District
Nanchang City
Jiangxi Province, PRC
Ms. Wong Wai Yee, Ella （ 黄慧兒）
5/F
Manulife Place
3 4 8K w u nT o n gR o a d
Kowloon, Hong Kong
CORPORATE INFORMATION
– 83 –


--- page 93 ---
Audit Committee ................. M r .Y uS h i y o n g （ 余世勇 ）(Chairman)
Mr. Zhu Yugang （ 朱玉鋼 ）
Mr. Li Yinguo （ 李銀國 ）
Nomination Committee ............ M r .Z h uY u g a n g （ 朱玉鋼 ）(Chairman)
Mr. Yu Shiyong （ 余世勇 ）
Mr. Liu Dingli （ 劉鼎立 ）
Remuneration Committee .......... M r .L iY i n g u o （ 李銀國 ）(Chairman)
Mr. Yu Shiyong （ 余世勇 ）
Mr. Peng Shengqian （ 彭聲謙 ）
Compliance adviser .............. Zhongtai International Capital Limited
19/F
Li Po Chun Chambers
189 Des Voeux Road Central
Central, Hong Kong
Hong Kong Share Registrar ........ Tricor Investor Services Limited
17/F
Far East Finance Centre
16 Harcourt Road
Hong Kong
Cayman Islands principal
share registrar and transfer office ..
Ogier Global (Cayman) Limited
89 Nexus Way, Camana Bay
Grand Cayman, KY1-9009
Cayman Islands
Principal bankers ................ China Construction Bank Corporation,
Nanchang Xihu Branch
No. 2 Yongshu Road
Xihu District
Nanchang City
Jiangxi Province
PRC
Bank of Communication Co., Ltd,
Jiangxi Provincial Branch
199 Huizhan Road
Honggutan
Nanchang City
Jiangxi Province
PRC
CORPORATE INFORMATION
– 84 –


--- page 94 ---
The information in the section below has been partly derived from various publicly
available government sources, market data providers and other independent third-party
sources. In addition, this section and elsewhere in the prospectus contains statistics and facts
extracted from the Ipsos Report, for the inclus ion in this prospectus. The information from
official government sources have not been independently verified by the Company, the Sole
Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the Underwriters, any of
our or their respective affiliates, directors or advisers or any other persons or parties involved
in the Global Offering, and no represe ntation is given as to its accuracy.
For a detailed discussion of the risks relating to our industry, please refer to the
paragraph headed ‘‘Risk Factors – Risks relating to the industry in which the Group operates ’’
in this prospectus.
SOURCE AND RELIABILITY OF THE INFORMATION
The Group has commissioned Ipsos, an independent market research company, to analyse
and report on the industry development and competitive landscape of the telecommunications
infrastructure services industry and digitalisation solution services industry in the PRC and
Jiangxi Province, for the period from 2019 to 2028 at a fee of HK$965,000. Ipsos is an
independent market research company, employing approximately 18,000 personnel worldwide
across 90 countries.
The information in the Ipsos Report is obtained by (i) primary research via telephone and
face to face interviews with key knowledge leaders; (ii) secondary desk research from
government statistics, industr y reports and other analyst reports; and (iii) performing client
consultation to facilitate the research including in-house background information of the client
(such as the business of the Group). The information and statistics as set forth in this section is
extracted from the Ipsos Report.
The following bases and assumptions are used in the market sizing and forecasting model
in the Ipsos Report: (i) the China economy will remain in steady growth across the period from
2024 to 2028, in the expectation that COVID-19 will continue to be under control; (ii) the supply
of and demand for products and services of the telecommunications infrastructure services
industry and digitalisation solution services industry in the PRC and Jiangxi Province are stable
over the forecast period; (iii) it is assumed that there is no external shock such as financial crisis
or natural disasters to affect the supply of and de mand for telecommunications infrastructure
services industry and digitalisation solution services industry in the PRC during the forecast
period; (iv) no industry regulation will have a dramatic or fundamental impact on the
telecommunications infrastructu re services industry and digitalisation solution services industry
in the PRC and Jiangxi Province during the forecast period.
The Directors confirmed that, as at the Latest Practicable Date, after taking reasonable
care, there is no adverse change in the market information since the date of the Ipsos Report
which may qualify, contradict, or have an impact on the information in this section. Except as
otherwise noted, all the data and forecasts contained in this section are derived from the Ipsos
Report.
INDUSTRY OVERVIEW
– 85 –


--- page 95 ---
OVERVIEW OF THE TELECOMMUNICATIONS INFRASTRUCTURE SERVICES INDUSTRY IN
THE PRC AND JIANGXI PROVINCE
The telecommunications industry in the PRC is dominated by the three telecommunications
network operators including China Unicom, China T elecom, and China Mobile (collectively the
‘‘Big Three ’’). They are state-owned enterprises, essentially forming a triopoly in the industry.
The Big Three as well as the telecommunications t ower infrastructure service provider, China
T ower, account for over 90% of the completed investments in telecommunications infrastructure
in the PRC.
Overall completed investments in telecommunications infrastructure in the PRC and
Jiangxi Province
The completed investment in telecommunicat ions infrastructure refers to the capital
expenditures of the Big Three, China T ower and the government-led telecommunications
infrastructure projects. The capital investments include both the purchase of equipment as well
as infrastructure services including netwo rk planning and design, and construction. The
following charts set out the overa ll completed investments in telecommunications infrastructure
i nt h eP R Ca n dJ i a n g x iP r o v i n c e :

384.8 407.2 405.8 419.3 420.5 433.5 446.1 459.0 471.7 484.6
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
RMB Billion
Completed investment in telecommunications infrastructure
in the PRC 2019 to 2028F
CAGR 19-23: 2.2% CAGR 24-28: 2.8%

9.1
12.7
10.1 10.7 11.4 11.8 12.2 12.6 13.1 13.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
RMB Billion
Completed investment in telecommunications infrastructure
in Jiangxi Province 2019 to 2028F
CAGR 19-23: 5.8% CAGR 24-28: 3.3%
Sources: MIIT ; Annual reports of listed companies; Ipsos
research and analysis
Sources: MIIT ; Jiangxi Provincial Statistic Bureau; Ipsos
research and analysis
The overall completed investments in telecommunications infrastructure in the PRC grew
from approximately RMB384.8 billion in 2019 to approximately RMB420.5 billion in 2023, at a
CAGR of approximately 2.2%. The increment was mainly attributed to massive 4G and 5G
networks development and the government-led investment projects on 5G infrastructure. The
overall completed investments in telecommunications infrastructure in the PRC is expected to
further increase from approximately RMB433.5 billion in 2024 to approximately RMB484.6 billion
i n2 0 2 8 ,a taC A G Ro fa p p r o x i m a t e l y2 . 8 % .T h eg r o w t hi se x p e c t e dt ob ed r i v e nb yc o m m e r c i a l
application of telecommunications technology and digitalisation of urban infrastructure.
The overall completed investments in telecommunications infrastructure in Jiangxi Province
grew from approximately RMB9.1 billion in 2019 t o approximately RMB11.4 billion in 2023, at a
CAGR of approximately 5.8%. In 2020, the province ’s completed investments in
telecommunications infrastructure surged by approximately 39.9% compared to 2019, attributed
to the investments by the Big Three and the provincial government in the Three-year Action Plan
for the Development of T elecommunications Infrastructure in Jiangxi Province (2018-2020) （ 江西
省信息通信基礎設施建設三年攻堅行動計劃（ 2018-2020 ））which sets the goal to invest over
RMB30 billion in telecommunications infrastructure in Jiangxi province, including core networks,
transmission networks, access networks, FTTPs, 4G/5G base stations, IoT networks and cloud
computing centres.
INDUSTRY OVERVIEW
– 86 –


--- page 96 ---
The overall completed investments in telecommunications infrastructure in Jiangxi Province
is expected to continue the growth at a CAGR of approximately 3.3% from 2024 to 2028, exceed
the national CAGR of approximately 2.8%. The growth is mainly supported by the favourable
policies implemented to promote digital transformation by the Jiangxi provincial government.
These policies aim to serve to kick-start the development trajectory during the period, and
beyond. Some of these policies would extend into 2035, while some of the policies may cover
the period from 2022 to 2025. For policies with an initial end date before 2027, it is expected
that these policies will continue to have po sitive lingering effects on the demand for
telecommunications services, and hence, the demand for telecommunications infrastructure on
an on-going basis. Some of the policies include:
 The Jiangxi provincial government issued the ‘‘Notice on the Medium- and Long-term
planning for Future Industry Development (2023-2035) ’’（ 關於江西省未來產業發展中長
期規劃（ 2023-2035 年 ）的通知 ）which is set the goal to accelerate the digitalisation of
existing industries as well as the commercialization of future technology. While nine
cities in have achieved the status of ‘‘Dual Gigabit Cities ’’（ 雙千兆城市 ）and over
50,000 units of manufacturing equipment have been upgraded to smart control, the
provincial government set the goal to develop over 50 IIoT platform and 10 IIoT
demonstration districts by 2035.
 The Three-year Action Plan to Promote the Development of Big Data Industry in
Jiangxi Province (2023-2025) （ 江西省促進大數據產業發展三年行動計劃（ 2023-2025 年 ））
announce to enhance communication infrastructure. Efforts are being made to fully
deploy gigabit optical networks and accelerate the construction of 10G-PON optical
line terminal (OLT) equipment, enabling w idespread access to gigabit capability for
household users and 10G capability for large enterprises and organisations. Continual
optimisation of core networks, transmission networks, and access networks is taking
place. Upgrades and renovations are being carried out for facilities such as data
centres, cloud platforms, and user terminals. Establishing and utilising the Nanchang
national-level backbone direct connectio n point and the dedicated international
internet data channels for Shangrao and Jiujiang are being prioritised.
 As the urbanisation rate of Jiangxi Province is approximately 63.1% in 2023 and is
lower than the national average of approximately 66.2%, it is expected that the
provincial government will continue to accelerate urbanisation policies in Jiangxi
Province and result in a higher growth in investment in infrastructure construction,
fixed broadband subscribers and mobile phone subscribers in comparison to the
national average.
INDUSTRY OVERVIEW
– 87 –


--- page 97 ---
Number of telecommunications network bas e stations in the PRC and Jiangxi Province
The base station is a fixed transceiver station serving as a central connection point for a
wireless device to communicate in a telecommunications network, which is a critical component
of a public mobile network that allows telecommunications network providers to deliver
continuous telecommunications services to the public. With the deployment of 5G technology,
the variety and amount of mobile traffic will increase substantially, and the number of base
stations is expected to expand to meet the increased demand. The number of
telecommunications network base stations typic ally reflects the level of investment in mobile
telecommunications infrastructure. The following charts set out the number of
telecommunications network base stations in the PRC and Jiangxi Province:

150.0 770.0 1,430.0 2,310.0 3,377.0 3,973.5 4,541.1 5,235.0 6,030.7 6,947.4
5,440.0
5,750.0
5,900.0
6,030.0
6,036.6 5,936.3 5,727.3
5,471.0
5,118.8
4,789.3
2,820.0
2,790.0
2,630.0
2,490.0
2,244.7 2,083.0 1,815.6 1,590.0 1,345.2 1,138.2
8,410.0
9,310.0
9,960.0
10,830.0
11,658.3 11,992.8 12,084.1 12,296.0 12,494.8 12,874.8
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
16,000.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
Thousand
Number of telecommunications network base stations in the PRC 2019 to 2028F
5G base stations 4G  base stations Others (2G, 3G) Total
CAGR 19-23: 8.5% CAGR 24-28: 1.8%
3.4 33.8 51.8 65.0
107.0 120.0 134.3 143.5 151.3 158.2144.4
152.5
161.0
173.0
184.0
192.0
197.3 195.0 192.9 188.6
53.8
53.2
50.1
47.5
42.8
39.7
34.6 31.1 26.3 22.3
201.6
239.5
262.9
285.5
333.8
351.7 366.2 369.5 370.4 369.1
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
Thousand
Number of telecommunications network base stations in Jiangxi Province 2019 to 2028F
5G base stations 4G  base stations Others (2G, 3G) Total
CAGR 19-23: 13.4% CAGR 24-28: 1.2%
Sources: MIIT ; Ipsos research and analysis Sources: MIIT ; Jiangxi Provincial Statistic Bureau; Ipsos
research and analysis
The number of base stations in the PRC grew from approximately 8.4 million in 2019 to
approximately 11.7 million in 2023, at a CAGR of approximately 8.5%. The growth is mainly
attributed to the expansion of both 4G and 5G network services. The number of 5G base
stations is estimated to reach about 6.9 million i n 2028, at a CAGR of approximately 15.0% from
2024 to 2028. The 14th Five-year Plan Information and Communication Industry Development
Plan（ ‘‘十四五’’信息通信行業發展規劃 ） sets the penetration target to build 26 5G base stations
for every ten thousands people in 2025.
The number of base stations in Jiangxi Province increased from approximately 201.6
thousand in 2019 to approximately 333.8 thousand in 2023, at a CAGR of approximately 13.4%.
The sustained growth in base stations is mainly attributed to the 5G telecommunications network
development, as new base stations are needed for 5G to penetrate into rural areas. The number
of base stations in Jiangxi Province is estimated to increase from approximately 351.7
thousands in 2024 to approximately 369.1 thousand in 2028, at a CAGR of approximately 1.2%,
representing sustained growth in Jiangxi Province. The growth in the number of 5G base
stations is offset by the retirement of the 2G and 3G base stations. The number of 5G stations is
estimated to increase from approximately 120.0 thousands in 2024 to approximately 158.2
thousands in 2028, at a CAGR of approximately 7.2%. The steady growth is mainly driven by
the local government ’s support in the 5G network infrastructure investment in Jiangxi Province.
The 14th Five-year Information and Communication Industry Development Plan of Jiangxi
Province（ 江西省‘‘十四五’’信息通信行業發展規劃 ） sets to build more than 100 thousands 5G
base stations in Jiangxi Province by 2025, achieving 80% coverage of 5G networks in both
urban and rural areas.
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The total length of telecommunicati ons network optical cable in the PRC
Optical cable is the core transmission media of the fixed line telecommunications network.
The number of telecommunications network opt ical cable typically reflects the level of
investment in fixed-line telecommunications infrastructure. The following charts set out the total
length of telecommunications network optical cable in the PRC and Jiangxi Province from 2019
to 2028:

46.3 50.6 53.7 58.5 64.3 69.5 72.2 76.6 81.1 85.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
Million Km
Total length of telecommunications network optical cable in the PRC 2019 to 2028F
CAGR 19-23: 8.6% CAGR 24-28: 5.4%

1.8 2.1 2.3 2.4 2.6 2.8 3.0 3.2 3.5 3.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
Million Km
Total length of telecommunications network optical cable in Jiangxi Province 2019 to 2028F
CAGR 19-23: 8.5% CAGR 24-28: 7.4%
Sources: MIIT ; Ipsos research and analysis Sources: MIIT ; Jiangxi Provincial Statistic Bureau; Ipsos
research and analysis
The length of overall telecommunications network optical cable in the PRC grew from
approximately 46.3 million km in 2019 to appro ximately 64.3 million km in 2023, at a CAGR of
approximately 8.6%. The constant growth of the telecommunications network optical cable is
mainly credited to the Broadband China Strategy and Implementation Plan （「寬帶中國」戰略及
實施方案 ）that sets to accelerate penetration of the high speed broadband services at internet
speed of over 100Mbps and 1000Mbps. The length of the overall telecommunications network
optical cable in PRC is expected to steadily incr ease from approximately 69.5 million km in 2024
to approximately 85.9 million km in 2028, at a C AGR of approximately 5.4%. The expected
steady growth is mainly attributed to th e prospective development of domestic
telecommunications networks with the support from the national policy of the Notice on
Accelerating the Construction of Broadband Frontiers （ 關於加快「寬帶邊疆」建設的通知 ）,w h i c h
is set to accelerate the development of both Fiber-to-the-home (FTTP) and 5G networks to
enable the best network efficiency, and to upgrade the telecommunications infrastructure of
public facilities in rural areas.
The length of overall telecommunications network optical cable network in Jiangxi Province
surged from approximately 1.8 million km in 2019 to approximately 2.6 million km in 2023, at a
CAGR of approximately 8.5%. The increase of the telecommunications network optical cable in
Jiangxi Province is mainly due to the investment in telecommunications infra structure, following
the local government ’s action plan for the development of te lecommunications infrastructures.
The length of overall telecommunications network optical cable in Jiangxi Province is expected
to increase from approximately 2.8 million km in 2024 to approximately 3.7 million km in 2028, at
a CAGR of approximately 7.4%. The expected growth is mainly attributed to the local
government ’s support of the 5G network developmen t plan in Jiangxi Province in line with
national policy to achieve comprehensive coverage of 5G networks in both urban and rural
areas. The People ’s Government of Jiangxi Province issued the 14th Five-year Digital Economy
Development Plan in Jiangxi Province （ 關於印發江西省‘‘十四五’’數字經濟發展規劃的通知 ）,w h i c h
proposes to continuously upgrade the digital infrastructure to accelerate the digital
transformation of industries.
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Value chain of the telecommunications infrastructure services industry
The PRC ’s telecommunications infrastructure services industry typically consists of key
suppliers of telecommunications infrastructur e services, telecommunications infrastructure
services providers, telecommunications network operators, and end users.
Value chain of the telecommunications infrastructure services industry
Upstream Mid-stream Downstream
Equipment
Planning and design services
Households
Individuals
Companies
Organisations
Construction services
Maintenance services
Network optimisation services
Labour
Construction
Materials
Key suppliers of
telecommunications
infrastructure services
Telecommunications infrastructure
services providers
Telecommunications
network operators
End users
Provide
telecommunications
services to end
users ( e.g., voice,
internet, television,
networking, and
data services)
Source: Ipsos research and analysis
The telecommunications infrastructure servi ces providers provide (i) planning and design
services; (ii) infrastructure construction services; (iii) maintenance services and (iv) network
optimisation. Companies in this industry may be either (i) companies focusing only one or two
telecommunications infrastructure services; or (ii) companies providing a full range of services in
relation to the telecommunications infrastructure services industry. T elecommunications
infrastructure services providers usually awar d telecommunications infrastructure services
projects from the Big Three and China T ower through tendering.
INDUSTRY OVERVIEW
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--- page 100 ---
The market value of the telecommunications infrastructure services industry in the PRC
The following chart sets out the market value of the PRC ’s telecommunications
infrastructure se rvices industry:
8.6 9.0 9.2 9.7 10.2 10.6 11.4 12.0 12.5
60.1 64.4 62.8 69.3 73.2 78.3 85.0 89.9 94.2
135.4
145.5 145.0
156.9
173.5 182.6 193.8 205.2
217.622.1
22.8 23.9
25.0
25.6
25.8
26.1
26.2
26.3
226.2
241.7 240.8
261.0
282.6
297.3
316.3
333.3
350.6
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
RMB Billion
Market value of telecommunications infrastructure services
in the PRC 2019 to 2028F
Network Optimisation Maintenance Construction Planning and Design Total
  CAGR 19-23: 5.7% CAGR 24-28: 5.5%
Planning and Design
Construction
Maintenance
Network Optimisation
Planning and Design
Construction
Maintenance
Network Optimisation
CAGR’ 19-23
3.7%
6.4%
5.0%
4.4%
CAGR’ 24-28
0.6%
5.9%
6.0%
5.3%
13.0
98.7
230.0
26.5
368.2
Notes: The market size refers to the telecommunications infras tructure services provided to the Big Three and China
To w e r
Sources: Ipsos research and analysis
The overall market value of the telecommunications infrastructure services industry in the
PRC grew from approximately RMB226.2 billion i n 2019 to approximately RMB282.6 billion in
2023, at a CAGR of approximately 5.7%, led by the massive demand for 4G and 5G
infrastructure construction services. The overall market value is estimated to grow from
approximately RMB297.3 billion in 2024 to appr oximately RMB368.2 billion in 2028, at a CAGR
of approximately 5.5%. Infrastructure construction services will continue to be the key driver of
the market in the foreseeable future.
The market value of the telecommunications infrastructure construction services industry
grew from approximately RMB135.4 billion in 2 019 to approximately RMB173.5 billion in 2023,
at a CAGR of approximately 6.4%. The increase in market value of telecommunications
infrastructure construction wa s mainly attributed to the transformation and expansion of 4G and
5G networks as new base stations were required. The overall market value is estimated to grow
from approximately RMB182.6 billion in 2024 to approximately RMB230.0 billion in 2028, at a
CAGR of approximately 5.9%. The growth will be driven by investments in commercial
applications of telecommunications technologies such as the Internet of things (IoT) and Internet
Data Centre (IDC), etc.
The market value of the telecommunications infrastructure maintenance services is
estimated to grow from approximately RMB78.3 b illion in 2024 to approximately RMB98.7 billion
in 2028, at a CAGR of approximately 6.0%. The demand for maintenance services is expected
to increase due to the expansion of the network of telecommunications infrastructures including
both 4G and 5G base stations.
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--- page 101 ---
The market value of the telecommunications infrastructure services industry in Jiangxi
Province
The following chart sets out the market value of the telecommunications infrastructure
services industry in Jiangxi Province:
Planning and Design
Construction
Maintenance
Network Optimisation
Planning and Design
Construction
Maintenance
Network Optimisation
CAGR’ 19-23
3.6%
12.1%
5.2%
4.4%
CAGR’ 24-28
1.6%
6.3%
6.3%
6.0%

0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4
1.5 1.6 1.6 1.7 1.8 2.0 2.1 2.3 2.4 2.5
3.1
0.5
0.5
0.6
0.6
0.6 0.6 0.6
0.6 0.7
0.7
5.3
7.0
5.6
6.6
7.6 8.1 8.6 9.1 9.7 10.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
RMB Billion
Network Optimisation Maintenance Construction Planning and Design Total
4.6
3.2 4.0
4.9 5.2 5.5 5.9 6.3 6.7
0.2
Market value of telecommunications infrastructure services
in Jiangxi Province 2019 to 2028F
CAGR 19-23: 9.2% CAGR 24-28: 5.9%
Notes: The market size refers to the telecommunications infras tructure services provided to the Big Three and China
To w e r
Sources: MIIT ; National Bureau of Statistics of China; Ipsos research and analysis
The overall market value of the telecommunica tions infrastructure services industry in
J i a n g x iP r o v i n c eg r e wf r o ma p p r o x i m a t e l yR M B 5 . 3b i l l i o ni n2 0 1 9t oa p p r o x i m a t e l yR M B 7 . 6
billion in 2023, at a CAGR of approximately 9.2%. The market value increased continuously,
which was driven by massive construction of 4G and 5G basic infrastructures, such as base
stations, telecommunications pipeline engineering, and other ancillary works that make the base
stations work, following a similar developing trend to the PRC. The overall market value is
estimated to grow from approximately RMB8.1 b illion in 2024 to approximately RMB10.2 billion
in 2028, at a CAGR of approximately 5.9%. The steady growth is expected to be driven by the
continuous investment in construction of telecommunications infrastructure for commercial and
governmental applications.
The market value of the telecommunications infrastructure construction services industry in
J i a n g x iP r o v i n c eg r e wf r o ma p p r o x i m a t e l yR M B 3 . 1b i l l i o ni n2 0 1 9t oa p p r o x i m a t e l yR M B 4 . 9
billion in 2023, at a CAGR of approximately 12.1 %. The investments in Jiangxi Province peaked
in 2020, the last year of the Three-year Action Plan for the Development of T elecommunications
Infrastructures in Jiangxi Province (2018-2020) （ 江西省信息通信基礎設施建設三年攻堅行動計劃
（ 2018-2020 ））. The overall market value of telecommunications infrastructure construction
services in Jiangxi Province is estimated to grow from approximately RMB5.2 billion in 2024 to
approximately RMB6.7 billion in 2028, at a CAGR of approximately 6.3%. Launched in 2022, the
14th Five-year Digital Economy Development Plan in Jiangxi Province （ 關於印發江西省‘‘十四
五’’數字經濟發展規劃的通知 ）, sets the development of the digital economy in 5G and IIoT , and
proposes to upgrade the digital infrastructure to accelerate the digital transformation of
industries.
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--- page 102 ---
The market value of the telecommunications network infrastructure maintenance services is
estimated to grow from approximately RMB2.0 b illion in 2024 to approximately RMB2.5 billion in
2028, at a CAGR of approximately 6.3%. The steady growth is expected to be driven by the
expansion of the network of telecommunications infrastructures including both 4G and 5G base
stations.
The average annual wage of the workers in the telecommunications infrastructure
services industry in the PRC
T elecommunications infrastructure service s generally involves labour intensive works,
therefore wage of workers is the major cost for providing such services. The following chart sets
out the average annual wage of the workers in the telecommunications infrastructure services
industry in the PRC:

65,063.9 69,611.0
75,883.0 77,315.0 81,478.3 85,767.7 90,222.0 94,780.2 99,521.1
108,577.5
0.0
20,000.0
40,000.0
60,000.0
80,000.0
100,000.0
120,000.0
140,000.0
2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F
RMB
Average annual wage of the workers in telecommunications infrastructure
services industry in the PRC 2019 – 2028F
CAGR 19-23: 5.8% CAGR 24-28: 6.1%
Sources: IMF; China yearbooks; Ipsos research and analysis
The average annual wage of the workers in the telecommunications infrastructure services
industry grew at a CAGR of approximately 5.8% from 2019 to 2023. The growth is mainly
attributed to the rapid transformation of the t elecommunications network from 3G to 4G or from
4G to 5G, resulting in the surging demand for skille d telecommunications l abour. It is forecasted
that the average annual wage of workers is expected to grow at a CAGR of approximately 6.1%
from 2024 to 2028 owing to the continuous demand for experienced workers for construction of
telecommunications infrastructure.
COMPETITIVE LANDSCAPE OF THE TELECOMMUNICATIONS INFRASTRUCTURE
SERVICES INDUSTRY IN THE PRC AND JIANGXI PROVINCE
The telecommunications infrastructure services industry in the PRC is highly fragmented
with low concentration. In 2023, there were approximately 6,004 companies in the PRC certified
with Communications Project Implementation Gen eral Contracting Enterprises Qualification （ 通
信工程施工總承包資質 ）Class 1, Class 2, or Class 3. 366 companies or approximately 6.1% of
which were certified with the Class 1 qualification. Class 1 enterprises are eligible to undertake
all scale of telecommunications infrastructu re projects, Class 2 enterprises are eligible to
undertake telecommunications i nfrastructure projects with a co ntract value of RMB20 million or
below, and Class 3 enterprises are eligible to undertake telecommunications infrastructure
projects with a contract value of RMB5 million or below.
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--- page 103 ---
The following table sets out the leading telecommunications infrastructure construction and
maintenance services companies in the PRC by revenue in 2023:
Rank Company Company description
Company
listed
Estimated
revenues in
2023
Market
share
(RMB Billion)
1 C o m p a n yA .... T h ec o m p a n ym a i n l y engages in providing telecommunications
infrastructure construction and maintenance services.
Yes 51.4 20.8%
2 C o m p a n yB .... E s t a b l i s h e di n 2003, the company mainly engages in
telecommunications infrastructu re construction services. The
company is now a wholly-owned subsidiary of a leading
telecommunications network operator.
Yes 17.6 7.1%
3 C o m p a n yC .... T h ec o m p a n ym a i n l yf o c u s e so np r o v i d i n gt e l e c o m m u n i c a t i o n s
infrastructure construction and maintenance services.
Yes 3.9 1.6%
4 C o m p a n yD .... T h ec o m p a n ym a i n l ym a n u f a c t u r e st e l e c o m m u n i c a t i o n se q u i p m e n ta n d
engages in telecommunications infrastructure construction and
maintenance services.
Yes 3.3 1.3%
5 C o m p a n yE .... T h ec o m p a n ym a i n l y engages in telecommunications infrastructure
construction and maintenance services.
Yes 2.1 0.9%
Others 168.4 68.3%
Total 246.7 100.0%
Notes:
1. The revenue refers to the telecommunications infrastructure services provided to the Big Three and the world ’s
largest telecommunications tower infrastructure se rvice provider.
2. The revenue figures refer to revenue generated by offer ing telecommunications infr astructure construction and
maintenance services. Thus, the revenue figures shown above are different from the figures disclosed in the
respective companies ’ annual report.
3. Percentage/figure may not add up to 100%/amount due to rounding.
Source: Annual reports of listed com panies; Ipsos research and analysis
In 2023, there were approximately 246 companies certified with Class 1, Class 2, or Class
3 qualifications that had won at least one telecommunications infrastructure project in Jiangxi
Province. Among these companies, approximately 12 active players certified with Class 1
qualification had secured construction and maintenance projects in Jiangxi Province with an
aggregate contract value of more than appr oximately RMB20 million in 2022 and 2023.
Additionally, approximately 5 active players certified with Class 1 qualification had secured
construction and maintenance projects in Jiangxi Province with an aggregate contract value of
more than approximately RMB 50 million in 2022 and 2023.
INDUSTRY OVERVIEW
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--- page 104 ---
The following table sets out the leading telecommunications infrastructure construction and
maintenance services companies in Jiangxi Province by revenue in 2023. The Group ranked the
third with revenue of RMB209.1 million derived fr om the T elecommunications Infrastructure
Services business segment for projects located in Jiangxi Province in 2023, representing a
market share of 3.1%.
Rank Company Company description
Company
listed
Estimated
revenues in
2023
Market
share
(RMB Million)
1 C o m p a n yF ..... T h ec o m p a n ym a i n l y engages in providing telecommunications
infrastructure construction and maintenance services. The company
is now a wholly-owned subsidiary of a leading telecommunications
infrastructure construction and maintenance services provider.
Yes 862.2 12.9%
2 C o m p a n yG .... E s t a b l i s h e di n 2003, the company mainly engages in
telecommunications infrastructu re construction services. The
company is now a wholly-owned subsidiary of a leading
telecommunications network operator.
Yes 801.6 11.9%
3 T h eG r o u p .... E s t a b l i s h e di n 2002, the Group focuses on the provision of
T elecommunications Infrastructure Services and Digitalisation
Solution Services in the PRC.
No 209.1 3.1%
4 C o m p a n yH .... T h ec o m p a n ym a i n l y engages in providing telecommunications
infrastructure construction and maintenance services. The company
is now a wholly-owned subsidiary of a leading telecommunications
infrastructure construction and maintenance services provider.
Yes 199.4 3.0%
5 C o m p a n yI ..... T h ec o m p a n ym a i n l y engages in providing telecommunications
network infrastructure construction services. The company is now a
wholly-owned subsidiary of a leading telecommunications
infrastructure construction and maintenance services provider.
Yes 170.3 2.5%
O t h e r s ........ 4,466.6 66.6%
Total 6,709.2 100.0%
Notes:
1. The revenue refers to the telecommunications infrastructure services provided to the Big Three and the world ’s
largest telecommunications tower infrastructure se rvice provider.
2. The revenue figures refer to revenue generated by offer ing telecommunications infr astructure construction and
maintenance services. Thus, the revenue figures shown above are different from the figures disclosed in the
respective companies ’ annual report.
3. Percentage/figure may not add up to 100%/amount due to rounding.
Source: Ipsos research and analysis
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Factors of competition
 Proven track record of projects : Past project experience proves how a company can
manage and execute the project under different scenarios in different geographical
locations. Companies are required to list their project experiences in the designated
provinces in the tender documents to demonstrate capabilities to manage projects in
specific provinces. During the bid evaluation process for major telecom infrastructure
construction projects offered by the Big Three, the past performance of
telecommunications infrastructure services providers plays a crucial role. It accounts
for 20% of the score used to evaluate the bids. This assessment is based on the
telecommunications infrastructure services providers ’ track record and performance in
previous projects, underscoring the importance of a strong and proven history in
successfully securing contracts.
Market drivers and opportunities
 Urbanisation and rural development : Urbanisation helps to spur growth and demand
for telecommunications infrastructure, as the number of potential users would increase
over time. The national policy such as the 14th Five-year Plan Information and
Communication Industry Development Plan （ ‘‘十四五’’信息通信行業發展規劃 ） and
provincial policies such as Notice on Advancing the Systematic Development of New
Information Infrastructure in Jiangxi Province （ 關於推進新型信息基礎設施體系化發展的
通知 ）set a roadmap for the penetration of 5G network as well as 1,000M FTTH in
urban and rural areas in the PRC and Jiangxi Province.
 5G application and 5G Industrial Internet of Things (IIoT) : The national policy has
planned to develop new digital infrastructures with the integration of 5G, AI, IoT , cloud
computing and big data, turning the traditional industry into an entire digitalised
economy. The telecommunications network operators work closely with large and
small enterprises to launch pilot IIoT cases in different industries, particularly in digital
industrial management. As the close partnership working with telecommunications
network operators, telecommunications infrastructure services providers can take part
in IIoT projects, including projects that request the infrastructures construction.
Entry barriers
 High capital requirements : The execution of an infrastructure construction project
typically involves significant amounts of resources and costs, including the machinery,
tools, equipment and workforce necessary for the successful completion of a project.
In addition, customers will typically pay after the work has been verified for quality.
Companies must maintain a strong cash flow and financing capacity to maintain
liquidity of business operations because the customer payment cycle could be long.
Besides operating cash flow, new entrants must meet the net assets pre-requisite to
qualify for the licenses. For example, the net asset capital requirement for the first tier
Communications Project Implementation General Contracting Enterprises Qualification
（ 通信工程總承包一級資質 ）is RMB80 million.
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--- page 106 ---
 Track record of past project experience : The lack of sufficient past project
experience is a barrier to new entrants since past project experience is one of the
key bidding evaluation criteria to demonstrate a company ’s capability to complete a
project of a similar type. Existing players in the industry have accumulated a high
number of successful projects w ith excellent proven records.
 License : Licenses are the prerequisites for a company to participate in the project
bidding from the Big Three. It is challenging for new entrants to meet all licensing
requirements, as licensing is strictly controlled by responding departments under the
evaluation of the business operation, technology standard, net asset, and past project
experience.
Threats and challenges
 Increasing labour cost : The average annual wage of the workers in the
telecommunications infrastructure services industry in the PRC grew from
approximately RMB65,063.9 in 2019 to approximately RMB81,478.3 in 2023, at a
CAGR of approximately 5.8%. The upward trend reflects the continuous demand for a
skilled labour force, especially in some provinces that are short of labour, resulting in
a lower profitability of telecommunicati ons infrastructure services providers.
 The potential reduction of expenditure on 5G infrastructure : The Big Three may
slow down investments in 5G base stations after achieving a high penetration of 5G
network and shift the investments to 5G applications and development of digital
economy. For example, China Mobile expects total capital expenditure of RMB183.2
billion in 2023, of which 5G-related capital expenditure will be approximately RMB83.0
billion.
OVERVIEW OF DIGITALISATION SOLUTION SERVICES INDUSTRY IN THE PRC AND
JIANGXI PROVINCE
The PRC government has been actively promoting the development of smart cities in the
recent decade. In 2012, the Ministry of Housing and Urban-Rural Development issued the
Interim Management Measures Management Guideline for Pilot National Smart City （ 國家智慧城
市試點暫行管理辦法 ）to encourage the development of the smart cities. T ogether with the
Guideline for Healthy Development of Smart Cities （ 關於促進智慧城市健康發展的指導意見 ）
issued by the National Development and Reform Commission (NDRC) in 2014. Smart city is
defined as the use of data and technology in upgrading infrastructure that brings more efficient
life to people.
Digitalisation solution services refer to the turnkey solution from planning, developing,
installing, and optimising the hardware and software that integrates physical infrastructure,
information infrastructure, social infrastructu re, and commercial infrastructure, encompassing an
area ’s population, transportation assets, ener gy resources, commercial activity, and
communications. This involves the application of tra ditional technologies including digitalisation,
information and communication technology (ICT) to design system that connects different
infrastructures for collection of data and operation of infrastructure, as well as the use of
advanced technologies such as the Internet of Things (IoT), cloud computing, and Artificial
Intelligence (AI) for real-time da ta collection, real-time incident response, rapid analytics and
automated decision making.
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The concept of digitalisation solution ser vices refers to an integration of physical
infrastructure, information infr astructure, social infrastructur e, and commercial infrastructure,
encompassing an area ’s population, transportation assets, energy resources, commercial
activity, and communications with the use of inf ormation and communica tion technology (ICT)
as well as the advanced technologies such as the Internet of Things (IoT), cloud computing, and
Artificial Intelligence (AI) for decision making optimisation. Digitalisation applications can
generally be categorised into the following scenarios:
Industry vertical digitalisation
applications Examples
Digital urban management . . . . Digital city gov ernance, digital public facilities management,
automated energy control, t raffic management, etc.
Digital industrial management . . Automated manufacturing, predictive maintenance and AI
robotics, etc.
Digital healthcare . . . . . . . . . . . Digital appointment, electronic health record, digitalisation in
hospitals, AI diagnosis and remote diagnosis, etc.
Digital government . . . . . . . . . . Digital appointments of public services, digital payment, and
digitalisation of administration process, etc.
Digital grain depot . . . . . . . . . . Unattended monitoring of grain depot including energy
management, environmental controls and security systems
etc.
Digital education . . . . . . . . . . . Remote learning, machine learning-powered personalised
learning, classroom management, school safety
management
Digital management . . . . . . . . . Digital staff management, digital and automated supply
chain management, advanced operation analytics and
management
Digital surveillance . . . . . . . . . . Surveillance system with advanced analytics for crime
prevention, accident prevention and traffic management, etc.
Digital finance . . . . . . . . . . . . . Cloud-based audit, digital banking, fraud detection with big
data analytics, customer services with AI chatbot, insurance
underwriting with machine learning, etc.
Digital telecommunications
c o n s t r u c t i o n ...............
Digital procurement, supply chain management, digital
project and budget management, equipment damage
detection, etc.
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AI technology in digitalisation solution services
AI technology can be broadly categorised into ‘‘discriminative AI ’’ and ‘‘generative AI ’’.
Discriminative AI is a type of AI model which mainly focuses on data classification and statistical
analysis based on given parameters or examples. Generative AI is a more advanced form of AI
model which is to create new data and content that the model has been trained on, and provide
a window into the intricate structures within the data, allowing for creative data generation and
synthesis.
Discriminative AI models are widely adopted in digitalisation solutions and used in tasks
such as image recognition, language processing, fraud detection, automation, prediction and
recommendation systems. As opposed to the advanced forms of AI (such as generative AI),
discriminative AI is a more basic form of AI which simply analyses the patterns or features in the
input data with relatively hig her reliability and accuracy.
Value chain
The industry value chain for the digitalisation solution services industry in the PRC and
Jiangxi Province typically consists of hardware manufacturers, solution services providers and
end-users.
Value chain of the digitalisat ion solution services industry
Hardware
manufacturers
Solution services provider End-users
Upstream Mid-stream Downstream
Sensors
Public
Industry verticals
enterprise software solution provider
IoT solution provider
AI solution provider
Cloud services provider
Telecommunications network provider
System integration
services provider
Private
Hard disk
Network
 transmission device
Cables (data
transmission)
Source: Ipsos research and analysis
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Digitalisation solution services providers provide turnkey solutions for clients by integrating
hardware and software solution. The process involves site planning, customised software
system design, hardware and software installati on, solution system testing and maintenance.
Solution services providers are further categorised according to the core capability of the
services providers:
 Industry verticals enterprise software solution providers provide industry-specific
digital solutions to assist end users in managing different management issues such
as information management, data analysis and customer services.
 IoT solution providers develop the solution platform that connects the devices with
other devices and systems for the exchange of data and remote control. Similar to AI
solution providers, IoT solution providers develop industry specific digitalisation
applications.
 AI solution providers adopt deep learning frameworks to simulate human thought and
develop solutions for different industry verticals to assist and optimise decision-
making.
 Cloud services providers provide the digital storage and analysis system for data.
Cloud technology enables convenient, on-demand network access to a shared pool of
configurable computing resources, such as networks, servers, storage, applications,
and services.
 T elecommunications network provider refers to the Big Three that provides
telecommunications network service s to support data transmission.
 System integration services providers provide digitalisation turnkey solutions without
owning any proprietary solutions, cloud ser vices and telecommuni cations. Often they
are commissioned or subcontracted by other solution services providers to implement
the solution. Their main solutions include site planning, designing a customised
software architecture or application, installing of hardware and software, and testing
and optimising the systems.
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The market value of the digitalisation solut ion services industry in the PRC and Jiangxi
Province
The following chart sets out the market value of the digitalisation solution services industry
in the PRC:
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
2028F2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F
RMB Billion
Market value of the digitalisation solution services industry in the PRC
2019 to 2028F
CAGR 24-28: 9.0%CAGR 19-23: 12.1%
2,351.9 2,640.5
3,026.5
3,351.0
3,709.3
4,063.0
4,421.1
4,820.5
5,729.4
5,255.3
Notes: The above market value includes digitalisation solution s ervices of digital urban management, digital industrial
management, digital healthcare, digital government, digi tal grain depot, digital management, digital surveillance,
digital finance, digital telecommunications construction and digital education
Sources: Ipsos research and analysis
The market value of the digitalisation solution services industry in the PRC grew from
approximately RMB2,351.9 billion in 2019 to approximately RMB3,709.3 billion in 2023, at a
CAGR of approximately 12.1%. Various urban infrastructure digitalisation projects have been
launched for city governance, for example, the ‘‘Safe and Smart Community ’’ project in Wuhan,
leveraged IoT and AI technology to collect real-time data on access control systems, and water
pressure, etc., to automate and a ctively control security in the community. The market value of
the digitalisation industry in the PRC is estimated to grow from approximately RMB4,063.0
billion in 2024 to approximately RMB5,729.4 bil lion in 2028, at a CAGR of approximately 9.0%.
The 14th Five-year Plan for National Informatisation （ ‘‘十四五’’國家信息化規劃 ） aims to
accelerate the development of city infrastructure digitalisation applications such as public
transport, healthcare, and education by 2025.
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The following chart sets out the market value of the digitalisation solution services industry
in Jiangxi Province:
61.8 68.6
78.7
86.4
96.1
104.0
114.0
123.9
136.7
0.0
60.0
100.0
140.0
120.0
80.0
40.0
20.0
160.0RMB Billion
Market value of the digitalisation solution services industry in Jiangxi Province
2019 to 2028F
CAGR 24-28: 9.7%CAGR 19-23: 11.7% 150.8
2028F2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F
Notes: The above market value includes digitalisation solutio n services of digital urban management, digital industrial
management, digital healthcare, digital government, digital grain depot, digital management, digital
surveillance, digital finance, digital telecomm unications construction and digital education
Sources: Ipsos research and analysis
The digitalisation solution services industry in Jiangxi Province has experienced significant
g r o w t h ,w i t hi t sm a r k e tv a l u ei n c r e a s i n gf r o ma p p r o x i m a t e l yR M B 6 1 . 8b i l l i o ni n2 0 1 9t o
approximately RMB96.1 billion in 2023, representing a CAGR of approximately 11.7%. It is
expected that the market will continue to expa nd from approximately RMB104.0 billion in 2024
to approximately RMB150.8 billion in 2028, at a CAGR of approximately 9.7%. T o drive the
development of the digital economy, Jiangxi Province has issued the Three-Year Digital
Economy Development Plan (2020-2022) （ 數字經濟發展三年行動計劃（ 2020-2022 年 ））.T h i s
policy emphasises the enhancement of Jiangxi Province ’s position as a digital economy hub.
The provincial government has actively sought to attract technology talents who can contribute
to the advancement of industrial digitalisation in Jiangxi Province. Furthermore, the integration
of government and company surveillance data i s encouraged, with the aim of establishing a
comprehensive data platform in the province. IoT plays a crucial role in digitalisation, and the
development plan set to accelerate the loT application on urban management, industrial
management and tourism. Investments have been directed towards promoting AI products and
supporting Nanchang as the primary city for the IoT industry. These factors collectively
contribute to the growth of the digitalisation solution services industry in Jiangxi Province.
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COMPETITIVE ANALYSIS OF THE DIGITALISATION SOLUTION SERVICES INDUSTRY IN
THE PRC AND JIANGXI PROVINCE
Industry structure
It is estimated that there are more than 21,500 digitalisation solution services providers in
the PRC. It is estimated that the Group ’s market share in the digitalisation solution services
industry in Jiangxi Province in 2023 is approximately 0.11% and in the PRC is approximately
0.003%. The Group ’s market share in the digitalisation solution services industry in both the
PRC and Jiangxi Province is comparatively insignificant. Considering the emerging demand of
digitalisation for smart cities development in the PRC, a growing number of upstream companies
tend to diversify their revenue by offering turnkey services on top of provision of hardware. The
industry is also highly fragmented, with top players dominating in different provinces. Companies
have their geographical focus, which they diversify their business in various provinces to provide
localised aftersales services.
Key factors of competition
R&D capability with constant innovation : The market demand for digitalisation solution
services has been rising. Companies in the digitalisation solution services industry differentiate
themselves from competitors in the following two ways. Industry players must recruit and retain
technical talents capable of innovating and developing new digitalisation solutions that meet
evolving needs of end-users. In addition, as technology in the digitalisation solution industry is
constantly evolving, industry players need to keep track of the latest trends and developments of
advanced technologies and adopt them quickly to stand out from competitors.
Value-added services: On top of providing innovative so lutions, value-added services
such as maintenance and technical support services, and 24/7 after-sales support services can
be decisive factors for end-users in the selection of digitalisation solutions providers. For
instance, companies that can offer immediate support to fix malfunctioning solutions or software
bugs would prevent the loss of important end-users information. Such value-added services
would increase customers ’ loyalty to the company.
Key drivers and opportunities
Growing urbanisation rate: The PRC government implemented urbanisation policies
which created a great initiative for digitalisat ion solution providers to expand their businesses
and fostered the growth of the digitalisation solution services industry. In 2022, The NDRC
issued the Key T asks in New style Urbanisation and Integrated Urban rural Development （ 新型城
鎮化和城鄉融合發展重點任務 ）to drive the expansion of digitalised infrastructure into rural areas.
Policies on smart city development: The China ’s 14th Five-Year Plan (2021-2025) （ ‘‘十四
五’’規劃 （ 2021-2025 ））placed its focus on building China into a self-reliant technological
powerhouse that bolstered the development of the digitalisation solution services industry. Two
of the main goals of the 14th Five-Year Plan focus on supporting the R&D of midstream
manufacturers and the development of smart cities, smart communities and smart homes. The
plan has also put forward higher standards for digitalisation solutions. China continued its
existing 75% R&D expense deduction policy for enterprise income tax. The policy has been
beneficial for IT industries and offered a 100% expense deduction for R&D manufacturing
companies. The policies drove digitalisation solution services companies such as AI, IoT and big
data companies to increase their R&D expenses and thus innovate digitalisation solutions.
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In 2022, Jiangxi issued the 14th Five-year Digital Economy Development Plan in Jiangxi
Province（ 關於印發江西省「十四五」數字經濟發展規劃的通知 ）. The plan is set to continuously
upgrade the digital infrastructure to accelerate the digital transformation of different industries in
Jiangxi Province.
Threats and challenges
Uncertain AI accuracy: Despite recent investments put into AI development and its
applications in digitalisation solutions, industry players raise concerns about the accuracy fallacy
of AI technology. Although the accuracy rate of discriminate AI is normally 80%, AI algorithms
might not be sophisticated to the extent of ensuring 100% accuracy in identifying critical
transportation accidents or criminals. There might be underreporting risks in delivering promises
to the end-users such as the government and police. Some end-users tend to seek an optimised
accuracy of AI and currently might not have confidence in implementing AI-driven digitalisation
solutions on a full scale.
Competitions from upstream manufacturers: Given that the demand for turnkey
digitalisation solutions has been surging recently, upstream manufacturers such as Huawei
extend their operations by not only manufacturing basic hardware components but also
providing system integration and maintenance services. They aim to achieve economies of scale
and diversify their revenue stream. They might shrink the available customer base and hence
decrease the market share of existing solutions services providers.
Entry barriers
High cost of investment: Since technology is constantly evolving, high capital investment
is required for enhancing technologies, developing innovative solutions, training IT talents and
obtaining intellectual property. New entrants or start-ups need to invest a large amount of capital
to invent leading solutions so that they can compete with competitors who have gained a certain
market share in the digitalisation solution services industry.
In some of the digitalisation solution servi ces projects, system integration services
providers are also required to source and purchase the hardware equipment without advance
payment from the customers. Cash flow requirements is high for companies in the industry to
operate the business and ensure completion of the project.
Talent competition: The success of innovative digitalisation solutions highly relies on the
technical talents to conduct research and develop new solutions that meet end-users ’ needs. It
is important for these IT professionals to develop innovative solutions to meet the three to five
years product lifecycle. Not only do they need to equip with theoretical knowledge of
technologies like AI, IoT and 5G, but they also need to have gained rich working experience in
the industry. Due to the competitive remuneration and reputation of scalable industry players,
most of the top professionals devote their efforts to these existing industry players. It is
challenging for new entrants to acquire top talents and form their R&D teams in the short term.
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Our business operations are primarily conducted in the PRC and are subject to extensive
supervision and regulation of the government of the PRC. This section provides an overview of
the key laws, regulations and legislation affecting key aspects of our business.
REGULATIONS RELATING TO THE COMMUNICATION TECHNOLOGY SERVICES INDUSTRY
Pursuant to the Provisions on Supervision and Administration of Quality of Communication
Construction Projects （《通信建設工程質量監督管理規定》）promulgated by the Ministry of Industry
and Information T echnology on 17 May 2018, construction units, survey units, design units,
architectural units and supervision units of communication construction projects shall comply
with the laws and regulations and relevant requirements on engineering and construction, fulfill
their responsibilities and obligat ions in relation to the quality and be responsible for the same of
construction projects.
Pursuant to the Measures for the Administration of T elecommunications Business License
（《電信業務經營許可管理辦法》）promulgated by the Ministry of Industry and Information
T echnology on 3 July 2017, the strengthening of the management of telecommunications
business license is proposed, and relevant provisions on the application, approval and use of
telecommunications business license, regulation of business conduct, change and cancellation
of business license and supervision and inspection of business license are provided.
Pursuant to the Cybersecurity Law of the PRC （《中華人民共和國網絡安全法》）promulgated
by the Standing Committee of the National People ’s Congress on 7 November 2016, the
construction or operation of a network or provision of services through a network shall, in
accordance with the provisions of laws and administrative regulations and the mandatory
requirements of national standards, take technical measures and other necessary measures to
ensure the safe and stable operation of the network, effectively respond to network security
incidents, prevent network illegal and criminal activ ities, and maintain the inte grity, confidentiality
and availability of network data.
Pursuant to the Regulations on the Management of Qualification for Construction
Enterprises（《建築業企業資質管理規定》）promulgated by the Ministry of Housing and Urban-
Rural Development on 22 January 2015 and amended on 13 September 2016 and 22 December
2018 the competent department of housing and urban-rural development under the State
Council is responsible for the overall supervision and management of qualification for
construction enterprise at state level, and an enterprise shall apply for such qualification in
accordance with the conditions of its assets, principal personnel, performance of completed
projects and technical equipment. After passing the examination and obtaining the qualification
certificate of a construction enterprise, the en terprise may engage in construction activities
within the scope as permitted under the qualification.
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Pursuant to the Measures for the Management of Bidding and T endering of Communication
Engineering Construction Projects （ 通信工程建設項目招標投標管理辦法》）promulgated by the
Ministry of Industry and Information T echnology on 4 May 2014, the measures regulate the
bidding and tendering activities of communication engineering construction projects in the PRC
are provided, the electronic bidding and tendering of communication engineering construction
projects in accordance with the Electronic Bidding Measures （《電子招投 標辦法》）are
encouraged, and the Information Platform for the Administration of Bidding and T endering of
Communication Engineering Projects is established by the Ministry of Industry and Information
T echnology to implement the informatisation man agement of bidding and tendering activities of
communication engineerin g construction projects.
Pursuant to the Measures for Supervision and Administration of T elecommunications
Network Operation （《電信網絡運行監督管理辦法》）promulgated by the Ministry of Industry and
Information T echnology on 24 April 2009, the enhancement of supervision and administration
over telecommunications network operation is proposed, so as to ensure stable and reliable
operation of telecommunications network.
Pursuant to the Measures for the Management of T elecommunications Construction （《電信
建設管理辦法》）promulgated by the former Ministry of Information Industry and the National
Development and Planning Commission on January 4, 2002, it is proposed to strengthen the
overall planning and industry management of telecommunications construction, and promote the
healthy and orderly development of the telecommunications industry, which applies to the new
construction, reconstruction and expansion of public telecommunications networks, private
telecommunications networks and radio and television transmission networks within China.
Pursuant to the Administrative Regulations on T elecommunications of the PRC （《中華人民
共和國電信條例》）promulgated by the State Council on 25 September 2000 and amended on 29
July 2014 and 6 February 2016 respectively, it is proposed to regulate the order of the
telecommunications market, safeguard the legitimate rights and interests of telecommunications
users and telecommunications business operators, ensure the security of telecommunications
networks and information, and promote the healthy development of the telecommunications
industry.
REGULATIONS RELATING TO FOREIGN INVESTMENT
The investment activities of foreign investors in the PRC are mainly regulated by the
Catalogue of Industries to Encourage Foreign Investment (2022 Version) （《鼓勵外商投資產業目錄
（ 2022 年版 ）》）issued by the Ministry of Commerce and the NDRC on 27 December 2020 and
become effective on 27 January 2021, and the Special Administrative Measures for Foreign
Investment Entry (Negative List) (2021 Version) （《外商投資准入特別管理措施（ 負面清單 ）（ 2021 年
版 ）》）issued on 27 December 2021 and become effective on 1 January 2022. Industries not
included in the Catalogue and the Negative List are generally open to foreign investment, unless
explicitly restricted by other Chinese laws and regulations. Pursuant to the Catalogue and the
Negative List, the communication technology services sector is generally open to foreign
investment.
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REGULATIONS RELATING TO FOREIGN EXCHANGE AND OFFSHORE INVESTMENTS
Foreign Exchange
The Administrative Regulations on the Management of Foreign Exchange of the PRC （《中
華人民共和國外匯管理條例》）is the major regulation governing foreign exchange in China, which
was promulgated by the State Council on 29 January 1996 and amended on 14 January 1997
and 5 August 2008, respectively. Under these regulations, payments for regular items (e.g. profit
distribution, interest payments and trade and service-related foreign exchange transactions) may
be made in foreign currency without the prior approval of the State Administration of Foreign
Exchange ( ‘‘SAFE ’’), subject to certain procedural requirements. Foreign institutions and foreign
individuals who make direct investments in the country should register with the foreign exchange
authorities after obtaining approval from the relevant authorities.
SAFE promulgated the Notice of State Administration of Foreign Exchange on Further
Improvement and Adjustment of Foreign Exchange Management Policies for Direct Investment ’’
(SAFE Circular No. 59) （《國家外匯管理局關於進一步改進和調整直接投資外匯管理政策的通知》（ 國
家外匯管理局59號文 ））on 19 November 2012 and amended on May 2015. Pursuant to this
circular, the opening of various special purpose foreign exchange accounts (e.g. upfront fee
account, foreign exchange capital account and margin account), reinvestment of RMB fund by
foreign investors in China and remittance of foreign exchange profits and dividends by foreign
enterprises to foreign shareholders are no longer subject to approval or verification by SAFE,
and the same entity can open multiple capital accounts in different provinces. SAFE
promulgated the Regulations on Foreign Exchange Administration of Onshore Direct Investment
by Foreign Investors on 10 May 2013, amended on 10 October 2018, 30 December 2019
respectively, specifying that SAFE or its local branches shall manage foreign investors ’ direct
investment in China through registration, and that banks shall handle foreign exchange
operations for direct investment in China based on the registration information provided by
SAFE or its branches.
Pursuant to the Notice of the State Administration of Foreign Exchange on Further
Simplifying and Improving Foreign Exchange Management Policies for Direct Investment (SAFE
Circular No. 13) （《國家
外匯管理局關於進一步簡化和改進直接投資外匯管理政策的通知》（ 國家外匯
管理局13號文 ））issued by SAFE on 13 February 2015, revised on 30 December 2019, foreign
exchange registration under domestic direct investment and foreign exchange registration under
overseas direct investment shall be directly examined and processed by banks in accordance
with the SAFE Circular No. 13 and its appendix, Operational Guidelines for Foreign Exchange
Business of Direct Investment, and SAFE and its branches shall exercise indirect supervision
over the foreign exchange registration of direct investments through the above-mentioned
banks.
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Pursuant to Notice of the State Administra tion of Foreign Exchange on Reforming the
Management of Foreign Exchange Capital Settlement for Foreign Invested Enterprises (SAFE
Circular No. 19) （《國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知》（ 國家外
匯管理局19號文 ））issued by SAFE on 30 March 2015, revised on 30 December 2019, 23 March
2023 respectively, foreign invested enterprises may settle foreign exchange capital funds at will
pursuant to their actual business needs. Foreign -invested enterprises shall not use the foreign
exchange capital funds settled in RMB for (1) expenditure outside the scope of business of
foreign-invested enterprises or prohibited by laws and regulations; (2) direct or indirect use for
securities investment; (3) granting entrusted loans or repaying inter-enterprise loans; (4)
purchasing real estate for non-self use (except for real estate enterprises).
On 9 June 2016, SAFE issued the Notice of State Administration of Foreign Exchange on
Reforming and Standardising the Management Policy of Settlement of Capital Items (SAFE
Circular No. 16) （《國家外匯管理局關於改革和規範資本項目結匯管理政策的通知》（ 國家外匯管理局
16號文 ））, which reiterates some of the rules contained in SAFE Circular 19. SAFE No. 16
provides that willful remittance is applicable to foreign exchange capital, foreign debt funds and
funds repatriated from overseas listings, and that the RMB funds derived from the relevant
remittance can be used to grant loans to related parties or repay inter-enterprise loans
(including advances to third parties). However, there remains significant uncertainty in practice
as to the interpretation and implementation of SAFE Circular 16.
Overseas Investments
Pursuant to the Notice of the State Administration of Foreign Exchange on Relevant Issues
concerning Foreign Exchange Administration of the Overseas Investment and Financing and
Round-trip Investments by Domestic Residents through Special Purpose Vehicles promulgated
by SAFE on 4 July 2014 (SAFE Circular No. 37) （《關於境內居民通過特殊目的公司境外投融資及返
程投資外匯管理有關問題的通知》（ 國家外匯管理局37號文 ））, domestic residents are required to
register with the local branch of SAFE in respect of their overseas investment and financing for
the purpose of directly established or indirectly controlled overseas enterprises (i.e. special
purpose vehicles within the meaning of SAFE Circular No. 37). SAFE Circular No. 37 further
stipulates that a special purpose vehicle shall apply for registration of changes after a change in
important matters such as capital increase or reduction by domestic individual resident, transfer
or replacement of equity interests, and merger or demerger. If the PRC shareholders holding
interests in a special purpose vehicle fail to register with SAFE as required, the PRC subsidiary
of the special purpose vehicle will be prohibited from distributing dividends to its parent
company outside of China and from conducting cross-border foreign exchange activities
thereafter, and the special purpose vehicle ’s ability to inject additional capital into its PRC
subsidiary may be restricted. In addition, failure to comply with the above SAFE registration
requirements may also result in liability under PRC law for evasion of foreign exchange
restrictions.
Pursuant to the SAFE Circular No. 13, the banks will directly examine and handle the
foreign exchange registration under overseas direct investment in accordance with SAFE
Circular No. 13 and its appendix, Operational Guidelines for Foreign Exchange Business of
Direct Investment, and SAFE and its branches will exercise indirect supervision over the foreign
exchange registration of direct investment through the above-mentioned banks.
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REGULATIONS RELATING TO INTELLECTUAL PROPERTY
Patent
Pursuant to the Patent Law of the PRC （《中華人民共和國專利法》）promulgated by the
Standing Committee of the National People ’s Congress on 12 March 1984 and amended on 4
September 1992, 25 August 2000, 27 December 2008 and 17 October 2020, respectively, and
the Implementation Rules of the Patent Law of the PRC （《中華人民共和國專利法實施細則》）
promulgated by the State Council on 15 June 2001 and amended on 28 December 2002, 9
January 2010, respectively, the State Intellectual Property Office of the PRC is responsible for
the nationwide management of patents, and the patent administration departments of provincial,
autonomous region or province-level muni cipal governments are responsible for the
management of patents within their respective administrative region. The patent system in
China adopts the first-to-file principle, i.e. if two or more applicants apply for a patent for the
same invention or creation, the patent right is granted to the first applicant. T o apply for a
patent, an invention or utility model must meet three criteria: novelty, inventiveness and
practicability. Invention patents are valid for 2 0 years, while design patents and utility model
patents are valid for ten years, from the date of application. A third-party must obtain consent or
a proper license from the patent owner to use the patent. Otherwise, the use constitutes an
infringement of the patent rights.
Trademark
Pursuant to the Trademark Law of the PRC （《中華人民共和國商標法》）promulgated by the
Standing Committee of the National People ’s Congress on 23 August 1982 and amended on 22
February 1993, 27 October 2001, 30 August 2013 and 23 April 2019 respectively, and the
Implementation Rules of the Trademark Law of t he PRC promulgated by the State Council on 10
March 1983 and amended on 3 August 2002, 29 April 2014 respectively, the Trademark Office
under the State Administration for Industry and Commerce is responsible for the registration of
trademarks and grants a validity period of ten years for each registered trademark. Trademark
registrants may apply for renewal of their registrations, which are valid for the following ten
years. A trademark registrant may allow another party to use its registered trademark by
entering into a trademark licence contract. The trademark licence contract is required to be filed
with the Trademark Office. As far as trademarks are concerned, Chinese trademark law adopts
the first-to-file principle in dealing with tradema rk registrations. An application for registration of
a trademark which is identical or similar to a trademark already registered, or preliminarily
examined and approved for use by another person in respect of the same goods or services, or
similar goods or services may be rejected. Any person applying for registration of a trademark
shall not prejudice the existing prior rights of another person, nor shall he/she improperly
register a trademark which is already in use by another person, and has a certain degree of
influence.
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Copyright
Pursuant to the Copyright Law of the PRC （《中華人民共和國著作權法》）promulgated by the
Standing Committee of the National People ’s Congress on 7 September 1990 and amended on
27 October 2001, 26 February 2010 and 11 November 2020, respectively, the creations of
Chinese citizens, legal persons or unincorporated organisations, including intellectual works in
the fields of literature, art and science that are original and can be expressed in a certain form,
are entitled to copyright protection, regardless of whether they are published or not. Copyright
holders enjoy a variety of rights, including the right to publish, the right to attribute and the right
to reproduce.
Pursuant to the Regulations on the Protection of Computer Software （《計算機軟件保護條
例》）promulgated by the State Council on 4 June 1991 and amended on 20 December 2001 and
30 January 2013 respectively, Chinese citizens, legal persons or other organisations are entitled
to copyright in software developed by them in accordance with these regulations, regardless of
whether it is published or not, and may apply for registration with the software registration
agency recognised by the administrative department of copyright under the State Council.
Pursuant to the Measures for Registration of Computer Software Copyright （《計算機軟件著作權
登記辦法》）promulgated by the National Copyright Administration on 20 February 2002, the
state-level copyright administration encour ages software registrati on, and gives priority
protection to the registered software. The National Copyright Administration is in charge of the
nationwide management of software copyrig ht registration, and the National Copyright
Administration recognises the Copyright Protection Center of China as a software registration
institution.
Domain Name
Pursuant to the Internet Domain Name Administration Measures （《互聯網域名管理辦法》）
promulgated by the Ministry of Industry and Information T echnology on 24 August 2017, the
Ministry of Industry and Information T echnology shall supervise and manage the domain name
services nationwide, and the Communications Administration of each province, autonomous
region and municipality directly under the Central Government shall supervise and manage the
domain name services within its administrative region. In principle, domain name registration
services are provided on a ‘‘first-applied-first-registered ’’basis.
REGULATIONS RELATING TO E NVIRONMENTAL PROTECTION
In order to mitigate or avoid environmental pollution caused by production and operation
activities, enterprises operating in mainland China shall comply with the provisions of various
environmental protection laws and regulations. The main Chinese laws and regulations on
environmental protection include: the Law of the PRC on Environmental Protection promulgated
by the Standing Committe e of the National People ’s Congress on 26 December 1989 and
amended on 24 April 2014; the Law of the PRC on Prevention and Control of Air Pollution （《
中
華人民共和國大氣污染防治法》）which was promulgated on 5 September 1987 and amended on
29 August 1995, 29 April 2000, 29 August 2015 and 26 October 2018 respectively; the Law of
the PRC on Prevention and Control of Noise Pollution （《中華人民共和國噪聲污染防治法》）which
was promulgated on 24 December 2021; the Law of the PRC on the Prevention and Control of
Water Pollution （《中華人民共和國水污染防治法》）which was promulgated on 11 May 1984 and
amended on 15 May 1996, 28 February 2008 and 27 June 2017 respectively; and the Law of the
PRC on the Prevention and Control of Environmental Pollution by Solid Waste （ 中華人民共和國
固體廢物污染環境防治法》）which was promulgated on 30 October 1995 and amended on 29
December 2004, 29 June 2013, 7 November 2016 and 29 April 2020 respectively.
REGULATORY OVERVIEW
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REGULATIONS RELATING TO TAX
Enterprise Income Tax
The Enterprise Income T ax Law of the PRC （《中華人民共和國企業所得稅法》）promulgated
by the Standing Committee of the National People ’s Congress on 16 March 2007 and amended
on 24 February 2017 and 29 December 2018, respectively, and the Regulations on the
Implementation of the Law of the PRC on Enterprise Income T ax promulgated by the State
Council on 6 December 2007 and amended on 23 April 2019 (collectively, the ‘‘EIT Law ’’), are
the main regulations under which the enterprise income tax in China is levied. Pursuant to the
EIT Law, all resident enterprises and non-resident enterprises with an establishment or a place
of business in China, are subject to an Enterprise Income T ax Law rate of 25%, provided that
such income is derived from the establishment o r place of business in China, or such income is
derived from outside China but has a physical connection with such establishment or place of
business. Where a non-resident enterprise does not have an establishment or a place of
business in China, or where it has set up an establishment or a place of business, but the
income obtained is not effectively connected with such establishment or place of business, it is
subject to an enterprise income tax rate of 10% on the income derived from mainland China. A
resident enterprise is an enterprise established under the laws of China, or established under
the laws of a foreign country or region, but with its ‘‘de facto management body ’’in China.
Pursuant to the Announcement on Certain Is sues of Enterprise Income T ax on Indirect
Transfer of Property by Non-Resident Enterprises (SAT Announcement No. 7) （《關於非居民企業
間接轉讓財產企業所得稅若干問題的公告》（ 國家稅務總局公告第7號 ））issued by SAT on 3 February
2015 and revised in October and December 2017 respectively, where a non-resident enterprise
indirectly transfers equity interests and other property of a PRC resident enterprise through the
implementation of an arrangement that does not have a reasonable commercial purpose to
avoid its enterprise income tax obligations, such indirect transfer transaction shall be re-
characterised in accordance with the provisions of Article 47 of the Enterprise Income T ax Law,
and be recognised as a direct transfer of equity and other property of a PRC resident enterprise.
Value Added Tax
Pursuant to the Provisional Regulations of the PRC on Value Added T ax （《中
華人民共和國
增值稅暫行條例》）promulgated by the State Council on 13 December 1993 and amended on 10
November 2008, 6 February 2016 and 19 November 2017 respectively, all units and individuals
engaged in the sale of goods, the provision of processing, repair and fitting services, the sale of
services, intangible assets, real estate and the import of goods in China shall pay value added
tax in accordance with the law. Unless otherwise provided by the State Council, the value added
tax rate is 17% for the sale of goods, 11% for the sale of basic telecommunications and
construction, and 6% for the sale of services and other intangible assets.
Pursuant to the Notice on Adjustment of Value Added T ax Rates （《關於調整增值稅稅率的通
知》）issued by the Ministry of Finance and the State Administration of T axation on 4 April 2018
and effective on 1 May 2018, for taxpayers who engage in taxable sales of value added tax or
import of goods where the tax rates of 17% and 11% were previously applicable, their respective
tax rates were adjusted to 16% and 10%.
REGULATORY OVERVIEW
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Pursuant to the Announcement on Policies Relating to the Deepening of Reform of Value
Added T ax（《關於深化增值稅改革有關政策的公告》）promulgated by the Ministry of Finance, the
State Administration of T axation and the General Administration of Customs on 20 March 2019
and effective on 1 April 2019, for taxable sales of value added tax or import of goods, where the
tax rate of 16% was previously applied, the tax rate will be adjusted to 13%; and where the tax
rate of 10% was previously applied, the tax rate will be adjusted to 9%.
REGULATIONS RELATING TO LABOUR AND SOCIAL SECURITY
Labour
Pursuant to the Labour Law of the PRC （《中華人民共和國勞動法》）, the Labour Contract
Law of the PRC （《中華人民共和國勞動合同法》）and the Administrative Regulations on the
Implementation of the Labour Contract Law of the PRC （《中華人民共和國勞動合同法實施條例》）,
labour relations between employers and employees must be established in written form. The
regulations impose strict rules on the establishment of fixed-term employment contracts, the
employment of temporary workers and the dismissal of workers by employers. Pursuant to these
regulations, employers must ensure that their employees have the right to rest, and must pay
them a wage that is not lower than the local minimum wage. Employers who violate the Labour
Contract Law of the PRC and the Labour Law of the PRC are liable to fines and other
administrative liabilities, in serious cas es, criminal liabilities will be pursued.
Social Security
Major laws relating to social security include the Social Insurance Law of the PRC （《中華人
民共和國社會保
險法》）, the Administrative Regulations on Work Injury Insurance （《工傷保險條
例》）, the Interim Measures on Maternity Insurance for Enterprise Employees （《企業職工生育保險
試行辦法》）, the Provisional Regulations on the Collection and Payment of Social Insurance
Premiums（《社會保險費征繳暫行條例》）and the Regulations on the Administration of Housing
Provident Fund （ 住房公積金管理條例》）. Chinese enterprises and organisations are required to
provide welfare schemes for their employees, including pension insurance, unemployment
insurance, maternity insurance, work injury in surance and healthcare insurance, housing
provident fund and other welfare schemes.
Pursuant to the Social Insurance Law of the PRC （《中華人民共和國社會保險法》）
promulgated on 28 October 2010 and amended on 29 December 2018, the employer shall apply
to the local social insurance agency for social insurance registration within 30 days from the
date of its establishment. The employer shall also apply for social insurance registration for its
employees with the social insurance agency within 30 days from the date of employment. Any
employer who violates the above regulations will be ordered to rectify within a certain period of
time, failing which the employer and its directl y responsible persons shall be liable for a fine.
REGULATORY OVERVIEW
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On 20 July 2018, the General Office of the Central Committee of the Communist Party of
China and the General Office of the State Co uncil issued the Programme of Reform of the
National T axation and Local T axation System （ 國稅地稅征管體制改革方案》）(hereinafter referred
to as the ‘‘Reform Programme ’’). The Reform Programme advocates:
1. In accordance with the requirements of creating a new model before abandoning the
old model, and no abandonment without creation, adhering to the principles of unified
leadership, hierarchical management, overall design and step-by-step implementation,
adopting the approach of hang up the plate in the first place and then implementing
the ‘‘three determinations ’’, merging the national tax and local tax agencies and then
taking over the responsibilities of collectin g and managing social insurance premiums
and non-tax income, and reforming the provincial (autonomous regions, municipalities
directly under the central government, and cities under separate state planning,
hereinafter collectively referred to as provinces) tax bureaus first, then solidly
promoting the reform of the municipal-level (prefectures and leagues, hereinafter
collectively referred to as the municipalities) tax bureau and county-level (cities,
districts and banners, hereinafter collectively referred to as counties) tax bureau,
placing greater emphasis on the implementation of each key works and each of the
timing, so as to ensure the completion of the reform tasks by the end of 2018.
2. It is clarified that from 1 January, 2019, the basic pension insurance premiums, basic
healthcare insurance premiums, unemployment insurance premiums, work injury
insurance premiums, maternity insurance premiums and other social insurance
premiums shall be handed over to the taxation department for unified collection.
Housing Provident Fund
Pursuant to the Administrative Regulations on the Management of Housing Provident Fund
（《住房公積金管理條例》）implemented on 3 April 1999 and amended on 24 March 2002 and 24
March 2019 respectively, newly established units shall register their housing provident fund
contributions at the Housing Provident Fund Management Centre within 30 days from the date of
establishment, and then reach out to the entrus ted banks to complete the procedures for the
establishment of housing provident fund accounts for their employees. If a unit employs an
employee, it should register the contribution at the Housing Provident Fund Management Centre
within 30 days from the date of employment, and then reach out to the above-mentioned bank to
complete the procedures for sealing the housing provident fund account for the employee.
If a unit does not register for housing provident fund contributions, or does not set up
housing provident fund accounts for its employees, it shall be ordered to do so within a certain
period of time; if it fails to do so after the deadline, it shall be subject to a fine. If a unit fails to
pay or underpays its housing provident fund after the deadline, the Housing Provident Fund
Management Centre shall order a deadline for payment; if the unit still fails to pay after the
deadline, it may apply to the People ’s Court for enforcement.
REGULATORY OVERVIEW
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REGULATIONS RELATING TO OVERSEAS LISTING
Pursuant to the Trial Administrative Measures of Overseas Securities Offering and Listing
by Domestic Companies （《境內企業境外發行證券和上市管理試行辦法》）(the ‘‘CSRC New
Measures ’’) promulgated by CSRC on 17 February 2023 and effective on 31 March 2023,
overseas offerings and listings of a listing applicant must conduct and complete relevant filing
procedures with the CSRC if (1) 50% or more of its operating revenue, total profit, total assets
or net assets as recorded in its audited consolidated financial statements for the most recent
financial year is being accounted for by domestic companies; and (2) the main parts of its
business activities are conducted in the PRC, its principal places of business are located in the
Mainland China, or the senior management in charge of its business operation and management
are mostly Chinese citizens or domiciled in the PRC.
The Directors, the Sole Sponsor, and the PRC Legal Advisers are of the view that the
listing of the Company ’s Shares is subject to the filing requirements under the CSRC New
Measures based on the following reasons:
1. the Group has four subsidiaries incorporated in the PRC. In particular, for the year
ended 31 December 2022, substantially all total operating revenue, total profit, and
total assets were contributed by its PRC incorporated subsidiaries, of which Zhonggan
Communication and GLP T echnology were the largest contributors;
2. the Group, with its headquarters in Jiangxi Province of the PRC, is an integrated
service provider and software developer. Its core business operations are mainly to
provide telecommunications infrastructure services and digitalisation solution services
to customers. These businesses are predominantly conducted, managed and located
in the PRC; and
3. the executive Directors and senior management are mostly Chinese nationals, and
they, together with the senior management team, reside predominantly in the PRC.
Their close proximity to the Group ’s operations in the PRC is important as they play a
critical role in the supervision and management of the Group ’s operations. The
executive Directors and senior management team are responsible for the overall
management, corporate strategy, planning, business development and control of the
Group ’s operations.
The Company completed the submission of the relevant filing materials to CSRC in
accordance with the CSRC New Measures on 5 July 2023, which was within three working days
after the submission of the Listing Application dated 30 June 2023. According to the Statement
on Oversea Securities Offering and Listing by Domestic Companies as at 27 July 2023 (Initial
public offering and full circulation) （《境內企業境外發行證券和上市備案情況表》（ 首次公開發行及全
流通
）（ 截至2023 年7月27日 ）》）issued by CSRC, the Company ’s filing materials were accepted by
the CSRC on 20 July 2023. The filing by the Company was approved by CSRC on 2 January
2024. As advised by the PRC Legal Advisers, the Company has completed the relevant filings
for the application of the Listing and overseas offering, and no further approval from the CSRC
is required to be obtain ed before the Listing.
REGULATORY OVERVIEW
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GENERAL
Zhonggan Communication, a principal operating subsidiary of the Company, was
established in 2002 and has become a reputable integrated service provider and software
developer headquartered in Jiangxi Province of the PRC and focuses on the provision of
T elecommunications Infrastructure Services and Digitalisation Soluti on Services in the PRC. In
2017, Zhonggan Communication established another principal operating subsidiary of the
Company, namely GLP T echnology, which has be en primarily engaged in the Digitalisation
Solution Services since 2018. The Group ’s decision to enter into the Digitalisation Solution
Services business was driven by several key factors. Firstly, there was a significant and growing
demand for digitalisation solution services from governments, municipalities, and businesses.
This growing demand presented a lucrative opportunity for the Group to leverage its expertise in
and meet the evolving needs of customers. In addition, government policies and initiatives to
promote the development of smart cities created a favorable environment for the Group to
provide related services. These policies provided support and incentives, paving the way for the
Group to enter into the digitalisation solution s ervices industry. Furthermore, the Directors
recognised synergies between the Group ’s T elecommunications Infrastructure Services and the
Digitalisation Solution Services. The Group ’s technological expertise in wireless
communications, network management, and IoT connectivity could be effectively applied to
develop and deploy innovative digitalisation solu tions. This ability to leverage its knowledge and
expertise of telecommunications infrastruc ture has enabled the Group to create tailored
solutions that meet the specific needs of its customers. The Group ’s established customer base
from its T elecommunications Infrastructure Ser vices provided cross-selling opportunities. By
offering its Digitalisation Solution Services, the Group has expanded its reach and maximised
value for both segments. In addition to these driving factors, the Group sought to gain a
competitive advantage and diversify its offerings. By entering the digitalisation solution services
industry, the Group sought to differentiate itself from competitors and develop new revenue
streams. This strategic move enabled the Group to capitalise on market opportunities and drive
sustainable growth.
The Company was incorporated in the Cayman Islands under the Companies Act as an
exempted company with limited liability on 20 April 2022. As part of the Reorganisation, the
Company became the holding company of the Group for the purpose of the Listing with its
businesses conducted through its subsidiaries . See section headed ‘‘Reorganisation ’’ in this
section for further details.
HISTORY AND REORGANISATION
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MAJOR MILESTONES
Date Event
2002 . . . . . . . Zhonggan Communication, one of the Company ’s principal operating
subsidiaries, was established.
2003 . . . . . . . Customer A became the Group ’s customer.
2014 . . . . . . . The Group was recognised as Excellent Business Partner* （ 優秀合作夥伴 ）by
Customer A and continued to be recognised by Customer A as Excellent
Business Partner* （ 優秀合作夥伴 ）or Excellent Cooperation Unit* （ 優秀合作單
位 ）in 2018, 2019, 2020 and 2022.
2015 . . . . . . . Customer C became the Group ’s customer.
Zhonggan Communication was first recognised as a High and New T echnology
Enterprise*（ 高新技術企業 ）.
2016 . . . . . . . Customer D became the Group ’s customer.
2017 . . . . . . . Shares of Zhonggan Communication became quoted on NEEQ.
GLP T echnology, one of the Company ’s principal operating subsidiaries, was
established.
The Group was recognised as Best Business Partner* （ 最佳合作夥伴 ）by
Customer C.
Zhonggan Communication was inducted as a member of the China
Association of Communi cation Enterprises （ 中國通信企業協會 ）.
2018 . . . . . . . The Group began to provide Digitalisation Solution Services.
The Group was recognised as Jiangxi Province Security T echnology to Guard
Against Industry T op T en Brands Selected Online in Year 2018* （ 2018 年度江西
省安防行業網絡評選十大品牌 ）.
2019 . . . . . . . Shares of Zhonggan Communication ceased quotation from NEEQ.
Customer B became the Group ’s customer.
The Group was recognised as Nanchang High-T ech Industrial Development
Zone – Outstanding Contribution Enterprise of the Zone in Year 2018* （ 2018 年
度 南 昌 高 新 技 術 產 業 開 發 區 – 園 區 突 出 貢 獻 企 業 ）by Nanchang High-T ech
Industrial Development Zone Management Committee* （ 南昌高新技術產業開發
區管理委員會 ）and the Working Committee of Nanchang High-T ech Industrial
Development Zone of the Communist Party of China* （ 中共南昌高新技術產業開
發區工委 ）.
HISTORY AND REORGANISATION
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Date Event
2020 . . . . . . . GLP T echnology was first recognised as a High and New T echnology
Enterprise（ 高新技術企業 ）.
2021 . . . . . . . The Group was recognised as Nanchang High-T ech Industrial Development
Zone – Outstanding Contribution Enterprise of the Zone in Year 2020* （ 2020 年
度 南 昌 高 新 技 術 產 業 開 發 區 – 園 區 突 出 貢 獻 企 業 ）by Nanchang High-T ech
Industrial Development Zone Management Committee* （ 南昌高新技術產業開發
區管理委員會 ）and the Working Committee of Nanchang High-T ech Industrial
Development Zone of the Communist Party of China* （ 中共南昌高新技術產業開
發區工委 ）.
2023 . . . . . . . GLP Software qualified as a Double-soft Enterprise* （ 雙軟企業 ）.
SUBSIDIARIES
As of the Latest Practicable Date, the Company had eight directly and indirectly owned
subsidiaries and one branch office in Shanghai and the details of which (except the investment
holding companies) are set out below:
1. Zhonggan Communication
Zhonggan Communication was incorporated by Mr. Liu Haoqiong, his brother, Mr. Liu
Haopeng and Ms. T ao Xiulan as a limited liability company in the PRC on 23 May 2002 in the
name of Jiangxi Province Zhonggan Communication Engineering Co., Ltd.* （ 江西省贛通通信工程
有限公司 ）. Upon incorporation, the registered capital of Zhonggan Communication was
RMB1,000,000, of which each of Mr. Liu Haoqiong, Mr. Liu Haopeng and Ms. T ao Xiulan had
contributed RMB250,000, RMB250,000 and RM B500,000, respectively at the time of
incorporation.
Following a series of equity transfers and capital increases between September 2007 and
December 2015, the registered capital of Zhonggan Communication had increased from RMB1.0
million to RMB30.0 million, which was owned as t o 51.0% by Mr. Liu Haoqiong, and as to 49.0%
by Ms. T ao Xiulan. On 16 June 2016, Ms. T ao Xiulan entered into equity transfer agreements
with Yue Da Investment and Ying Hua Investment, respectively, pursuant to which Ms. T ao
Xiulan transferred (i) 15.0% of equity interest in Zhonggan Communication to Yue Da Investment
at a consideration of RMB11.69 million and (ii) 3.0% of equity interest in Zhonggan
Communication to Ying Hua Investment at a consideration of RMB2.33 million. The
consideration was determined based on the net asset value of Zhonggan Communication as at
31 December 2015. Upon completion of the aforesaid transfers, Zhonggan Communication was
owned as to approximately 51.0% by Mr. Liu Haoqiong, as to approximately 31.0% by Ms. T ao
Xiulan, as to approximately 15.0% by Yue Da Investment and as to approximately 3.0% by Ying
Hua Investment. Yue Da Investment was an Independent Third Party. Ying Hua Investment was
an employee shareholding platform at that time. Since July 2020, Ying Hua Investment has been
held as to approximately 97.14% by Mr. Wang Jian （ 王戬 ）and as to remaining approximately
2.86% by Mr. Liu Lu （ 劉鹿 ）, both Independent Third Parties, and is currently an Independent
Third Party.
HISTORY AND REORGANISATION
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Conversion to joint stock company
On 3 August 2016, in anticipation of the listing of its shares on the NEEQ, the then
equity holders of Zhonggan Communication unanimously resolved to convert Zhonggan
Communication into a joint stock company. Upon completion of the conversion on 25
August 2016, the share capit al of Zhonggan Commu nication was RMB30.0 million divided
into 30,000,000 shares of RMB1.00 each, of which Mr. Liu Haoqiong, Ms. T ao Xiulan, Yue
Da Investment and Ying Hua Investment held 15,300,000 shares, 9,300,000 shares,
4,500,000 shares and 900,000 shares, representing approximately 51.0%, 31.0%, 15.0%
and 3.0% of the share capital of Zhonggan Communication, respectively. On the same
date, Zhonggan Communication changed its name to Jiangxi Gantong Communication Co.,
Ltd.*（ 江西贛通通信股份有限公司 ）.
L i s t i n go fs h a r e so nN E E Q
On 25 January 2017, all issued shares of Zhonggan Communication were listed and
quoted for trading on NEEQ (delisted, previous stock code: 870720). Following the listing
and quoted for trading of the shares of Zhonggan Communication on NEEQ, in order to
introduce market makers in preparation for the change of trading mechanism from transfer
by agreement to market making and due to the transferors ’ own capital needs, a series of
share transfers took place between October and November 2017. After such transfers, the
then shareholders of Zhonggan Communication were as follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 1 5 , 2 9 8 , 0 0 0 5 1 . 0
M s .T a oX i u l a n .............................. 8 , 7 0 2 , 0 0 0 2 9 . 0
Y u eD aI n v e s t m e n t ........................... 4 , 5 0 0 , 0 0 0 1 5 . 0
Y i n gH u aI n v e s t m e n t ......................... 7 0 0 , 0 0 0 2 . 3
Bank of China International Securities Co., Ltd.*
（ 中銀國際證券股份有限公司 ）
(‘‘BOC International Securities ’’)(Note) ........... 4 0 0 , 0 0 0 1 . 3
Nanjing Securities Co., Ltd.*
（ 南京證券股份有限公司 ）(‘‘Nanjing Securities ’’)(Note) . . 200,000 0.7
Zhongshan Securities Co., Ltd.*
（ 中山證券有限責任公司 ）
(‘‘Zhongshan Securities ’’) (Note) ................ 2 0 0 , 0 0 0 0 . 7
Total ..................................... 3 0 , 0 0 0 , 0 0 0 1 0 0 . 0
Note: Each of BOC International Securities, Nanjing Sec urities and Zhongshan Securities is a market maker and
an Independent Third Party.
HISTORY AND REORGANISATION
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Increase of registered capital
On 10 May 2018, the then shareholders of Zhonggan Communication resolved for
Zhonggan Communication to issue (i) 5.10 bonus shares for every 10 existing shares held
by a shareholder to capitalise the undistrib uted profits of RMB15,478,597.80 as of 31
December 2017, and (ii) 1.57 bonus shares for every 10 existing shares held by a
shareholder by way of conversion of capital reserve of RMB14,085,198.89 as of 31
December 2017. As a result, the registered capital of Zhonggan Communication increased
from RMB30,000,000 to RMB50,010,000 and the number of shares held by the
shareholders of Zhonggan Communication increased on a pro rata basis upon completion
of such bonus issue.
As at 30 May 2018, the then shareholders of Zhonggan Communication were as
follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 2 5 , 5 0 1 , 7 6 6 5 1 . 0
M s .T a oX i u l a n .............................. 1 4 , 5 0 6 , 2 3 4 2 9 . 0
Y u eD aI n v e s t m e n t ........................... 7 , 5 0 1 , 5 0 0 1 5 . 0
Y i n gH u aI n v e s t m e n t ......................... 1 , 1 6 6 , 9 0 0 2 . 3
B O CI n t e r n a t i o n a lS e c u r i t i e s .................... 6 6 6 , 8 0 0 1 . 3
N a n j i n gS e c u r i t i e s ........................... 3 3 3 , 4 0 0 0 . 7
Z h o n g s h a nS e c u r i t i e s ......................... 3 3 3 , 4 0 0 0 . 7
Total ..................................... 5 0 , 0 1 0 , 0 0 0 1 0 0 . 0
HISTORY AND REORGANISATION
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Change of trading mechanism to market making
On 29 November 2018, the trading mechanism of the Zhonggan Communication ’s
shares was changed from transfer by agreement to market making, with the market makers
being Nanjing Securities and BOC International Securities. Zhonggan Communication
subsequently underwent a series of share transfers from November 2018 to May 2019. As
at 20 May 2019, the shareholding structure of Zhonggan Communication was as follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 2 5 , 5 0 4 , 7 6 6 5 1 . 0
M s .T a oX i u l a n .............................. 1 3 , 9 7 5 , 6 3 4 2 7 . 9
Y u eD aI n v e s t m e n t ........................... 7 , 5 0 1 , 5 0 0 1 5 . 0
B O CI n t e r n a t i o n a lS e c u r i t i e s .................... 1 , 4 6 3 , 8 0 0 2 . 9
Y i n gH u aI n v e s t m e n t ......................... 1 , 1 6 8 , 9 0 0 2 . 3
N a n j i n gS e c u r i t i e s ........................... 3 3 3 , 4 0 0 0 . 7
Mr. Xu Xingxiang （ 徐興祥 ）(‘‘Mr. Xu ’’)
(Note) ........... 6 0 , 0 0 0 0 . 1
Chen Xiaori （ 陳曉日 ）(‘‘Chen ’’) (Note) ............. 1 , 0 0 0 0 . 0
Xiamen Dingsheng Zhicheng Enterprise Management
Co., Ltd. * （ 廈門鼎盛至誠企業管理有限公司 ）(‘‘Xiamen
Dingsheng ’’) (Note) .......................... 1 , 0 0 0 0 . 0
Total ..................................... 5 0 , 0 1 0 , 0 0 0 1 0 0 . 0
Note: Each of Mr. Xu, Chen and Xiamen Dingsheng is an Independent Third Party.
HISTORY AND REORGANISATION
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--- page 130 ---
Further increase of registered capital
On 21 June 2019, the then shareholders of Zhonggan Communication resolved for
Zhonggan Communication to issue (i) 2.80 bonus shares for every 10 existing shares held
by a shareholder to capitalise the undistrib uted profits of RMB14,497,757.81 as of 31
December 2018, and (ii) 1.80 bonus shares for every 10 existing shares held by a
shareholder by way of conversion of capital reserve of RMB9,375,198.89 as of 31
December 2018. As a result, on 21 June 2019, the then shareholders of Zhonggan
Communication further resolved to increase the registered capital of Zhonggan
Communication from RMB50,010,000 to RMB73,014,600 and the number of shares held
by the shareholders of Zhonggan Communication was increased on a pro rata basis upon
completion of such bonus issue. A series of transfers then took place during June 2019
and the shareholding structure of Zhonggan Communication as at 21 June 2019 was as
follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 3 7 , 2 3 6 , 9 5 9 5 1 . 0
M s .T a oX i u l a n .............................. 2 2 , 2 6 0 , 4 2 5 3 0 . 5
Y u eD aI n v e s t m e n t ........................... 1 0 , 9 5 2 , 1 9 0 1 5 . 0
Y i n gH u aI n v e s t m e n t ......................... 1 , 7 0 6 , 5 9 4 2 . 3
Sunny Hanmy
(Note) ........................... 7 2 9 , 0 0 0 1 . 0
Mr. Xu (Note) ................................ 8 7 , 6 0 0 0 . 1
B O CI n t e r n a t i o n a lS e c u r i t i e s .................... 3 0 , 6 0 8 0 . 0
N a n j i n gS e c u r i t i e s ........................... 1 0 , 2 2 4 0 . 0
Shenzhen Beiwosi Investment Co., Ltd.*
（ 深圳貝沃思投資有限公司 ）(‘‘SZ Beiwosi ’’)(Note) ...... 1 , 0 0 0 0 . 0
Total ..................................... 7 3 , 0 1 4 , 6 0 0 1 0 0 . 0
Note: Each of Sunny Hanmy, Mr. Xu and SZ Beiwosi was an Independent Third Party.
Transfers of shares of Zhonggan Communication following the NEEQ Listing
Withdrawal
At an extraordinary general meeting of Zhonggan Communication held on 21 June
2019, the NEEQ Listing Withdrawal was approved by the majority shareholders. As part of
the arrangements for the NEEQ Listing Withdrawal, on 24 June 2019, Ms. T ao Xiulan had
undertaken to purchase such number of shares of Zhonggan Communication at such prices
from the then minority shareholders of Zhonggan Communication, so that those
shareholders could realise their investments in Zhonggan Communication after the NEEQ
Listing Withdrawal without incurring any loss as compared with their investment cost. On 9
August 2019, the NEEQ Listing Withdrawal became effective. For details, please refer to
paragraphs headed ‘‘Listing on NEEQ and NEEQ Listing Withdrawal ’’in this section.
HISTORY AND REORGANISATION
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--- page 131 ---
Such undertakings resulted in various transfers of the shares of Zhonggan
Communication which took place between June to August 2019, pursuant to which Ms.
T ao Xiulan entered into separate share transfer agreements with each of Mr. Xu, BOC
International Securities, Nanjing Securities and SZ Beiwosi and purchased 87,600 shares
from Mr. Xu at RMB2.86 per share, 30,608 shares from BOC International Securities at
RMB2.02 per share, 10,224 shares from Nanjing Securities at RMB2.03 per share, and
1,000 shares from SZ Beiwosi at RMB2.00 per share, based on their respective investment
costs. After completion of the abov e transfers, the shareholders of Zhonggan
Communication were as follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 3 7 , 2 3 6 , 9 5 9 5 1 . 0
M s .T a oX i u l a n .............................. 2 2 , 3 8 9 , 8 5 7 3 0 . 7
Y u eD aI n v e s t m e n t ........................... 1 0 , 9 5 2 , 1 9 0 1 5 . 0
Y i n gH u aI n v e s t m e n t ......................... 1 , 7 0 6 , 5 9 4 2 . 3
S u n n yH a n m y .............................. 7 2 9 , 0 0 0 1 . 0
Total ..................................... 7 3 , 0 1 4 , 6 0 0 1 0 0 . 0
Share repurchase and reduction of capital
Further to the NEEQ Listing Withdrawal and due to the uncertainty as to the listing
plan of Zhonggan Communication at that time, Yue Da Investment decided to realise its
investment in Zhonggan Communication. Subsequent to the commercial negotiation
between Zhonggan Communication and Yue Da Investment, on 6 September 2019,
Zhonggan Communication and the then shareholders of Zhonggan Communication entered
into a capital reduction agreement with Yue Da Investment, pursuant to which Zhonggan
Communication repurchased 15.0% of its shares, which were held by Yue Da Investment,
at RMB15,762,400 (i.e. RMB1.44 per share). Subsequently, on 28 November 2019,
Zhonggan Communication held an extraordinary general meeting, in which the aforesaid
repurchase by Zhonggan Communication was approved. The consideration was determined
with reference to the net book value per share of Zhonggan Communication as at 30 June
2019, and the then valuation of listed companies in the similar industry on the Hong Kong
Stock Exchange. The consideration was fully settled in February 2020. Following the
repurchase, Zhonggan Communication ’s registered capital was reduced from
RMB73,014,600 to RMB62,062,410 and the then shareholders of Zhonggan
Communication were as follows:
HISTORY AND REORGANISATION
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--- page 132 ---
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................ 3 7 , 2 3 6 , 9 5 9 6 0 . 0
M s .T a oX i u l a n .............................. 2 2 , 3 8 9 , 8 5 7 3 6 . 1
Y i n gH u aI n v e s t m e n t ......................... 1 , 7 0 6 , 5 9 4 2 . 7
S u n n yH a n m y .............................. 7 2 9 , 0 0 0 1 . 2
Total ..................................... 6 2 , 0 6 2 , 4 1 0 1 0 0 . 0 0
Transfer of shares to Ms. Wang Wenchun and the management
On 26 February 2020, Ms. T ao Xiulan entered into separate share transfer
agreements to transfer 2,172,185 shares, 1,861,872 shares and 1,551,560 shares of
Zhonggan Communication, representing 3.5%, 3.0% and 2.5% of Zhonggan
Communication ’ss h a r e sh e l db yh e rt oM r .X i a oW e i（ 肖衛 ）, Ms. Wang Wenchun （ 汪文春 ）
and Mr. Zhou Zhiqiang （ 周志強 ）, respectively, at a consideration of RMB25,197,346,
RMB21,597,800 and RMB17,998,100, respectively. The consideration was determined
based on an agreed valuation of RMB720,000,000 (i.e. RMB11.6 per share). Mr. Xiao Wei
w a st h e na ne m p l o y e eo fZ h o n g g a nC o m m u n i c a t i o na n di sc u r r e n t l yt h es u p e r v i s o ro f
Gantong Jiangxi; Ms. Wang Wenchun was and is an Independent Third Party and Mr. Zhou
Zhiqiang was the chief financial officer of Zhonggan Communication and is currently an
executive Director of the Company and the director of Gantong Xiamen.
On the same date, Mr. Liu Haoqiong entered into a share transfer agreement to
transfer 2,482,496 shares of Zhonggan Communication, representing 4.0% of Zhonggan
Communication ’s shares to Mr. Peng Shengqian, a director of Zhonggan Communication at
a consideration of RMB28,797,000 which was determined based on an agreed valuation of
RMB720,000,000 (i.e. RMB11.6 per share) taking into account the business performance of
Zhonggan Communication in 2019 and its future prospects.
Further, as part of a family arrangement, on the same date, Mr. Liu Haoqiong
transferred 2,172,185 shares and 2,172,185 shares, representing 3.5% and 3.5% of
Zhonggan Communitarian ’s shares, to Mr. Liu Dingli and Mr. Liu Dingyi at a consideration
of RMB2,172,185 and RMB2,172,185, respectively.
HISTORY AND REORGANISATION
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--- page 133 ---
Investment by Gao Xin Hang Chuang and increase of registered capital
On 23 June 2020, in anticipation of the previous plan for A-share listing, details of
which are set out at "Listing on NEEQ and NEEQ Listing Withdrawal – Previous plan for A-
share listing" in this section, Zhonggan Communication Mr. Liu Haoqiong and Ms. T ao
Xiulan entered into the capital increase agreement with Nanchang Gao Xin Hang Chuang
Ying Shan Hong Industrial Investment Partnership (Limited Partnership)* （ 南昌高新航創映山
紅產業投資合夥企業（ 有限合夥 ）(‘‘Gao Xin Hang Chuang ’’), an Independent Third Party,
pursuant to which Gao Xin Hang Chuang agreed to subscribe for 3,200,862 shares in
Zhonggan Communication for cash consideration of RMB37,130,000, of which
RMB3,200,862 was contributed to the registered capital and the remaining RMB33,929,138
was converted into capital reserve. The consideration was determined based on an agreed
valuation of RMB720,000,000 (i.e. RMB11.6 per share). On the same date, Mr. Liu
Haoqiong and Ms. T ao Xiulan entered into a repurchase agreement with Gao Xin Hang
Chuang, which provides, amongst others, that Gao Xin Hang Chuang was entitled to
require Zhonggan Communication to repurchase 3,200,862 shares of Zhonggan
Communication upon occurrence of certain triggering events. On 24 June 2020, at the
annual general meeting of Zhonggan Communication, it was resolved that Zhonggan
Communication would increase the regis tered capital from RMB62,062,410 to
RMB65,263,272.
Following the above share transfers and capital increase, the then shareholders of
Zhonggan Communication were as follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................... 3 0 , 4 1 0 , 0 9 3 4 6 . 6
M s .T a oX i u l a n ................................. 1 6 , 8 0 4 , 2 4 0 2 5 . 7
G a oX i nH a n gC h u a n g........................... 3 , 2 0 0 , 8 6 2 4 . 9
M r .P e n gS h e n g q i a n ............................. 2 , 4 8 2 , 4 9 6 3 . 8
M r .L i uD i n g l i.................................. 2 , 1 7 2 , 1 8 5 3 . 3
M r .L i uD i n g y i ................................. 2 , 1 7 2 , 1 8 5 3 . 3
M r .X i a oW e i .................................. 2 , 1 7 2 , 1 8 5 3 . 3
M s .W a n gW e n c h u n............................. 1 , 8 6 1 , 8 7 2 2 . 9
Y i n gH u aI n v e s t m e n t ............................ 1 , 7 0 6 , 5 9 4 2 . 6
M r .Z h o uZ h i q i a n g .............................. 1 , 5 5 1 , 5 6 0 2 . 4
S u n n yH a n m y ................................. 7 2 9 , 0 0 0 1 . 1
Total ........................................ 6 5 , 2 6 3 , 2 7 2 1 0 0 . 0
HISTORY AND REORGANISATION
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--- page 134 ---
Transfer of shares from Mr. Liu Haoqiong to Rui Da Xin Tao
On 23 June 2020, in anticipation of the previous plan for A-share listing, details of which
are set out at ‘‘Listing on NEEQ and NEEQ Listing Withdrawal – Previous plan for A-share
listing ’’in this section, Mr. Liu Haoqiong, Ms. T ao Xiulan and Zhonggan Communication entered
into a share transfer agreement with Rui Da Xin T ao, an Independent Third Party, pursuant to
which Mr. Liu Haoqiong transferred 863,000 shares, representing approximately 1.3% of the
shares in Zhonggan Communication, to Rui Da Xin T ao for a cash consideration of
RMB10,010,800 (the ‘‘June 2020 Agreement ’’). The consideration was determined with
reference to the consideration paid by Gao Xin Hang Chuang i.e. RMB11.6 per share, in its
subscription of Zhonggan Communication ’s shares, details of which are set out in ‘‘Subsidiaries
– 1. Zhonggan Communication – Investment by Gao Xin Hang Chuang and increase of
registered capital ’’in this section.
Transfer of shares from Mr. Liu Haoqiong to Xin Wang Zhi Hui
On 28 August 2020, in anticipation of the previous plan for A-share listing, details of which
are set out at ‘‘Listing on NEEQ and NEEQ Listing Withdrawal – Previous plan for A-share
listing ’’ in this section, Mr. Liu Haoqiong, Zhonggan Communication and Zhuhai Xin Wang Zhi
Hui Equity Investment Partnership (Limited Partnership)* （ 珠海新網智慧股權投資合夥企業（ 有限合
夥 ）(‘‘X i nW a n gZ h iH u i’’), a limited liability partnership established under the laws of the PRC
and an Independent Third Party, signed a share transfer agreement, pursuant to which Mr. Liu
Haoqiong transferred 1,551,724 shares, representing approximately 2.4% of the issued shares
in Zhonggan Communication, to Xin Wang Zhi Hui, for a cash consideration of RMB18,000,000
(i.e. RMB11.6 per share).
Transfer of shares from Rui Da Xin Tao to Shu Zhi Shen Kong
On 14 December 2020, Rui Da Xin T ao entered into a share transfer agreement with Shu
Zhi Shen Kong, an Independent Third Party, Mr. Liu Haoqiong and Ms. T ao Xiulan (the
‘‘December 2020 Agreement ’’) (as varied by supplemental agreements on 14 December 2020
and 6 April 2022) pursuant to which Rui Da Xin T ao transferred 604,100 shares, representing
approximately 0.9% of the shares in Zhonggan Communication, to Shu Zhi Shen Kong for a
cash consideration of RMB7,007,560. The or iginal consideration of RMB7,007,560 was
determined based on the consideration paid by Rui Da Xin T ao in acquisition of shares in
Zhonggan Communication based on an agreed valuation of RMB720,000,000 (i.e. RMB11.6 per
share), taking into account the business performance of Zhonggan Communication in 2019 and
its future prospects.
HISTORY AND REORGANISATION
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--- page 135 ---
Repurchase of shares from Gao Xin Hang Chuang and reduction of capital
Following the occurrence of certain triggering event under the repurchase agreement dated
23 June 2020 (subsequently varied on 20 October 2021), i.e. Zhonggan Communication did not
proceed with it ’s A-share listing plan, details of which are set out in the section headed ‘‘Listing
on NEEQ and NEEQ Listing Withdrawal – Previous Plan for A-share listing ’’in this section, Gao
X i nH a n gC h u a n gb e c a m ee n t i t l e dt oe x e r c i s ei t sr i g h tt or e q u i r eZ h o n g g a nC o m m u n i c a t i o nt o
repurchase the shares held by it at a consideration of RMB41,635,562.75, determined based on
the capital contribution of Gao Xin Hang Chuang, and an annualised return of 10% (including
any dividend or bonus distributed). On 23 August 2021, Zhonggan Communication held an
extraordinary general meeting, in which the repurchase of 3,200,862 shares of Zhonggan
Communication held by Gao Xin Hang Chuang was approved. On 20 October 2021, Zhonggan
Communication, Gao Xin Hang Chuang and the then shareholders of Zhonggan Communication
entered into a capital reduction agreement, pursuant to which Zhonggan Communication ’s
registered capital was reduced from RMB65,263,272 to RMB62,062,410. The consideration was
fully settled in November 2021. After the capital reduction, and the shareholders of Zhonggan
Communication were as follows:
Name of shareholders
Number of
shares held
Shareholding
percentage
(approx.)
(%)
M r .L i uH a o q i o n g............................... 2 7 , 9 9 5 , 3 6 9 4 5 . 1
M s .T a oX i u l a n ................................. 1 6 , 8 0 4 , 2 4 0 2 7 . 1
M r .P e n gS h e n q i a n .............................. 2 , 4 8 2 , 4 9 6 4 . 0
M r .L i uD i n g l i.................................. 2 , 1 7 2 , 1 8 5 3 . 5
M r .L i uD i n g y i ................................. 2 , 1 7 2 , 1 8 5 3 . 5
M r .X i a oW e i .................................. 2 , 1 7 2 , 1 8 5 3 . 5
M s .W a n gW e n c h u n............................. 1 , 8 6 1 , 8 7 2 3 . 0
Y i n gH u aI n v e s t m e n t ............................ 1 , 7 0 6 , 5 9 4 2 . 7
X i nW a n gZ h iH u i ............................... 1 , 5 5 1 , 7 2 4 2 . 5
M r .Z h o uZ h i q i a n g .............................. 1 , 5 5 1 , 5 6 0 2 . 5
S u n n yH a n m y ................................. 7 2 9 , 0 0 0 1 . 2
S h uZ h iS h e nK o n g ............................. 6 0 4 , 1 0 0 1 . 0
R u iD aX i nT a o ................................ 2 5 8 , 9 0 0 0 . 4
Total ........................................ 6 2 , 0 6 2 , 4 1 0 1 0 0 . 0
HISTORY AND REORGANISATION
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--- page 136 ---
Transfer of shares from Xin Wang Zhi Hui to Mr. Liu Haoqiong
On 19 October 2021, in view of the change of listing plan, Mr. Liu Haoqiong and Xin Wang
Zhi Hui entered into a share transfer agreement (subsequently varied on 1 March 2022),
pursuant to which Mr. Liu Haoqiong purchased 1,551,724 shares, representing approximately
2.5% of the shares of Zhonggan Communication, from Xin Wang Zhi Hui for a cash
consideration of RMB19,728,813, which was determined based on the consideration paid by Xin
Wang Zhi Hui, being RMB18,000,000, to purchase the 1,551,724 shares in Zhonggan
Communication plus 7.0% annual interest (which was subsequently reduced to 5.08% from 25
November 2021 onwards) on the original consideration. On 26 March 2022, the consideration
was settled in full and Xin Wang Zhi Hui ceased to be a shareholder of Zhonggan
Communication.
Conversion of Zhonggan Communicati on into a limited liability company
On 28 February 2022, for the purposes of the Reorganisation, the then shareholders of
Zhonggan Communication resolved to convert Zhonggan Communication into a limited liability
company and to change its name to its current name. The aforementioned changes were
approved by the relevant PRC authority on 3 March 2023.
As at 3 March 2022, Zhonggan Communication ’s holding structure was as follows:
Name of equity holders
Capital
contribution
Percentage of
equity
interest
(approx.)
RMB (%)
M r .L i uH a o q i o n g............................... 2 7 , 9 9 5 , 3 6 9 4 5 . 1
M s .T a oX i u l a n ................................. 1 6 , 8 0 4 , 2 4 0 2 7 . 1
M r .P e n gS h e n g q i a n ............................. 2 , 4 8 2 , 4 9 6 4 . 0
M r .L i uD i n g l i.................................. 2 , 1 7 2 , 1 8 5 3 . 5
M r .L i uD i n g y i ................................. 2 , 1 7 2 , 1 8 5 3 . 5
M r .X i a oW e i .................................. 2 , 1 7 2 , 1 8 5 3 . 5
M s .W a n gW e n c h u n............................. 1 , 8 6 1 , 8 7 2 3 . 0
Y i n gH u aI n v e s t m e n t ............................ 1 , 7 0 6 , 5 9 4 2 . 7
M r .Z h o uZ h i q i a n g .............................. 1 , 5 5 1 , 5 6 0 2 . 5
S u n n yH a n m y ................................. 7 2 9 , 0 0 0 1 . 2
S h uZ h iS h e nK o n g ............................. 6 0 4 , 1 0 0 1 . 0
R u iD aX i nT a o ................................ 2 5 8 , 9 0 0 0 . 4
Total ....................................... 6 2 , 0 6 2 , 4 1 0 1 0 0 . 0
HISTORY AND REORGANISATION
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--- page 137 ---
Further transfer of equity interest from Mr. Liu Haoqiong to Rui Da Xin Tao and Shu Zhi
Shen Kong
Due to change of listing plan which led to change in the agreed valuation of Zhonggan
Communication from RMB720,000,000 to RMB500,000,000, the parties agreed to adjust the
percentage of equity interest to be acquired by Rui Da Xin T ao and Shu Zhi Shen Kong. On 6
March 2022 and 6 April 2022, Mr. Liu Haoqiong and Ms. T ao Xiuian entered into separate
agreements with Rui Da Xin T ao and Shu Zhi Shen Kong respectively, to, among other things,
transfer further approximately 0.2% equity in terest in Zhonggan Commu nication to Rui Da Xin
T ao at nil consideration, and to transfer further approximately 0.4% equity interest in Zhonggan
Communication to Shu Zhi Shen Kong at nil consideration for the purpose of compensating the
downward adjustment of valuation of Zhonggan Communication.
Capital injection by You Po Investment
On 14 April 2022, Zhonggan Communication entered into a capital increase agreement with
You Po Investment, an Independent Third Party, pursuant to which You Po Investment agreed to
subscribe for approximately 4.3% of equity interest in Zhonggan Communication for cash
consideration of RMB22,440,000, of which RMB2 ,805,000 was contribut ed to the registered
capital, and the remaining RMB19,635,000 was converted into capital reserve. The
consideration was determined following arm ’s length negotiations between the parties with
reference to an agreed valuation of Zhonggan Communication of RMB500,000,000.
Capital injection by Ms. Yeung
On 14 April 2022, Ms. Yeung, a Hong Kong individual and an Independent Third Party,
subscribed for 1.0% of equity interest in Zhonggan Communication at a cash consideration of
RMB5,241,808, of which RMB655,226 was contributed to the registered capital, and the
remaining RMB4,586,582 was converted into capital reserve. The consideration was determined
following arm ’s length negotiations between the parties with reference to an agreed valuation of
Zhonggan Communication of RMB500,000,000.
Transfer of equity interest from Mr. Peng Shenqian to Mr. Liu Haoqiong
On 14 April 2022, in view of the change of listing plan, Mr. Liu Haoqiong entered into an
equity transfer agreement with Mr. Peng Shenqian pursuant to which Mr. Liu Haoqiong
purchased 4.0% of equity interest of Zhonggan Communication from Mr. Peng Shengqian at
RMB28,796,953.6, being the original consideration paid by Mr. Peng Shenqian to acquire shares
of Zhonggan Communication in May 2020.
Further transfer of equity interest to Mr. Liu Dingli and Mr. Liu Dingyi
On 14 April 2022, as part of a family arrangement, Ms. T ao Xiulan entered into an equity
transfer agreement with each of Mr. Liu Dingli and Mr. Liu Dingyi, respectively to gift 4.0% of
equity interest in Zhonggan Communication, to each of Mr. Liu Dingli and Mr. Liu Dingyi at nil
consideration.
HISTORY AND REORGANISATION
– 128 –


--- page 138 ---
Increase of registered capi tal of Zhonggan Communication
Following the capital injection by You Po Investment and Ms. Yeung and the above
transfers of equity interest, on 14 April 2022, in the extraordinary general meeting of Zhonggan
Communication, it was resolved that Zhonggan Communication would increase the registered
capital from RMB62,062,410 to RMB65,522,636. Upon completion of the subscription, Zhonggan
Communication was converted into a sino-foreign joint venture.
Transfer of equity interest from Mr. Xiao Wei, Ms. Wang Wenchun and Mr. Zhou Zhiqiang
to Ms. Tao Xiulan
On 14 April 2022, in view of the change of listing plan, Ms. T ao Xiulan entered into
separate equity transfer agreements with Mr. Xiao Wei, Ms. Wang Wenchun and Mr. Zhou
Zhiqiang, pursuant to which Ms. T ao Xiulan purchased 3.5%, 3.0% and 2.5% of the equity
interest of Zhonggan Communication from Mr. Xiao Wei, Ms. Wang Wenchun and Mr. Zhou
Zhiqiang at a consideration of RMB25,197,346, RMB21,597,715.2 and RMB17,998,096, being
the respective original consideration paid by Mr. Xiao Wei, Ms. Wang Wenchun and Mr. Zhou
Zhiqiang to acquire shares of Zhonggan Communication in May 2020.
Upon completion of the above transfers on 19 April 2022, Zhonggan Communication was
held as follows:
Name of equity holders
Capital
contribution
Percentage of
equity
interest
RMB (%)
M r .L i uH a o q i o n g............................... 3 1 , 6 4 1 , 2 3 9 4 8 . 3
M s .T a oX i u l a n ................................. 1 7 , 4 2 4 , 8 6 5 2 6 . 6
M r .L i uD i n g l i.................................. 4 , 6 5 4 , 6 8 1 7 . 1
M r .L i uD i n g y i ................................. 4 , 6 5 4 , 6 8 1 7 . 1
Y o uP oI n v e s t m e n t .............................. 2 , 8 0 5 , 0 0 0 4 . 3
Y i n gH u aI n v e s t m e n t ............................ 1 , 7 0 6 , 5 9 4 2 . 6
S h uZ h iS h e nK o n g ............................. 8 7 5 , 9 4 5 1 . 3
S u n n yH a n m y ................................. 7 2 9 , 0 0 0 1 . 1
M s .Y e u n g .................................... 6 5 5 , 2 2 6 1 . 0
R u iD aX i nT a o ................................ 3 7 5 , 4 0 5 0 . 6
Total ........................................ 6 5 , 5 2 2 , 6 3 6 1 0 0 . 0
As part of the Reorganisation, the entire equity interest of Zhongggan Communication was
subsequently acquired by Jiangxi Zhongge, a limited liability company incorporated in the PRC
which is an indirect wholly-owned subsidiary of the Company. As of the Latest Practicable Date,
Zhonggan Communication has become an indirectly wholly-owned subsidiary of the Company,
which is also ultimately controlled by Mr. Liu Haoqiong and Ms. T ao Xiulan. See section headed
‘‘Reorganisation ’’in this section for further details.
HISTORY AND REORGANISATION
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--- page 139 ---
Branch offices of Zhonggan Communication
Zhoonggan Communication had established three branch offices in the PRC, including
Guizhou Province, Shanghai and Zhejiang Province. Due to change in development strategies,
the branch offices in Guizhou Province and Zhejiang Province were deregistered on 24 February
2023 and 10 March 2023, respectively. As confirmed by the Directors and concurred by the PRC
Legal Advisers, saved as disclosed, the deregistered branch offices were not involved in any
material claims, litigations or non-compliant incidents during the Track Record Period. In
addition, the deregistration had no material impact on the Group ’s financial performance,
financial position and cash flows during the Track Record Period.
2. GLP Technology
GLP T echnology was incorporated by Zhonggan Communication as a limited liability
company in the PRC on 30 November 2017, then known as Jiangxi Gelapu T echnology Co.,
Ltd.*（ 江西歌拉普科技有限公司 ）. GLP T echnology was incorporated with a registered capital of
RMB10,000,000. On 26 June 2018, Zhonggan Communication resolved to increase the
registered capital of GLP T echnology to RMB30,000,000, which has been paid up. On 16
February 2022, GLP T echnology changed to its current name. GLP T echnology is primarily
engaged in the Digitalisation Solution Services business. As of the Latest Practicable Date, it is
an indirect wholly-owned su bsidiary of the Company.
3. Gantong Jiangxi
Gantong Jiangxi was incorporated by Zhonggan Communication as a limited liability
company on 28 October 2019 with a registered capital of RMB10,000,000. During the Track
Record Period and up to the Latest Practicable Date, Gantong Jiangxi has not commenced
business. As of the Latest Practicable Date, Gantong Jiangxi is an indirect wholly-owned
subsidiary of the Company.
4. Gantong Xiamen
Gantong Xiamen was incorporated by Zhonggan Communication as a limited liability
company in the PRC on 12 November 2021 with a registered capital of RMB1,000,000. During
the Track Record Period and up to the Latest Practicable Date, Gantong Xiamen has not
commenced business. As of the Latest Practicable Date, Gantong Xiamen is an indirect wholly-
owned subsidiary of the Company.
5. GLP Software
GLP Software was incorporated by GLP T echnology as a limited liability company in the
PRC on 11 February 2022 with a registered capital of RMB5,000,000. GLP Software is primarily
engaged in the Digitalisation Solution Services business. As of the Latest Practicable Date, GLP
Software is an indirect wholly-owned subsidiary of the Company.
HISTORY AND REORGANISATION
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REORGANISATION
In anticipation of the Listing, the Group underwent the Reorganisation as a result of which
the Company became the holding company and listing vehicle of the Group.
Incorporation of holding companies
As part of the Reorganisation, six companies were incorporated in the BVI with limited
liability by the original individual and corporate shareholders of Zhonggan Communication and
one company was incorporated in the Cayman Islands by an original corporate shareholder of
Zhonggan Communication, respectively, as their investment vehicles with their shareholdings
proportional to their original percentage levels of equity interest in Zhonggan Communication.
On 12 April 2022, GT & Yangtze, Huat Huat and Octuple Hills were incorporated in the BVI
with limited liability by the individual sharehol ders of Zhonggan Communication, namely, Mr. Liu
Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli and Mr. Liu Dingyi, as their respective investment
vehicles. GT & Yangtze is owned as to 70.0% by Mr. Liu Haoqiong and as to 30.0% by Ms. T ao
Xiulan. Huat Huat and Octuple Hills are wholly-owned by Mr. Liu Dingli and Mr. Liu Dingyi,
respectively.
On 8 June 2022, You Po Investment incorporated You Po BVI in the BVI with limited
liability as its wholly-owned investment vehicle. On 27 May 2022, Ying Hua Investment
incorporated Ying Hua BVI in the BVI with limi ted liability as its wholly-owned investment
vehicle. Shu Zhi Shen Kong and Rui Da Xin T ao also incorporated Shu Zhi Cayman and Rui Da
BVI in the Cayman Islands and BVI, respectively wi th limited liability as their respective wholly-
owned investment vehicles.
Incorporation of the Company
On 20 April 2022, the Company was incorporated in the Cayman Islands as an exempted
company. Upon incorporation, the Company issued one ordinary share with a par value of
HK$0.1 to the initial subscriber which was fully paid, and the initial subscriber subsequently
transferred such Share to GT & Yangtze on 26 May 2022. On the same day, the Company
allotted additional Shares. Upon completion of the allotment, the shareholding of the Company
was as follows:
Name of Shareholders
Number of
issued Shares
Shareholding
percentage
(approx.)
(%)
G T&Y a n g t z e ................................. 7 5 7 , 2 6 8 8 4 . 0
H u a tH u a t.................................... 7 1 , 8 3 9 8 . 0
O c t u p l eH i l l s .................................. 7 1 , 8 3 9 8 . 0
Total ........................................ 9 0 0 , 9 4 6 1 0 0 . 0
HISTORY AND REORGANISATION
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Following the Company ’s incorporation, the following individuals were appointed as
Directors on 19 May 2022: Mr. Liu Haoqiong, Mr. Liu Dingli, Mr. Peng Shengqian, Ms. T ao
Xiulan, Ms. Xie Xiaolan, and Mr. Liu Dingyi. On 13 September 2022, Ms. T ao Xiulan resigned as
Director for personal reasons, specifically t o allocate more time to the care of her family.
Concurrently, Mr. Zhou Zhiqiang was appointed as Director on the same day. For further details
of the Directors, please refer to the paragraphs headed ‘‘Directors and Senior Management –
Directors – Executive Directors ’’in this prospectus.
A l l o t m e n to fS h a r e st oY i n gH u aB V I ,S h uZ h iC a y m a n ,R u iD aB V I ,Y o uP oB V Ia n dM s .
Yeung
On 7 July 2022, the Company allotted 43,291 Shares, 26,339 Shares, 13,518 Shares,
5,793 Shares and 10,113 Shares at par value to You Po BVI, Ying Hua BVI, Shu Zhi Cayman,
Rui Da BVI and Ms. Yeung. Upon completion of the allotment, the shareholding of the Company
was as follows:
Name of Shareholders
Number of
issued Shares
Shareholding
percentage
(approx.)
(%)
G T&Y a n g t z e ................................. 7 5 7 , 2 6 8 7 5 . 7
H u a tH u a t.................................... 7 1 , 8 3 9 7 . 2
O c t u p l eH i l l s .................................. 7 1 , 8 3 9 7 . 2
Y o uP oB V I................................... 4 3 , 2 9 1 4 . 3
Y i n gH u aB V I .................................. 2 6 , 3 3 9 2 . 6
S h uZ h iC a y m a n ............................... 1 3 , 5 1 8 1 . 4
R u iD aB V I ................................... 5 , 7 9 3 0 . 6
M s .Y e u n g .................................... 1 0 , 1 1 3 1 . 0
Total ........................................ 1 , 0 0 0 , 0 0 0 1 0 0 . 0
Incorporation of Zhonggan BVI and Zhonggan HK
On 24 May 2022, Zhonggan BVI was incorporated by the Company as an investment
vehicle in the BVI. Upon incorporation, Zhonggan BVI issued one ordinary share with issued
capital of USD1.00.
On 9 June 2022, Zhonggan HK was incorporated by Zhonggan BVI in Hong Kong. Upon
incorporation, Zhonggan BVI holds 1 issued ordinary share in Zhonggan HK with issued capital
of HK$1.00.
HISTORY AND REORGANISATION
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Incorporation of Jiangxi Zhongge an d changes to its registered capital
On 18 July 2022, Zhonggan HK incorporated a wholly foreign-owned enterprise, Jiangxi
Zhongge, as a limited liability company in the PRC, with an initial registered capital of
RMB158,524,890. On 22 July 2022, the registered capital of Jiangxi Zhongge was increased
from RMB158,524,890 to HK$184,453,522. On 7 April 2023, Zhonggan HK resolved to reduce
the registered capital of Jiangxi Zhongge to HK$22,806,837 and the reduction of registered
capital took effect on 24 May 2023. As at the Latest Practicable Date, the registered capital of
Jiangxi Zhongge has not been paid up. As advised by the PRC Legal Advisers, the unpaid
registered capital of Jiangxi Zhongge will not affect the completion of the Reorganisation.
Acquisition of approximately 98.9% equi ty interest of Zhonggan Communication by
Jiangxi Zhongge
On 22 August 2022, Jiangxi Zhongge entered into equity transfer agreements with each of
Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr. Liu Ding l i ,M r .L i uD i n g y i ,Y o uP oI n v e s t m e n t ,Y i n gH u a
Investment, Shu Zhi Shen Kong, Rui Da Xin T ao and Ms. Yeung (together, the ‘‘Transferors ’’),
pursuant to which the Transferors agreed to transfer in aggregate approximately 98.9% of the
equity interest in Zhonggan Communication to Jiangxi Zhongge for a total consideration of
RMB136,262,066, determined based on the net asset value of Zhonggan Communication as at
31 December 2021. As Jiangxi Zhongge is a newly established entity whose registered capital
has yet to be paid up, to facilitate the transfer of Zhonggan Communication ’s 98.9% equity
interest which forms part of the Reorganisation, each of (i) Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr.
Liu Dingli, Mr. Liu Dingyi, Jiangxi Zhongge and Zhonggan Communication, and (ii) Ms. Yeung,
Jiangxi Zhongge and Zhonggan Communication entered into a waiver agreement on 22 August
2022 waiving the obligation of Jiangxi Zhongge to pay them their respective considerations.
Subsequently on 14 December 2023, Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu
Dingyi, Ms. Yeung, Jiangxi Zhongge and Zhonggan Communication entered into a termination
agreement (the ‘‘December 2023 Agreement ’’), among other things, to terminate the
aforementioned waiver agreements and revive the obligation of Jiangxi Zhongge to pay them
their respective considerations pursuant to the aforementioned equity transfer agreement. Ms.
T ao Xiulan, Mr. Liu Dingyi, Mr. Liu Dingli and Ms. Yeung provided funds for a total amount of
RMB61,176,196 to Mr. Liu Haoqiong in order to f acilitate the provision of funds for a total
amount of RMB127,718,305 (the ‘‘Funds ’’) from Mr. Liu Haoqiong to Jiangxi Zhongge as gift,
solely for the purpose of its payment of the cons iderations to Mr. Liu Haoqiong, Ms. T ao Xiulan,
Mr. Liu Dingli, Mr. Liu Dingyi and Ms. Yeung. The consideration payable by Jiangxi Zhongge to
Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu Dingyi, Ms. Yeung, You Po Investment,
Ying Hua Investment, Shu Zhi Shen Kong and Rui Da Xin T ao was settled. As confirmed by the
PRC Legal Advisers, the equity transfers from the Transferors to Jiangxi Zhongge have been
duly completed and Jiangxi Zhongge is duly registered as the equity holder of 98.9% equity
interest of Zhonggan Communication on 25 August 2022. After the completion of the
aforementioned equity transfers, Zhonggan Communication was held as follows:
HISTORY AND REORGANISATION
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Name of equity holders
Capital
contribution
Percentage of
equity interest
(approx.)
RMB (%)
J i a n g x iZ h o n g g e ............................... 6 4 , 7 9 3 , 6 3 6 9 8 . 9
S u n n yH a n m y ................................ 7 2 9 , 0 0 0 1 . 1
Total ...................................... 6 5 , 5 2 2 , 6 3 6 1 0 0 . 0
Transfer of approximately 1.1% equity interest of Zhonggan Communication from Sunny
Hanmy to Mr. Liu Dingyi and from Mr. Liu Dingyi to Jiangxi Zhongge
Pursuant to the terms of the share repurchase agreement made between Mr. Liu Haoqiong
and Sunny Hanmy dated 22 March 2019, Sunny Hanmy shall be entitled to request Mr. Liu
Haoqiong (or a third party designated by him) to repurchase the equity interest held by Sunny
Hanmy at its initial capital contribution of RMB2,500,472 plus an annual interest of 12% on the
initial capital contribution (excluding divid end already paid to Sunny Hanmy). As Jiangxi
Zhongge was a newly established entity whose registered capital has yet to be paid up, to
facilitate the transfer of Zhonggan Communication ’s 1.1% equity interest to Jiangxi Zhongge
which forms part of the Reorganisation, Mr. Liu Haoqiong designated Mr. Liu Dingyi, rather than
Jiangxi Zhongge, to acquire the equity interest of Zhonggan Communication from Sunny Hanmy.
As a result, on 22 December 2022, Mr. Liu Dingyi entered into an equity transfer agreement with
Sunny Hanmy, pursuant to which Sunny Hanmy agreed to transfer approximately 1.1% of the
equity interest in Zhonggan Communication to Mr. Liu Dingyi for a cash consideration of
approximately RMB3.6 million. The consideratio n has been fully settled. As confirmed by the
PRC Legal Advisers, the equity transfer from Sunny Hanmy to Mr. Liu Dingyi have been duly
completed on 3 February 2023.
On 20 February 2023, Jiangxi Zhongge entered into an equity transfer agreement with Mr.
Liu Dingyi, pursuant to which Mr. Liu Dingyi agreed to transfer approximately 1.1% of the equity
interest in Zhonggan Communication to Jiangxi Zhongge for a consideration of approximately
RMB3.6 million, determined based on the pur chase price paid to Sunny Hanmy. As Jiangxi
Zhongge is a newly established entity whose registered capital has yet to be paid up, to
facilitate the transfer of Zhonggan Communication ’s 1.1% equity interest which forms part of the
Reorganisation, on 20 February 2023, Mr. Liu Dingyi entered into a waiver agreement with
Jiangxi Zhongge and Zhonggan Communication, pursuant to which Mr. Liu agreed to waive the
obligation of Jiangxi Zhongge to pay him the cons ideration of approximately RMB3.6 million.
Subsequently, the waiver agreement was terminated and the obligation of Jiangxi Zhongge to
pay Mr. Liu Dingyi the relevant consideration pursuant to the aforementioned equity transfer
agreement was revived pursuant to the December 2023 Agreement. As mentioned above, the
Funds were provided to Jiangxi Zhongge and the consideration payable by Jiangxi Zhongge to
Mr. Liu Dingyi was settled. As confirmed by the PRC Legal Advisers, the equity transfer from Mr.
Liu Dingyi to Jiangxi Zhongge has been duly completed on 21 February 2023 and Jiangxi
Zhongge is duly registered as the equity holder of 100.0% equity interest of Zhonggan
Communication. Subsequent to these transfers, Zhonggan Communication became a wholly-
owned subsidiary of Jiangxi Zhongge.
HISTORY AND REORGANISATION
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Increase of authorised share capital of th e Company and allotment of shares to Octuple
Hills
On 15 May 2023, the Company ’s authorised share capital was increased from HK$100,000
divided into 1,000,000 Shares with a par value of HK$0.1 each to HK$101,126 divided into
1,011,260 Shares with a par value of HK$0.1 each.
On 15 May 2023, as a result of acquisition of approximately 1.1% of the equity interest in
Zhonggan Communication by Mr. Liu Dingyi which was subsequently transferred to Jiangxi
Zhongge as described above, 11,251 Shares were allotted to Octuple Hills at par value, to
reflect the change in percentage level of equity interest held by Mr. Liu Dingyi in Zhonggan
Communication. Further to such allotment, Octuple Hills held 83,090 Shares, representing
approximately 8.2% of all issued Shares. As at 15 May 2023, the shareholding of the Company
was as follows:
Name of Shareholders
Number of
issued Shares
Shareholding
percentage
(approx.)
(%)
G T&Y a n g t z e ................................. 7 5 7 , 2 6 8 7 4 . 9
O c t u p l eH i l l s .................................. 8 3 , 0 9 0 8 . 2
H u a tH u a t.................................... 7 1 , 8 3 9 7 . 1
Y o uP oB V I................................... 4 3 , 2 9 1 4 . 3
Y i n gH u aB V I .................................. 2 6 , 3 3 9 2 . 6
S h uZ h iC a y m a n ............................... 1 3 , 5 1 8 1 . 3
M s .Y e u n g .................................... 1 0 , 1 1 3 1 . 0
R u iD aB V I ................................... 5 , 7 9 3 0 . 6
Total ....................................... 1 , 0 1 1 , 2 5 1 1 0 0 . 0
PRE-IPO INVESTMENTS
Investment by Rui Da BVI
By the June 2020 Agreement (as varied by a supplemental agreement dated 14 December,
2020), Rui Da Xin T ao acquired 863,000 shares of Zhonggan Communication from Mr. Liu
Haoqiong at a total consideration of RMB10,010,800. For details, please refer to paragraphs
headed ‘‘Subsidiaries – 1. Zhonggan Communication – Transfer of shares from Mr. Liu Haoqiong
to Rui Da Xin T ao ’’ and ‘‘Subsidiaries – Zhonggan Communication – Further transfer of equity
interest from Mr. Liu Haoqiong to Rui Da Xin T ao and Shu Zhi Shen Kong ’’in this section.
HISTORY AND REORGANISATION
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Rui Da Xin T ao is a limited liability partner ship established in the PRC on 3 August 2015
principally engaged in investment management, asset management and project investment. Rui
Da Xin T ao is owned as to 30.0% by its general partner, Mr. Li Ning （ 李寧 ）, and as to 40.0% by
Mr. Zhao Yang （ 趙陽 ） and as to 30.0% by Mr. Song Chuan Ke （ 宋傳柯 ）, as limited partners.
Details of Rui Da Xin T ao, its investment portfolio and scale of operation are as follows:
Name . . . . . . . . . . . . . . . . . Beijing Rui Da Xin T ao Capital Management Centre (Limited
Partnership)
Date of incorporation . . . . . 3 August 2015
Company type .......... L i m i t e dP a r t n e r s h i p
Investment portfolio . . . . . . Currently invested in two projects: (i) the Group and (ii) a
company in railroad track technology industry
Scale of operation . . . . . . . As confirmed by the general partner of Rui Da Xin T ao, the
amount of investment of Rui Da Xin T ao was approximately
RMB10.0 million, and it had no investment return as at the
Latest Practicable Date.
Number of key staff ...... 3
Reason for investment . . . . (1) In 2020, AVIC Securities Co., Ltd., the A-share Sponsor
for Zhonggan Communication ’s previous plan for A-share
listing, recommended the Group to them.
(2) Mr. Li Ning （ 李寧 ）, the general partner of Rui Da Xin T ao,
possesses extensive investment experience. He has
invested in diverse industries such as wire and cable
manufacturing, housing construction, organic chemical
raw materials manufacturing, biopharmaceutical
manufacturing, and more. With his professional
background, he has developed a deep understanding of
the telecommunications industry. After conducting
thorough research and assessment, he holds a positive
overall assessment of the Group ’s business prospects.
On 7 July 2022, 5,793 Shares were allotted and issued to Rui Da BVI, which is wholly
owned by Rui Da Xin T ao.
HISTORY AND REORGANISATION
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Investment by Shu Zhi Cayman
By the December 2020 Agreement, as varied by supplemental agreements dated 14
December 2020 and 6 April 2022, Shu Zhi Shen Kong acquired 604,100 shares of Zhonggan
Communication from Rui Da Xin T ao at a total consideration of RMB7,007,560. For details,
please refer to ‘‘Subsidiaries – 1. Zhonggan Communication – Transfer of shares from Rui Da
Xin T ao to Shu Zhi Shen Kong ’’ and ‘‘Subsidiaries – 1. Zhonggan Communication – Further
transfer of equity interest from Mr. Liu Ha oqiong to Rui Da Xin T ao and Shu Zhi Shen Kong ’’ in
this section.
Shu Zhi Shen Kong is a limited liability partnership established in the PRC on 14 December
2020 principally engaged in corporate management and information consultancy services. Shu
Zhi Shen Kong is owned as to approximately 94.3% by its general partner Shanghai Songxian
Enterprise Management Center (Limited Partnership)* （ 上海誦弦企業管理中心（ 有限合
夥 ））(‘‘Shanghai Song Xian ’’), and as to the remaining 5.7% by its limited partner Mr. Yu Da （ 虞
達 ）. Shanghai Song Xian is a limited liability partnership established in the PRC on 23
November 2020 and is principally engaged in corporate management consultancy and financial
consultancy services. Shanghai Song Xian is owned as to approximately 18.3% by its general
partner Mr. Wang Wei （ 王巍 ）, and as to approximately 61.0% by Ms. Da Mingyu （ 達明玉 ）,a n d
as to the remaining approximately 20.7% by a number of individuals, as limited partners. Details
of Shu Zhi Shen Kong, its investment portfolio and scale of operation are as follows:
Name . . . . . . . . . . . . . . . . . Hainan Shu Zhi Shen Kong Investment Partnership (Limited
Partnership)
Date of incorporation . . . . . 14 December 2020
Company type .......... L i m i t e dP a r t n e r s h i p
Investment portfolio ...... M a i n l yf o c u s e d o nh i g h - t e c h enterprises. Currently involved in
several projects in specific industries include
telecommunications service s industry (such as the Group ’s
business) and other industries such as pharmaceutical, high-
speed rail and software.
Scale of operation . . . . . . . As confirmed by the general partner of Shu Zhi Shen Kong, the
amount of investment of Shu Zhi Shen Kong was
approximately RMB20.0 million, and it had no investment
return up to the Latest Practicable Date.
Number of key staff ...... M o r et h a n1 0
Reason for investment . . . . (1) In 2020, AVIC Securities Co., Ltd., the A-share Sponsor
for Zhonggan Communication ’s previous plan for A-share
listing, recommended the Group to them.
HISTORY AND REORGANISATION
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(2) The general partner of Shu Zhi Shen Kong, Shanghai
Song Xian, also has investments in various sectors such
as the financial industry, leasing, and business services.
The partners of Shanghai Song Xian, leveraging their
investment experience, have conducted assessments on
factors including revenue, growth rate, and other
indicators within the telecom munications industry. Based
on comprehensive data analysis, they are optimistic
towards the evaluation of the Group ’s business prospects
and other aspects.
On 7 July 2022, 13,518 Shares, were allotted and issued to Shu Zhi Cayman, which is
wholly owned by Shu Zhi Shen Kong.
Investment by You Po BVI
On 14 April 2022, Zhonggan Communication entered into a capital increase agreement with
You Po Investment, an Independent Third Party, pursuant to which You Po Investment agreed to
subscribe for approximately 4.3% of equity interest in Zhonggan Communication for cash
consideration of RMB22,440,000. For details, please refer to ‘‘Subsidiaries – 1. Zhonggan
Communication – Capital Injection by You Po Investment ’’of this section.
You Po Investment is a limited liability partnership established in the PRC on 22 February
2022 principally engaged in information consultancy services. You Po Investment is owned as to
approximately 38.3% by its general partner Ms. Wang Wenchun （ 汪文春 ）, and as to
approximately 11.6% by Mr. Li Peichao （ 李沛潮 ）, as to approximately 11.6% by Mr. Zhao Yijiu
（ 趙億久 ）, as to approximately 10.2% by Mr. Wu Shuiyin （ 吳水印 ）, and as to the remaining
approximately 28.3% by a number of individuals, as limited partners. Details of Yo Po
Investment, its investme nt portfolio and scale of operation are as follows:
Name . . . . . . . . . . . . . . . . . Shenzhen You Po Business Consulting Partnership (Limited
Partnership)
Date of incorporation ..... 2 2F e b r u a r y2 0 2 2
Company type .......... L i m i t e dP a r t n e r s h i p
Investment portfolio . . . . . . Currently only invested in the Group
Scale of operation . . . . . . . As confirmed by the general partner of Yo Po Investment, the
amount of investment of Yo Po Investment was approximately
RMB22.4 million, and it had no investment return up to the
Latest Practicable Date.
Number of key staff ...... M o r et h a n1 0
HISTORY AND REORGANISATION
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Reason for investment . . . . (1) The general partner of You Po Investment, Ms. Wang
Wenchun, has become acquainted with Mr. Liu Haoqiong
for many years, and has made her investment based on
her recognition and trust in his character.
(2) Ms. Wang Wenchun herself has investment experience in
a real estate appraisal company and has a deep
understanding of the telecommunications industry. Based
on her research and assessment, she maintains a positive
assessment of the Group ’s business prospects and other
aspects.
On 7 July 2022, 43,291 Shares, were allotted and issued to You Po BVI, which is wholly
owned by You Po Investment.
Investment by Ms. Yeung
On 14 April 2022, pursuant to a subscription agreement, Ms. Yeung, a Hong Kong
individual and an Independent Third Party, subscribed for 1.0% of equity interest in Zhonggan
Communication at a consideration of RMB5,241,808. Details of Ms. Yeung, her investment
portfolio and scale of operation are as follows:
Name ................. Y e u n gH o iK a
Investment portfolio ...... C u r r e n t l y i n v o l v e d i n s e v e r a l projects in specific industries
include telecommunications services industry (such as the
Group ’s business) and financial industry
Scale of operation . . . . . . . As confirmed by Ms. Yeung, the amount of investment of Ms.
Yeung was approximately RMB5.2 million, and it had no
investment return up to the Latest Practicable Date.
Reason for investment . . . . (1) Mr. Yeung has become acquainted with Mr. Liu Haoqiong
for 20 years, and has made her investment based on her
recognition and trust in his character.
(2) Ms. Yeung has a strong understanding of the
telecommunications industry. Apart from her investments
in the Group, she also invests in other companies within
the telecommunications sector. Furthermore, she
possesses extensive inves tment experience in various
industries, including the financial sector. After thorough
research and assessment, she holds an optimistic outlook
on the Group ’s business prospects.
For details, please refer to ‘‘Subsidiaries – 1. Zhonggan Communication – Capital injection
by Ms. Yeung ’’of this section.
HISTORY AND REORGANISATION
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--- page 149 ---
Ms. Yeung has over ten years of experience in the consulting industry. She was introduced
to the Group by Mr. Liu Haoqiong, the Chairman and executive Director. Ms. Yeung and Mr. Liu
Haoqiong have known each other for more than six years.
On 7 July 2022, 10,113 Shares, were allotted and issued to Ms. Yeung.
Save as the Pre-IPO Investments, the Pre-IPO Investors were not involved in and did not
have any role in the operation nor the Listing up to the Latest Practicable Date. T o the best of
the Directors ’ knowledge, information and belief and having made all reasonable enquiries, the
Pre-IPO Investors invested in the Group because they appreciate the prospects and potential
growth of the Group. Save for the Pre-IPO Inves tments, the Pre-IPO Investors did not have any
past or present relationships (including, but without limitation, family, trust, business,
employment relationships) or any agreements, arrangements, understanding or undertakings
with the Company, the subsidiaries, Shareholders, Directors or senior management and any of
their respective associates and is an Independent Third Party as at the Latest Practicable Date.
As the Pre-IPO Investors are not core connected persons of the Company, the Shares held by
them will be counted towards the public float after the Listing.
Details of the Pre-IPO Inve stments are set out below:
Name of Pre-IPO
Investor Rui Da BVI Shu Zhi Cayman You Po BVI Ms. Yeung
Date of
investment (1) :. . .
23 June 2020 14 December 2020 12 April 2022 12 April 2022
Amount of
consideration paid:
RMB3,003,240 (2) RMB7,007,560 RMB22,440,000 RMB5,241,808
HISTORY AND REORGANISATION
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--- page 150 ---
Name of Pre-IPO
Investor Rui Da BVI Shu Zhi Cayman You Po BVI Ms. Yeung
Basis of
determination of the
consideration:. . . .
The original consideration
of RMB10,010,800 was
determined with reference
to the consideration paid
by another investor, Gao
Xin Hang Chuang, in
anticipation of the
previous plan for A-share
listing, based on an
agreed valuation of
RMB720,000,000 (i.e.
RMB11.6 per share),
taking into account the
business performance of
Zhonggan Communication
in 2019 and its future
prospects.
D u et oc h a n g eo fl i s t i n g
plan which led to change
in the agreed valuation of
Zhonggan Communication
to RMB500,000,000 and
thus the percentage of
equity interest to be
acquired by Rui Da Xin
T ao, on 6 March 2022,
Mr. Liu Haoqiong and Ms.
T ao Xiulan entered into a
supplemental agreement
to the repurchase
agreement with Rui Da
Xin T ao to, among other
things, transfer further
approximately 0.2%
equity interest in
Zhonggan Communication
t oR u iD aX i nT a oa tn i l
consideration to
compensate the
downward adjustment of
the valuation of
Zhonggan
Communication.
The original consideration
of RMB7,007,560 was
determined with reference
to the consideration paid
by Rui Da Xin T ao in
acquisition of shares in
Zhonggan Communication
b a s e do na na g r e e d
valuation of
RMB720,000,000 (i.e.
RMB11.6 per share),
taking into account the
business performance of
Zhonggan Communication
in 2019 and its future
prospects.
Due to change of listing
plan which led to change
in the agreed valuation of
Zhonggan Communication
to RMB500,000,000 and
thus the percentage of
equity interest to be
acquired by Shu Zhi
Shen Kong, on 6 April
2022, Mr. Liu Haoqiong
a n dM s .T a oX i u l a n
entered into repurchase
agreement with Shu Zhi
Shen Kong to, among
other things, transfer
further approximately
0.4% of equity interest in
Zhonggan Communication
to Shu Zhi Shen Kong at
nil consideration to
compensate the
downward adjustment of
the valuation of
Zhonggan
Communication.
Determined following
arm ’s length negotiations
between the parties with
r e f e r e n c et oa na g r e e d
valuation of Zhonggan
Communication of
RMB500,000,000.
Determined following
arm ’s length negotiations
between the parties with
reference to an agreed
valuation of Zhonggan
Communication of
RMB500,000,000.
Date on which
consideration was
fully settled: . . . . .
28 June 2020 28 December 2020 12 April 2022 12 April 2022
HISTORY AND REORGANISATION
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--- page 151 ---
Name of Pre-IPO
Investor Rui Da BVI Shu Zhi Cayman You Po BVI Ms. Yeung
Cost per Share (4) : . . HK$1.20 HK$1.20 HK$1.20 HK$1.20
Premium to mid-point
of the Offer Price
r a n g e : ........
Approximately 0.8% Approximately 0.8% Approximately 0.8% Approximately 0.8%
Use of proceeds: . . The Company has not
received any investment
amount from Rui Da BVI
as the investment was
effected by equity
transfer between Mr. Liu
Haoqiong and Rui Da Xin
Ta o
The Company has not
received any investment
amount from Shu Zhi
Cayman as the
investment was effected
by equity transfer
between Rui Da Xin T ao
and Shu Zhi Shen Kong.
As at the Latest Practicable Date, the Group has
fully utilised the proceeds as follows: (i) as to
approximately RMB18.0 million for prepayment for
labour procurement costs; and (ii) as to
approximately RMB9.8 million for repayment of
borrowings.
Shareholding in the
Company
immediately after
the completion of
Reorganisation
(1) :.
Approximately 0.6% Approximately 1.3% Approximately 4.3% Approximately 1.0%
Shareholding in the
Company
immediately after
the completion of
the Global
Offering
(1), (3) ....
Approximately 0.43% Approximately 1.00% Approximately 3.22% Approximately 0.75%
Special rights: . . . . Rui Da Xin T ao was
entitled to, (i) redemption
right, profit guarantee and
information right during
the Track Record Period,
a n d( i i )u pt oL i s t i n g ,t h e
right of first refusal,
preemptive right,
preferential right in
liquidation, anti-dilution
right and price adjustment
right. The redemption
right shall terminate upon
submission of listing
application to the Stock
Exchange.
Shu Zhi Shen Kong was
entitled to (i) redemption
right, profit guarantee and
information right during
the Track Record Period,
a n d( i i )u pt oL i s t i n g ,t h e
right of first refusal,
preemptive right,
preferential right in
liquidation, anti-dilution
right and price adjustment
right. All such special
rights shall terminate
upon submission of listing
application to the Stock
Exchange.
Nil Nil
Lock-up period: . . . Six months from the
Listing Date
S i xm o n t h sf r o mt h e
Listing Date
Six months from the
Listing Date
Six months from the
Listing Date
HISTORY AND REORGANISATION
– 142 –


--- page 152 ---
Notes:
(1) Date of investment refers to the date of the relev ant equity transfer agreement or capital injection
agreement. Shareholding is calculated on the basis of the number of Shares to be held by the Pre-IPO
Investors immediately after the completion of the Capitalisation Issue.
(2) The original consideration paid by Rui Da Xin T ao for acquisition of 863,000 shares, representing
approximately 1.3% of the shares in Zhonggan Communication of Zhonggan Communication, was
RMB10,010,800. On 14 December 2020, Rui Da Xin T ao entered into a share transfer agreement with Shu
Zhi Shen Kong to transfer 604,100 shares, representi ng approximately 0.9% of the shares in Zhonggan
Communication, to Shu Zhi Shen Kong for a cash consideration of RMB7,007,560. As such, the net
consideration paid by Rui Da Xin T ao was RMB3,003,240.
(3) Assuming that the Over-allotment Option is not exer cised and taking no account of any Shares to be issued
upon the exercise of any options which may be granted under the Share Option Scheme.
(4) The cost per Share is calculated by dividing the cons ideration each Pre-IPO Investor paid by the number of
Shares to be held by the Pre-IPO Investors immediately after completion of the Capitalisation Issue,
assuming an exchange rate of RMB1.0 to HK$1.1 and taking no account of any Shares to be issued upon
the exercise of any options which may be granted under the Share Option Scheme.
Sponsor ’sc o n f i r m a t i o n
The Sponsor has confirmed that the Pre-IPO Investment is in compliance with Chapter 4.2
of the Guide for New Listing Applicants published by the Stock Exchange effective from 1
January 2024 as the consideration for the Pre-I PO Investment was all settled more than 28 clear
days before the date of the first submission of the listing application to the Stock Exchange in
relation to the Listing and as there are no special rights granted to the Pre-IPO Investor that will
survive the Listing.
Public float
As each of Rui Da BVI (which is wholly-owned by Rui Da Xin T ao), Shu Zhi Cayman (which
is wholly-owned by Shu Zhi Shen Kong), Ying Hua BVI (which is wholly-owned by Ying Hua
Investment), You Po BVI (which is wholly-owned by You Po Investment) and Ms. Yeung will hold
less than 10% of the total issued share capital of the Company immediately following the
completion of the Capitalisation Issue and the Global Offering and each of them is independent
from and not connected with each other, they will not be considered as a substantial
shareholder of the Company upon completion of the Capitalisation Issue and the Global
Offering. Accordingly, the Shares held by each of Rui Da BVI, Shu Zhi Cayman, Ying Hua BVI,
You Po BVI and Ms. Yeung shall be considered as part of the public float for the purpose of
Rule 8.08 of the Listing Rules. Approximately 32.4% of the total issued capital of the Company
upon the Listing will be held by the public (as defined in the Listing Rules).
Compliance with laws and regulations
As confirmed by the PRC Legal Advisers, the Pre-IPO Investments were conducted in
compliance with all the applicable laws and regulations.
HISTORY AND REORGANISATION
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CORPORATE AND SHAREHOLDING STRUCTURE
The following charts illustrate the sharehold ing and simplified shareholding structure ( 1) immediately prior to the Reorganisation
and (2) immediately after the completion of the Reorganisation; and (3) immediately after the completion of the Capitalisation Issue
and the Global Offering (assuming that the Over-Allotment Option or any option which may be granted under the Share Option
Scheme is not exercised).
(1) Immediately before the Reorganisation

Oﬀshore
Onshore
48.3% 26.6% 7.1% 7.1% 4.3% 2.6% 1.3% 0.6% 1.1% 1.0%
100.0% 100.0% 100.0%
100.0%
Ms. Yeung
GLP
Software
Gantong
 Xiamen
Gantong
 Jiangxi GLP Technology
Zhonggan Communication
Mr. Liu
Haoqiong
Rui Da
Xin Tao
Shu Zhi
Shen KongYing Hua Investment Y ou Po CommerceMr. Liu
Dingyi
Mr. Liu
Dingli
Ms . Tao
Xiulan Sunny Hanmy
HISTORY AND REORGANISATION
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--- page 154 ---
(2) Immediately after the completion of the Reorganisation
70.0% 30.0%
74.9% 7.1% 4.3% 2.6% 1.3% 0.6% 1.0%
100.0%
100.0%
Of f shore
Onshore
100.0%
100.0%
100.0% 100.0% 100.0%
100.0%
GLP
Software
Zhonggan Communication
GLP Technology Gantong
 Jiangxi
Gantong
 Xiamen
Huat Huat You P o BVI Ying H ua BVI
The Company
Zhonggan BVI
Zhonggan HK
Jiangxi Zhongge
Ms . Y eungMr. Liu
Haoqiong
Ms . Tao
Xiulan Mr. Liu Dingli Y ou Po Investment
GT & Yangtze Shu Zhi Cayman Rui Da BV I
Ying Hua I nvestm ent Shu Zhi Shen Kong Rui Da
Xin Tao
8.2%
100.0% 100.0% 100.0% 100.0% 100.0%100.0%
Octuple Hills
Mr. Liu Dingyi
HISTORY AND REORGANISATION
– 145 –


--- page 155 ---
(3) Immediately after the completion of the Capitalisatio n Issue and the Global Offering (assuming that the Over-
Allotment Option or any option which may be granted under the Share Option Scheme is not exercised)

70.0% 30.0%
56.16% 5.33% 3.22% 1.95% 1.00% 0.43% 0.75% 25%
100.0%
100.0%
Of f shore
Onshore
100.0%
100.0%
100.0% 100.0% 100.0%
100.0%
GLP Technology Gantong
 Jiangxi
Gantong
 Xiamen
GLP
Software
Other public
Shareholders
The Company
Zhonggan BVI
Zhonggan HK
Jiangxi Zhongge
Zhonggan Communication
Shu Zhi Shen Kong Rui Da
Xin Tao Ms . Y eung
GT & Yangtze Huat Huat You Po BVI Ying Hua BVI Shu Zhi Cayman Rui Da BV I
Mr. Liu
Haoqiong
Ms. Tao
Xiulan Mr. Liu Dingli Y ou Po Investment Ying Hua Investment
6.16%
100.0% 100.0% 100.0% 100.0% 100.0%100.0%
Octuple Hills
Mr. Liu Dingyi
HISTORY AND REORGANISATION
– 146 –


--- page 156 ---
LISTING ON NEEQ AND NEEQ LISTING WITHDRAWAL
On 25 January 2017, all issued shares of Zhonggan Communication were listed and quoted
for trading on NEEQ (delisted, previous stock code: 870720). On 9 August 2019, the NEEQ
Listing Withdrawal was effective.
The market capitalisation of Zhonggan Communication at the time of the NEEQ Listing
Withdrawal was RMB149.70 million based on t he closing price of each share of Zhonggan
Communication of RMB2.05 on NEEQ and 73,014,600 share of Zhonggan Communication in
issue. Following the quotation of the shares of Zhonggan Communication on NEEQ, the
Directors found that the trading volume of the shares of Zhonggan Communication remained low
due to the fact that trading on NEEQ is restricted to qualified investors using a market maker
approach and its corporate profile was not enhanced with the shares of Zhonggan
Communication quoted for trading on NEEQ. Against this background, the Directors started to
explore the possibility of withdrawing the shares of Zhonggan Communication from NEEQ and to
list on other stock exchanges, which would allow it to have direct access to the capital markets
and build on its reputation to attract investors as well as to recruit, motivate and retain
management personnel.
The NEEQ Listing Withdrawal was approved by the majority shareholders at an
extraordinary general meeting of Zhonggan Communication held on 21 June 2019. As part of
the arrangements for the NEEQ Listing Withdrawal, on 24 June 2019, Ms. T ao Xiulan had
undertaken to purchase such number of shares of Zhonggan Communication at such prices from
the then minority equity holders of Zhonggan Communication, so that those shareholders could
realise their investments in Zhonggan Communication after the NEEQ Listing Withdrawal without
incurring any loss as compared with their investment cost. Such undertakings resulted in various
transfers of the shares of Zhonggan Communication which took place between June to August
2019. See the paragraphs under ‘‘Subsidiaries – Zhonggan Communication – Transfers of
shares of Zhonggan Communication following the NEEQ Listing Withdrawal ’’ for further
information.
As confirmed by the PRC Legal Advisers, the Listing Withdrawal was duly completed and
the necessary approvals had been obtained and (i) during the period in which the shares of
Zhonggan Communication were quoted on the NEEQ, Zhonggan Communication and its
directors were not involved in any breach or suspected breach of the applicable rules or
regulations of the NEEQ in any material aspects; and (ii) there has not been any matter that
needs to be brought to the attention of the regulators and investors in Hong Kong in respect of
Zhonggan Communication ’s quotation on the NEEQ.
On the basis of the above, along with searches performed by the Sole Sponsor, the Sole
Sponsor concurs with the view of the PRC Legal Advisers that during the period which the
shares of Zhonggan Communication were quoted on the NEEQ, Zhonggan Communication was
not involved in any breach or suspected breach of the applicable rules or regulations of the
NEEQ in any material aspects.
HISTORY AND REORGANISATION
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--- page 157 ---
Previous plan for A-share listing
After the NEEQ Listing Withdrawal, Zhonggan Communication entered into a pre-listing
tutoring engagement agreement in June 2020 with a sponsor, AVIC Securities Co., Ltd. （ 中航證
券有限公司 ）, registered with the CSRC (the ‘‘A-share Sponsor ’’) to explore the possibility of
listing of the shares of Zhonggan Communication to one of the two recognised stock exchanges
in the PRC.
As part of the preparation works for such preliminary listing plan, in July 2020, the A-share
Sponsor filed a notice of pre-listing tutoring for A-s hare listing application with the local office of
CSRC in Jiangxi Province. However, subsequently, the Directors decided to proceed with a
Listing on the Stock Exchange as this would (i) enable the Group to have direct access to
international markets, which in turn would provide the Group with a viable source of capital to
support its business growth; (ii) strengthen the Group ’s reputation, credibility and
competitiveness as the Stock Exchange is an established exchange with a longstanding
reputation as one of the leading stock exchanges g lobally; and (iii) facilitate the Group to attract
more investors as there are fewer companies of the same industry that are listed in Hong Kong.
In light of the above and taking into account the efficiency of the listing application process on
the Stock Exchange, the Directors decided not to proceed with A-share listing. On 24 December
2021, the A-share Sponsor filed a notice of cessa tion on the pre-listing tutoring with the local
office of CSRC in Jiangxi Province. No formal listing application has been submitted by
Zhonggan Communication to CSRC. On 27 December 2021, Zhonggan Communication
terminated the pre-listing tutoring engagement agreement with the A-share Sponsor in the PRC.
As the A-share Sponsor is not a corporation licensed or registered to carry out Type 6
(Advising on corporate finance) regulated activity under the SFO, which is one of the criterion to
act as a sponsor for listing in Hong Kong, nor does it have a group company operating in Hong
Kong which can satisfy the relevant requirement, the Company has engaged the Sole Sponsor
for the Listing. The A-share Sponsor confirmed that there was no disagreement with the
Company regarding the termination of the pre-l isting tutoring engagement with the A-share
Sponsor. The Directors further confirm that there are no matters relating to the pre-listing
tutoring of Zhonggan Communication that would affect the Company ’s suitability for the Listing
or otherwise require to be brought to the attention of the Stock Exchange and potential
investors. Based on the independent due diligence performed by the Sole Sponsor, the Sole
Sponsor is not aware of any matter relating to the Zhonggan Communication ’sp r e v i o u sp l a nf o r
A-share listing which would affect the Company ’s suitability for the Listing.
PRC REGULATORY REQUIREMENTS
The PRC Legal Advisers advised that the Reorganisation has been conducted in
compliance with applicable laws and regulations of the PRC and all necessary regulatory
approvals in connection with the Reorganisation have been obtained.
Foreign Investment Law
According to the Foreign Investment Law of the PRC （ 中華人民共和國外商投資法 ）, foreign
investment refers to investment ac tivities conducted directly or indirectly by foreign investors
including foreign natural persons, foreign enterprises or other foreign organisations in the PRC.
The PRC Legal Advisers confirmed that the business of Zhonggan Communication was not
HISTORY AND REORGANISATION
– 148 –


--- page 158 ---
listed under the Special Administrative Measures (Negative List) for Foreign Investment Access
(2022 Edition) （ 外商投資准入特別管理措施 ）（ 負面清單 ）（ 2022 年版 ））issued by MOFCOM and
NDRC. The PRC Legal Advisers further confirmed that since Zhonggan Communication was
converted into a sino-foreign joint venture at the time of the acquisition of 100% equity interest
of Zhonggan Communication by Jiangxi Zhongge, no approval from MOFCOM is required for the
aforesaid acquisition under the Foreign Investment Law of the PRC.
SAFE registration
Pursuant to SAFE Circular 37, (a) a PRC resident must register with the local SAFE branch
before he or she contributes assets or equity interests to an overseas special purpose vehicle
(the ‘‘Overseas SPV ’’) that is directly established or indirectly controlled by the PRC resident for
the purpose of conducting investment or financing, and (b) following the initial registration, the
PRC resident is also required to register with the local SAFE branch for any major change, in
respect of the Overseas SPV, including, among other things, a change of Overseas SPV ’sP R C
resident shareholder(s), the name of the Overseas SPV, terms of operation, or any increase or
reduction of the Overseas SPV ’s capital, share transfer or swap, and merger or division. In the
event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the
required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be
restricted from making profit distributions to the offshore parent and from carrying out
subsequent cross-border foreign exchange activities, and the special purpose vehicle may be
restricted in its ability to contribute additional cap ital into its PRC subsidiary. Furthermore, failure
to comply with the various SAFE registration requirements described above could result in
liability under PRC law for evasion of foreign exchange controls.
Pursuant to SAFE Circular 13, promulgated by SAFE and which became effective on 1
June 2015, the power to accept SAFE registration was delegated from local SAFE to local
banks where the assets or interests in the domestic entity are located.
As advised by the PRC Legal Advisers, each of Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr. Liu
Dingli and Mr. Liu Dingyi, who are known to the Company as being a PRC citizen, completed
the initial registration in compliance with the SAFE Circular 37 on 20 May 2022.
ODI REGISTRATION
Pursuant to the Measures for the Administration of Overseas Investment （《境外投資管理辦
法》）promulgated by the NDRC on 26 December 2017, and became effective on 1 March 2018
and the Administrative Measures for Overseas Investment by Enterprises （《企業境外投資管理辦
法》）promulgated by the MOFCOM on 6 September 2014 and became effective on 6 October
2014 (collectively, the ‘‘ODI Rules ’’), a domestic institution shall undergo registration procedure
for foreign investment in accordance with the provisions of the ODI Rules, which requires the
domestic institution to register with relevant authorities prior to its overseas direct investment
and obtain relevant record-filing, approval, certificate or permit.
As advised by the PRC Legal Advisers, the PRC ultimate corporate shareholders of the
Company, namely Ying Hua Investment, Shu Zhi Shen Kong, Rui Da Xin T ao and You Po
Investment have completed their overseas dir ect investment regist ration with Shenzhen
Development and Reform Commission on 29 August 2022, respectively, and have complied with
the relevant ODI Rules.
HISTORY AND REORGANISATION
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--- page 159 ---
OVERVIEW
Established in 2002, the Group is a reputable integrated service provider and software
developer headquartered in Jiangxi Province of the PRC and focuses on the provision of
T elecommunications Infrastructure Services and Digitalisation Solution Services. Since its
founding, the Group has established long and stable business relationships with the key players
in the telecommunications industry in the PRC including the Big Three, being the three largest
telecommunications network operators in the P RC, and the largest tele communications tower
infrastructure service provider in the world. According to the Ipsos Report, the Group ranked
third amongst all telecommunica tions network infrastructure construction and maintenance
services providers in Jiangxi Province in te rms of revenue in 2023, with a market share of
approximately 3.1%.
The telecommunications network in the PRC which comprises wired and wireless network
systems has undergone rapid development over the past few decades, and it is now one of the
most advanced and sophisticated network in the world. The network system is operated by
several state-owned telecommunications network operators in the PRC. These operators
continuously improve the network ’s performance and coverage through investment,
technological innovation, and market competition. T elecommunications Infrastructure Services
provided by the Group comprise Infrastructure Construction Services and Infrastructure
Maintenance Services and are mainly provided to telecommunications network operators.
Infrastructure Construction Se rvices mainly involv e the construction of telecommunications
networks and the supporting infrastructure including the construction of base stations, the
configuration of telecommunications equipment, the laying of cables, the construction of
electricity generation facilities and foundation works. Infrastructure Maintenance Services mainly
involve routine basic maintenance and repairs and restoration works for the telecommunications
networks as well as emergency troubleshooting in the event of network failure in order to ensure
the reliability and stability of the overall tel ecommunications network. These services are
essential for telecommunications operators to ensure their business to run smoothly while also
improving the service quality and user experience of the telecommunications network.
Driven by government policies, the PRC ’s 5G network has grown to be the largest in the
world in terms of the number of 5G base stations. 5G networks are characterised by high
bandwidth and data rates, low latency, broad coverage and massive connectivity which provide
significant benefit to digital technologies having broad applications in various digitalisation
scenarios, such as urban management, healthcare, education, transportation, agriculture, and
infrastructure management. Due to the widespread adoption of 5G networks and other
technological advancement in general, the Directors consider that the digitalisation solutions
which are currently underway will fundamentally change the way in which cities grow and
operate as well as the way of life of its residents. Leveraging its in-depth knowledge in the
telecommunications industry, s ince 2018, the Group has been providing Digitalisation Solution
Services to customers including telecommunications network operators, local governments,
quasi-government institutions, state-owned enterprises and private companies in the PRC. The
Digitalisation Solution Services provided by the Group comprise Integrated Solution Services,
System Maintenance Services and Software Solution Services. Digitalisation Solution Services
generally involve the provision of turnkey and other solutions encompassing system design,
software development, installation, implementation and commissioning for use in digitalisation
related projects which cover various sectors such as digital healthcare, digital education, digital
surveillance, digital government, digital industrial management and digital urban management.
For Integrated Solution Services, the Group provides and integrates hardware and software,
while for Software Solution Services, the Group provides and integrates software only. T o
complement the Integrated Sol ution Services, the Group also provides commissioned System
Maintenance Services to ensure the proper functioning of the hardware and software systems.
BUSINESS
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--- page 160 ---
The following table sets out a breakdown of the Group ’s revenue by business segments
during the Track Record Period:
Year ended 31 December
2021 2022 2023
Revenue
Percentage
of total Revenue
Percentage
of total Revenue
Percentage
of total
RMB’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 3 4 4 , 6 3 1 7 1 . 9 % 3 0 9 , 2 7 6 7 4 . 9 % 4 6 3 , 3 6 7 7 6 . 1 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ 2 5 , 1 6 0 5 . 3 % 3 3 , 2 2 4 8 . 0 % 3 7 , 9 9 0 6 . 2 %
S u b - t o t a l ............................................ 369,791 77.2% 342,500 82.9% 501,357 82.3%
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. 1 0 7 , 3 6 4 2 2 . 4 % 1 0 , 1 4 8 2 . 5 % 4 1 , 2 5 8 6 . 7 %
– S y s t e mM a i n t e n a n c eS e r v i c e s ............................ 1 , 9 6 3 0 . 4 % 2 , 0 4 4 0 . 5 % 4 7 0 0 . 1 %
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... –– 58,399 14.1% 66,216 10.9%
S u b - t o t a l ............................................ 109,327 22.8% 70,591 17.1% 107,944 17.7%
Total ............................................... 479,118 100.0% 413,091 100.0% 609,301 100.0%
The Group ’s revenue during the Track Record Period decreased from approximately
RMB479.1 million for the year ended 31 Decembe r 2021 to approximately RMB413.1 million for
the year ended 31 December 2022, representing a decrease of approximately 13.8%. For the
year ended 31 December 2023, the Group ’s revenue increased significantly to approximately
RMB609.3 million, representing an i ncrease of approximately 47.5%.
The Group ’s revenue during the Track Record Period was primarily generated from its
T elecommunications Infrastructur e Services business segment, in particular, its Infrastructure
Construction Services business sub-segment, for which its revenue had slightly decreased from
approximately RMB344.6 million for the year ended 31 December 2021 to approximately
RMB309.3 million for the year ended 31 December 2022, and then increa sed to approximately
RMB463.4 million for the year ended 31 December 2023, accounting for approximately 71.9%,
74.9% and 76.1% of the Group ’s total revenue, respectively. For the T elecommunications
Infrastructure Services business segment, th e Group had 261 Completed Projects during the
Track Record Period, and 109 On-going Projects and Pre-revenue Projects as at 31 December
2023.
The Group ’s revenue from its Digitalisation Solution Services business segment decreased
from approximately RMB109.3 million for the year ended 31 December 2021 to approximately
RMB70.6 million for the year ended 31 December 2022, and then increased to approximately
RMB107.9 million for the year ended 31 December 2023, accounting for approximately 22.8%,
17.1% and 17.7% of its total revenue, respectiv ely. For the Digitalisation Solution Services
business segment, the Group had 65 Completed Projects during the Track Record Period, and
seven On-going Projects and Pre-revenue Projects as at 31 December 2023.
BUSINESS
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COMPETITIVE STRENGTHS
The Group has a well-established operating history as a reputable integrated service
provider in Jiangxi Provinc e specialising in the provis ion of Telecommunications
Infrastructure Services in the PRC
The Group traces its history to 2002 and is a reputable integrated service provider in
Jiangxi Province specialising in the provision of T elecommunications Infrastructure Services in
the PRC. Since its establishment, and driven by the rapid development of telecommunications
infrastructure and networks in the PRC, the Group has expanded its reach to providing
T elecommunications Infrastructure Services to customers across the Central Region, Eastern
Region, Western Region and Northeastern Region. The Group ranked third amongst all
telecommunications network infrastructure construction and maintenance services companies in
Jiangxi Province in terms of revenue in 2023, with a market share of approximately 3.1%.
Over the years, the Group has established a proven track record in providing
T elecommunications Infrastructure Services to key players of the telecommunications industry in
the PRC, primarily large-scale state-owned enterprises, and accumulated extensive experience
through undertaking a wide range of T elecommunications Infrastructure Services projects,
including 261 Completed Proje cts during the Track Record Period and 109 On-going Projects
and Pre-revenue Projects as at 31 December 2023, involving Infrastructure Construction
Services and Infrastructure Maintenance Services with different nature, details of which are set
out in the paragraph headed ‘‘Principal services and business model – T elecommunications
Infrastructure Services ’’ in this section. As advised by Ipsos, most state-owned enterprises are
subject to a set of stringent procedures and conditions as well as robust selection criteria in
selecting suitable suppliers fo r their various projects. The selection criteria include, among
others, successful track record, scale and nature of projects undertaken, technical qualifications
and permits, financial and operational capabilities, resources allocation and cost effectiveness,
etc. The Directors believe that the competitive advantages possessed by the Group, to name a
few, its past experience and capabilities, its quality of services and its overall performance in
project execution and management, have all contributed to its success in securing projects from
its customers.
Furthermore, as a Jiangxi Province-based service provider, the Group ’s key competitive
edges lie in its deep understanding of the local market dynamics, technical requirements and
customers ’ expectations, as well as its ability to pro vide localised services through better
coordination of resources within the province, surpassing other nationwide service providers. In
particular, Jiangxi Province presents unique geographical complexities, characterised by diverse
terrains environment. Located in the Centra l Region, Jiangxi Province is mainly hilly and
mountainous with extensive basins and valleys. These geographical characteristics impose
greater challenges for certain types of infrastructure-related projects to be carried out in Jiangxi
Province when compared with other provinces and regions as it requires higher level of skills
and expertise plus effective project planning. The Directors believe that the Group possesses
the necessary skills and capabilities in overc oming such challenges given its proven track
record, and that the Group ’s extensive experience in undertaking T elecommunications
Infrastructure Services projects in Jiangxi Province serves as a significant advantage for the
Group to continue strengthening its market footprint and reputation within the province, and to
further expand into other regions such as Xinjiang Uygur Autonomous Region and Yunnan
Province, details of which are more particularly set out in the paragraph headed ‘‘Business
strategies – Continue to expand the Group ’s T elecommunications Infrastructure Services in the
Western Region of the PRC focusing on Xinjiang Uygur Autonomous Region and Yunnan
Province ’’in this section.
BUSINESS
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As a reputable service provider, the Group ’s customers during the Track Record Period in
respect of its T elecommunications Infrastruct ure Services business segment included the Big
Three (i.e. Customer A, Customer B and Customer D), being the three largest
telecommunications network operators in the PRC, with each of whom its business relationships
ranged from approximately five to 21 years. Customer A ranked as the PRC ’s largest
telecommunications service provider by revenue and number of fixed network and mobile
service subscriptions in 2023 and globally ranked first by revenue in 2023. For the year ended
31 December 2023, the revenue of i ts listed subsidiary was approx imately RMB1,009.3 billion. It
provides telecommunications services in 31 provinces, autonomous regions and directly-
administered municipalities throughout mainland China and in Hong Kong. Customer B ranked
as the PRC ’s second largest telecommunications network operator by revenue and number of
fixed network and mobile service subscriptions in 2023 and globally ranked eighth by revenue in
2023. For the year ended 31 December 2023, the revenue of its listed subsidiary was
approximately RMB513.6 billion. It offers emerging integrated information technologies such as
5G and cloud together with related applications for industrial internet, digital energy, digital
healthcare and digital parks. Customer D ranked as the PRC ’s third largest telecommunications
network operator by revenue and number of fixed network and mobile service subscriptions in
2023 and globally it ranked eleventh by revenue in 2023. For the year ended 31 December
2023, its revenue was approximately RMB372. 6 billion. It operates a wide range of services
including mobile broadband, fixed-line broadband, mobile voice, fixed-line voice, ICT , data
communications and other related value-added services.
In addition to the Big Three, during the Track Record Period the Group had also provided
T elecommunications Infrastructure Service s to Customer C. Customer C ranked as the world ’s
largest telecommunications tower infrastructure service provider and has operations across 31
provinces, municipalities and autonomous regions in the PRC. For the year ended 31 December
2023, its revenue was approximately RMB94 .0 billion. The business scope of Customer C
includes construction, mainten ance and operation of base station ancillary facilities such as
telecommunications towers, public network coverage in high-speed railways and subways, and
large-scale indoor distributed antenna systems.
According to the Ipsos Report, the market siz e of the telecommunications infrastructure
services industry grew from approximately RMB226.2 billion in 2019 to approximately RMB282.6
billion in 2023 and is expected to reach approximately RMB368 .2 billion by 2028. The growth
will be largely driven by the growth in demand for 5G services as more and more
telecommunications companies begin to roll out 5G services and as more and more technology
companies begin providing 5G- enabled wireless devices and 5G reliant applications. The
Directors believe that the Group ’s solid relationships with its in dustry leading customers is a
testament to its reputation and capabilities in continuously delivering high quality services that
are capable of catering to their exacting demands. Furthermore, the Directors believe that due to
its solid relationships with its customers and its i ndustry reputation, the Group is well-positioned
to capture the expected future demand for telecommunications infrastructure services in the
PRC which can generate consistent and continuous revenue to fuel the Group ’s future growth.
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The Group possesses diversif ied revenue base and service offerings and is capable of
capitalising upon emerging trends in the t elecommunications industry by offering
Digitalisation Solution Services
While the Group is principally engaged in the provision of T elecommunications
Infrastructure Services, sensing the growing demand for the use of 5G networks and digital
technologies to transform the way in which cities and businesses operate, the Group expanded
its business offerings in 2018 by providing Digitalisation Solution Services. The Group ’s
Digitalisation Solution Services mainly involve providing turnkey and other solutions that
integrate the latest digital technologies such as IoT , big data, cloud computing, discriminative AI
and/or blockchain technologies which are to be applied in different digitalisation related projects
relating to sectors such as digital healthcare, d igital education, digital surveillance, digital
government, digital industrial management and digital urban management and such other
services as may be specifically tailored for use in v arious sector-specific projects according to
the customers ’ needs. During the Track Record Period, the Group ’s gross profit from its
Digitalisation Solution Services business segme nt amounted to approximately RMB44.9 million,
RMB60.8 million and RMB75.2 million, representi ng approximately 49.2%, 58.8% and 50.3% of
its total gross profit, respectively.
According to the Ipsos Report, the Ministry of Housing and Urban-Rural Development of
the PRC issued the Interim Management Measures Management Guideline for Pilot National
Smart City （《國家智慧城市試點暫行管理辦法》）in 2022 to encourage the development of the
smart cities. With 5G networks gaining promine nce and replacing older networks, there will be
an increasing demand for digital technologies which can take advantage of the faster network
speeds, lower latency, increase d capacity and improved reliability to access information
especially given rising concerns over matters relating to public security, healthcare, food safety
and urban management which in turn will create new opportunities for Digitalisation Solution
Services. Digital technologies such as IoT sensors can be used to detect changes in the
environment, for example, the temperature and humidity in a digital grain depot system, and
digital security cameras that incorporate recognition software which can be used to detect and
identify people and have significant applications in security and policing.
T aking advantage of the Group ’s proven track record in undert aking T elecommunications
Infrastructure Services projects and business collaborations with the key players of the
telecommunications industry in the PRC, the Group has established mutual trust and deeper
understanding in the customers ’ specific needs, objectives and budget, and has gained better
insights as to the latest development in terms of technological advancement and adoption of
digital technologies in digitalisation related proj ects across various public and private sectors. In
order to capitalise on the growing demand for Digitalisation Solution Services in the PRC,
particularly Jiangxi Province, the Group began to conduct research and development of software
in 2019, sometimes with the assistance of third-party software programmers, to create its own
software and systems. The Directors believe that as a service provider of Digitalisation Solution
Services, the Group possesses a key understanding of the needs and concerns of its customers
and through the creation of its own software and systems it can better cater to those needs and
concerns, which in turn serves to distinguish the Group from its competitors in the field. As at
the Latest Practicable Date, the Group had registered over 120 software copyrights in the PRC
which are or may be material to the Group ’s business. For details, please refer to the paragraph
headed ‘‘Statutory and General Information – B. Further information about the Group ’s business
– 2. Intellectual property rights of the Group ’’in Appendix V to this prospectus.
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Furthermore, according to Ipsos, customers of digitalisation related projects are generally
more inclined to procure services from local service providers due to their familiarity with the
local business environment and connections with other stakeholders within the market.
Throughout the Track Record Period, the Group has been placing a strong focus in developing
the Digitalisation Solution Services busi ness segment in Jiangxi Province leveraging its
established eminence within the region, and as a result, the Group has successfully secured a
total of 63 Digitalisation Solution Services pro jects in Jiangxi Province, which were generally
obtained by way of single-source procurement or by responding to invitation to quote, through
which the customers had directly approached and invited the Group to offer its services. The
Directors believe that the Group ’s achievement was largely attrib utable to its reputation within
the telecommunications market in Jiangxi Province in which it has proven itself to be a one-stop
solutions provider by offering a mix of customised services ranging from Infrastructure
Construction Services, Infrastructure Mainten ance Services, Integrated Solution Services,
System Maintenance Services to Software Solution Services.
In view of the above, the Directors believe that the Group ’s diversified revenue base and
service offerings set it apart from many of its competitors in the field who may solely rely upon
the provision of T elecommunications Infrastructure Services to generate revenue and reduces
the risk of over reliance on a single business segment as a driver for growth. Furthermore, given
the increasing demand for Digitalisation Solution Services in the PRC, the Directors believe that
the Digitalisation Solution Services business segment will continue to grow and develop as a
key driver of revenue for the Group.
The Group has a long established busin ess relationships with its suppliers
The Group has over 20 years of operating history and as such it has developed stable
business relationships with a wide number of reliable suppliers including suppliers of labour,
hardware, third-party software a nd technical support services.
During the Track Record Period, the Group h ad made purchases from over 60 different
hardware and software suppliers, and the Group had engaged over 50 different labour suppliers.
Further, as at the Latest Practicable Date, the Group ’s approved list of labour suppliers contains
over 60 different labour suppliers from which the Group can engage for the supply of labour to
perform the requisite tasks. Additionally, its business relationships with each of its five largest
suppliers in each year during the Track Record Period ranged from approximately two to nine
years as at the Latest Practicable Date. Accordingly, the Directors believe that the Group ’s
network of suppliers will enable the Group to have ready and timely access to quality supplies
which will enable it to meet the demands of its customers, and similarly given the Group ’s
network of labour suppliers, not only can the Group ensure the sufficiency of labour in each of
its project locations, but also limit its long-term labour and overhead costs which is of significant
importance given the project-by-project nature of the Group ’s services while allowing the Group
to focus on the core aspects of its services, namely project planning, overall project
management and ensuring that the finished works are capable of meeting the standards and
requirements of its customers.
In all, the Directors believe that the Group ’s access to such a wide variety of steady
suppliers creates a solid foundation upon whi ch the Group can rely and utilise to build and
expand its business.
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Experienced management team
The Group is led by an experienced management team, each member of whom possesses
significant industry knowledge and has been instrumental to the development of the Group. Mr.
Liu Haoqiong, a co-founder of the Group and also an executive Director and the chairman of the
Board, has more than 20 years of experience in the telecommunications infrastructure services
industry. The remainder of the Group ’s management team comprises its executive Directors (Mr.
Peng Shengqian, Ms. Xie Xiaolan, Mr. Liu Dingli, Mr. Liu Dingyi and Mr. Zhou Zhiqiang) and
senior management (Mr. T seung Yat Ming), each of whom is well experienced and possesses
diverse expertise and skills that covers ar eas such as management, finance, business
development and sales and marketing. The Directors believe that, given the industry knowledge
and experience of the management team, the Group will be able to respond to and cope readily
with the changing conditions in the telecommunications industry. For further information on the
experience and credentials of the management team, please refer to the section headed
‘‘Directors and Senior Management ’’in this prospectus.
BUSINESS STRATEGIES
Continue to expand the Group ’s Telecommunications Infrast ructure Services in the
Western Region of the PRC focusing on Xinjiang Uygur Autonomous Region and Yunnan
Province
The Group has been one of the key players in the telecommunications network
infrastructure construction and maintenance services industry in Jiangxi Province of the PRC
and ranked third in Jiangxi Province amongst all players in terms of revenue in 2023. While the
Group would continue to devote resources and efforts to developing its T elecommunications
Infrastructure Services business segment in Jiangxi Province, in order to further enhance its
competitiveness and market share in the PRC, the Group is committed to expanding its
T elecommunications Infrastructure Services business segment to other regions of the PRC, in
particular the Western Region. The Directors believe that the telecommunications infrastructure
services industry in the Western Region of the PRC, particularly in Xinjiang Uygur Autonomous
Region and Yunnan Province, is highly competitive and driven by the region ’ss t r a t e g i c
importance in the Belt and Road Initiative and government support for infrastructure
development. The industry is experiencing significant growth as it focuses on enhancing
connectivity, deploying advanced technologies such as 5G networks, and supporting regional
economic development. Companies that can offer innovative solutions, forge strategic
partnerships, and navigate the unique challenges of the region are well-positioned to capitalise
on the expanding market opportunities in the telecommunications infrastructure services industry
in the Western Region of the PRC. As such, the Directors believe that it will be in the Group ’s
interests to broaden its geographical outreach and improve its market penetration in the Western
Region, particularly in Xinjiang Uygur Autonomous Region and Yunnan Province, for the reasons
set out below:
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Xinjiang Uygur Autonomous Region
Xinjiang Uygur Autonomous Region, is an autonomous region located in northwestern
China and the country ’s largest province-level division by area, sharing borders with eight
countries including Kazakhstan, Kyrgyzstan, T ajikistan, Afghanistan, Pakistan, India, Russia,
and Mongolia. Its strategic location makes Xinjiang Uygur Autonomous Region a transportation
and logistics hub in China ’s Belt and Road Initiative, which seeks to connect China with
countries across Asia, Europe, and Africa through a network of infrastructure projects, such as
railways, highways, ports, and flight routes. Moreover, Xinjiang Uygur Autonomous Region is
also positioned as an important centre for the development of the digital economy and the
telecommunications industry under the Belt and Road Initiative. Government policies in Xinjiang
Uygur Autonomous Region such as the ‘‘Five-Year Planning for the Development of 5G
Infrastructure in Xinjiang Uygur Autonomous Region ’’* （《新疆維吾爾自治區5G通信基礎設施專項
規劃（ 2021-2025 年 ）》） set the goal to accelerate the development of smart cities, smart
communities, smart industrial parks as well as 5G commercial applications across various
sectors such as digital healthcare, digital education, digital industrial management, digital urban
management, digital agriculture and digital transportation with over 70 pilot projects. All these
initiatives rely on the support of an established 5G telecommunications infrastructure which
advances with time.
According to the Ipsos Report, the local government in Xinjiang Uygur Autonomous Region
devoted significant amount of investment to telecommunications infrastructure to facilitate the
development of 5G networks in Xinjiang Uygur Autonomous Region, which amounted to
approximately RMB1.7 billion, RMB1.7 billi on and RMB1.8 billion in 2021, 2022 and 2023,
respectively, and is expected to be approximate ly RMB1.0 billion in 2025 . Until December 2023,
the number of 5G base stations built in Xinjiang Uygur Autonomous Region had reached 54,000,
covering most of the geographical areas within the region. It is expected that in 2025, the
penetration rate of 5G networks will become approximately 19.5 5G base stations for every
10,000 people within Xinjiang Uygur Autonomous Region. In light of this, the development of 5G
networks in Xinjiang Uygur Autonomous Region is expected to drive even greater demand for
telecommunications infrastructure in the region as a dependable and robust infrastructure
network is paramount for reaching the objective of advancing its telecommunications industry,
thereby taking on its strategic role in the Belt and Road Initiative.
The competitive landscape of the telecommunications infrastructure services industry in
Xinjiang Uygur Autonomous Region is similar to that of other provinces and regions within the
PRC, comprising of both national players and local players. According to the Ipsos Report, by
2023 there were approximately 22 and six active players in the Xinjiang Uygur Autonomous
Region market possessing First Tier Communications Project Implementation General
Contracting Enterprises Qualification （ 通信工程施工總承包 ）(Class 1), each of whom had won
telecommunications infrastructure construction services and/or maintenance services projects
with an aggregate amount of approximately over RMB20.0 million and RMB50.0 million,
respectively, over the period from 2022 to 2023. Despite the seemingly fragmented market in
Xinjiang Uygur Autonomous Region, the expansive geographical area of Xinjiang Uygur
Autonomous Region, which is approximately 10 times the area of Jiangxi Province, necessitates
a higher number of telecommunications infrastructure service providers to accommodate the
development needs within the region. In addition, as advised by Ipsos, in comparison to the
infrastructure construction serv ices projects, service providers are less inclined to take part in
infrastructure maintenance services projects due to the complex landscape of Xinjiang Uygur
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Autonomous Region which consists of deserts, mountains and oases, imposing challenges on
service providers in managing and carrying out the labour-intensive infrastructure maintenance
works. The Directors believe that the Group possesses competitive advantages in capturing the
market demand considering the special feature of the telecommunications infrastructure services
industry in Xinjiang Uygur Autonomous Region because of the Group ’s experience in
overcoming such challenges given its proven track record in completing T elecommunications
Infrastructure Services projects in Jiangxi Province, which is also known to have unique
geographically complexities, characterised by diverse terrains environment, thus requiring a
higher level of skills and expertise as well as effective project planning. For details, please refer
to the paragraph headed ‘‘Competitive strengths – The Group has a well-established operating
history as a reputable integrated service provider in Jiangxi Province specialising in the
provision of T elecommunications Infrastructure Services in the PRC ’’in this section.
The Group has recently started expanding its T elecommunications Infrastructure Services
business segment into Xinjiang Uygur Autonomous Region as at the Latest Practicable Date. In
view of the growth potential for this area as explained above, the Directors believe that Xinjiang
Uygur Autonomous Region ’s future development will present significant business opportunities
for the Group ’s T elecommunications Infrastructure Services business segment under the Belt
and Road Initiative. In addition, after adequate development of the telecommunications
infrastructure in Xinjiang Uygur Autonomous Reg ion, it is likely for Xinjiang Uygur Autonomous
Region to experience high growth rate in its smart city development that the Group might also
be able to benefit from. According to the Ipsos Report, as the demand for high-speed and
reliable telecommunications services continues to increase in the region, there will be growing
demand for advanced services and applications such as cloud computing, big data and IoT . As a
result, Xinjiang Uygur Autonomous Region has been identified as one of the most important
areas for the Group ’s future business expansion.
Yunnan Province
Yunnan Province is actively developing its digital economy, with initiatives such as the
‘‘14th Five-Year Information and Communi cation Industry Development Plan of Yunnan
Province ’’*（《‘‘十四五’’雲南省信息通信行業發展規劃》）promulgated by the end of 2021 which
focuses on bringing the development of the telecommunications industry in Yunnan Province to
the next level by advancing the establishment and development of a comprehensive digital
infrastructure network across the province. It plans to invest in the construction of high-speed
broadband networks, 5G networks, and other advanced telecommunications infrastructure to
support the development of e-commerce, digital services, and other innovative industries. It sets
a target to complete 150,000 5G base stations and 3.25 million kilometres of network optical
cable connections within the province by 2025. The 14th Five-Year Plan also emphasises the
collaboration and integration with the ‘‘Digital Yunnan ’’（ 數字雲南 ）initiatives, which aim to boost
the digital transformation and technology development across multiple sectors. In 2023, the
Office of the Leading Group for the Construction of Digital Yunnan announced that Yunnan
Province will accelerate the construction of Digital Yunnan in six aspects, including consolidating
new infrastructure, building a collaborative and efficient digital government, vigorously
developing digital economy, building a shared digital society, and vigorously attracting and
training digital talents. According to the Ipsos Report, there are currently over 200 5G relevant
commercial application projects implemented in Yunnan Province, which include projects relating
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to digital healthcare, digital education, digital industrial management, digital agriculture, digital
grain depot and digital tourism. The provincial government also sets to develop three to five 5G-
enabled digital factory as pilot projects.
Additionally, Yunnan Province, being the most southwestern province in the PRC, shares
borders with the Southeast Asian countries including Myanmar, Laos and Vietnam. T aking
advance of its geographical location, the PRC government has pledged to support Yunnan
Province to become the gateway to the vast market of South and Southeast Asian countries. As
advised by Ipsos, in response to the government initiatives, the Big Three and the world ’s
largest telecommunications tower infrastructure service provider in 2022 are expanding their
services to South and Southeast Asian countries via Yunnan Province. Until 2023, 13 cross-
border transmission optical cables have been built connecting operators in Laos and Myanmar
to offer broadband services to foreign countr ies. The Big Three are also committed to devote
additional resources to developing the telecommunications industry in Yunnan Province, which
sets the ground for the province to become the digital hub connecting South and Southeast
Asia. For example, Customer A is carrying out the construction of a dedicated internet data
channel in Kunming, which will further enhance the export-oriented international communication
and data communication service capabilities for the region. T o speed up rural vitalisation,
Customer B launched a digital application that offers rural governance with the use of 5G and
other advanced technology in the country, in which Yunnan Province actively participated with
over 42 counties taking part in it, providing digital governance to over 2,300 villages and
300,000 rural families within the province.
The competitive landscape of the telecommunications infrastructure industry in Yunnan
Province is similar to that of other provinces and regions within the PRC, comprising of both
national players and local players. According to the Ipsos Report, by 2023 there were
approximately 15 and seven active players in Yunnan Province market possessing First Tier
Communications Project Implementation General Contracting Enterprises Qualification （ 通信工程
施工總承包 ）(Class 1), each of whom had won telecommunications infrastructure construction
services and/or maintenance services projects with an aggregate amount of approximately over
RMB20.0 million and RMB50.0 million, respec tively, over the period from 2022 to 2023.
The Group ’s business operations in Yunnan Province had been one of the key contributors
to its performance in the Western Region during the Track Record Period. During the Track
Record Period, the Group has undertaken 27 Infrastructure Construction Services projects and
three Infrastructure Maintenance Services projects in Yunnan Province. The revenue generated
from these projects accounted for approximately 9.9%, 25.1% and 9.5% of the Group ’s total
revenue from its T elecommunications Infrastructure Services business segment during the Track
Record Period, respectively, which lays the foundation for the Group to further develop its
T elecommunications Infrastructure Services business segment by capturing the expanding
market opportunities in Yunnan Province in view of the various measures implemented within
the province as abovementioned. The Directors believe that Yunnan Province ’s relatively
underdeveloped telecommunications infrastructure presents promising prospects for the Group ’s
T elecommunications Infrastructure Services business segment. Therefore, the Group will
continue to focus on pursuing business opportunities in the rapidly developing
T elecommunications Infrastruct ure Services industry in Yunnan Province which the Directors
believe would enable it to capitalise on rising demands for telecommunications infrastructure
services.
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Selectively pursue strategic acqu isitions to stre ngthen the Group ’s Digitalisation Solution
Services
According to the Ipsos Report, the quality of d aily life can be enhanced by applying digital
technologies across multiple areas such as healthcare, personal and public safety, living and
business environment, public services, transportation and utilities involving various sectors such
as digital healthcare, digital government and di gital surveillance. As a result of the benefits of
smart technologies, the market value of the digitalisation solution services industry in the PRC
for the period from 2019 to 2023 grew from approx imately RMB2,351.9 billion to approximately
RMB3,709.3 billion representing a CAGR of approximately 12.1%. Further, the market value of
t h ed i g i t a l i s a t i o ns o l u t i o ns e r v i c e si n d u s t r yi se x p e c t e dt og r o wf o rt h ep e r i o df r o m2 0 2 4t o2 0 2 8
from approximately RMB4,063.0 billion to appr oximately RMB5,729.4 billion representing a
CAGR of approximately 9.0%. The continuous growth in the market value of the digitalisation
solution services industry has also been driven by the increasing urbanisation rate in the PRC
due to high income, job prospects and standards of living in urban areas which has led cities to
adopt digital technologies in hopes of spurring further economic development and improving the
quality of life for its residents while maintaining sustainable development. Further, the PRC
government policies have also bolstered the development of the digitalisation solution services
industry through the 13th and 14th Five Year Plan for National Informatisation* （ ‘‘十三五’’及‘‘十四
五’’國家信息化規劃 ）which placed focus on developing the nation into a self-reliant technological
powerhouse. In addition, it is noted in the Ipsos Report, the rapid development of digital
surveillance solutions since the ‘‘The 14th Five-Year Plan for National Informatisation ’’*（《‘‘十四
五’’國家信息化規劃》）showed that the PRC has gradually shifted to a pan-security era in which
the implementation of digital surveillance s olutions have extended to transportation,
construction, property and other sectors to build up a comprehensive security paradigm and
grid management nationwide.
Due to the increasing applicability of digital te chnologies, since 2018, the Group has begun
providing Digitalisation Solution Services to t elecommunications network operators, local
governments, quasi-government institutions, state-owned enterprises and private companies.
Under its Integrated Solution Services business sub-segment, the Group provided ‘‘ready to use ’’
customised turnkey and other solutions for use in digitalisation related projects. The Group ’s
Digitalisation Solution Services business segment, particularly the Integrated Solution Services
business sub-segment, recorded a significant decrease in revenue of approximately 35.4%, from
approximately RMB109.3 million for the year ended 31 December 2021 to approximately
RMB70.6 million for the year ended 31 December 2022. The decrease was primarily attributable
to the Group ’s prioritisation of Software Solution Services projects over Integrated Solution
Services projects, taking into account the customers ’ demand and the limited resources
available during that period. By focusing on Software Solution Services projects, the Group
avoided substantial capital requirements for hardware and equipment purchases associated with
Integrated Solution Services projects, thereby enhancing its liquidity. Despite the decrease in
revenue, it is crucial to highlight the noteworthy i ncrease in gross profit within the Digitalisation
Solution Services business segment. Gross pro fit for the Digitalisation Solution Services
business segment increas ed significantly from approximate ly RMB44.9 million to approximately
RMB60.8 million during the same period. The increase can be mainly attributable to the high
profitability in the Software Solution Servi ces business sub-segment. Furthermore, the
Digitalisation Solution Services business segment experienced positive growth in the number of
projects. The number of new projects increased from 11 for the year ended 31 December 2021
to 22 for the year ended 31 December 2022 and 28 for the year ended 31 December 2023.
Additionally, the project backlog in the Digitalisation Solution Services business segment
demonstrated growth, increasing from approximately RMB10.5 million as at 31 December 2021
to approximately RMB23.8 million as at 31 December 2022.
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The Directors maintain unwavering confidence in the growth potential of the Group ’s
Digitalisation Solution Services business segment despite the revenue decrease resulting from a
shift in focus. It can be evidenced by the increase in revenue from the Digitalisation Solution
Services business segment for the year ended 31 December 2023, which recovered to
approximately RMB107.9 million, r epresenting an increase of app roximately 52.9% as compared
to that for the year ended 31 December 2022. Such increase was primarily driven by an
increase in the number of Integrated Solution Services projects and Software Solution Services
projects. The Group intends to continue expanding its Digitalisation Solution Services business
segment in the future. This confidence is supported by various factors, including government
support, the increasing adoption of technology, and ongoing urbanisation and infrastructure
development. Furthermore, GLP Software was certified as a Double-soft Enterprise* （ 雙軟企業 ）
in 2023, which demonstrates its strength and c apability in research and development. These
factors create a favourable environment for the growth and expansion of the Digitalisation
Solution Services business segment. According to the Ipsos Report, the digitalisation solution
services industry is expected to experience rapid growth, with a CAGR of approximately 9.0%
from 2024 to 2028. This positive outlook of the industry further supports the Directors ’
confidence in the sector ’s potential. During the Track Record Period, most of the Group ’s
Digitalisation Solution Services projects were based in Jiangxi Province and while the Group
anticipates that it will continue to rely on and capture business opportunities in Jiangxi Province,
the Directors believe that it is in the Group ’s interest to expand to other markets in view of the
overall size and the expected growth of the digitalisation solution services industry in terms of
market value in other provinces and regions of the PRC.
In light of the above, the Group has considered expanding to other provinces and regions
of the PRC and has resolved to expand its offerings of Digitalisation Solution Services outside
Jiangxi Province. In deciding this direction of expansion, the Directors have taken into
consideration both the Group ’s accumulated experience and the market potential of different
provinces and regions in the PRC.
Sector-focused approach in developing Digitalisation Solution Services business segment
Based on its experience in developing the Digitalisation Solution Services business
segment and the efforts it devoted to conducting software research and development, the Group
has accumulated considerable experience in offering Integrated Solution Services and Software
Solution Services in primarily four main sectors within Jiangxi Province, namely, (i) digital
healthcare, for which the Group aims to provide hospital management platforms with integrated
hardware systems and advanced software tech nologies to achieve the automisation and
optimisation of the functional requirements and routine tasks of hospitals and other medical
institutions; (ii) digital education, for which the Group aims to elevate the educational quality and
resources allocation efficiency by enhancing synchronisation and storage of data and facilitating
knowledge exchange; (iii) digital surveillance, for which the Group aims to provide innovative
solutions in capturing and managing surveillance data and to enhance the digitalisation of urban
cities; and (iv) digital government, for which the Group aims to streamline the organisational
processes across various public administration functions so as to achieve a desirable and
efficient governance environment. For the Group ’s Digitalisation Solution Services business
segment, the Group had 61 Completed projects during the Track Record Period, and nine On-
going Projects and Pre-revenue Projects as at 31 December 2023, covering the abovementioned
sectors.
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Reasons for expanding to Guangdong Province and Anhui Province markets
Considering the Group ’s track record in providing Digita lisation Solution Services within
Jiangxi Province, the Directors are attracted by the market potentials of Guangdong Province
and Anhui Province in each of which the Directors believe that the Group would be able to
leverage its industry experience and tec hnological savvy in capturing new business
opportunities. According to the Ipsos Report, Guangdong Province has a high urbanisation rate
and the highest GDP amongst all provinces in the PRC. Further, it also has one of the largest
base for tertiary industries and is a leading technology hub with significant high-tech
manufacturing. Therefore, Guangdong Province has a vested interest in staying at the forefront
of technological advancement and innovation to maintain its leadership and competitiveness in
those aspects. As for Anhui Province, while its economy is comparatively smaller than that of
Guangdong Province, it is home to multiple economic and technological development zones as
well as a large cluster of leading PRC appliance manufacturers. Therefore, by embracing digital
city technologies, the Directors believe that Anhui can enhance its manufacturing capabilities by
integrating advanced technologies such as IoT and automation into its existing industries, which
will increase the province ’s competitiveness nationally and globally and attract further
investment. Due to the above reasons, it is expected that both local governments and
businesses will be highly willing to adopt digital technologies which will drive the demand for the
Group ’s Digitalisation Solution Services. The market value for the digitalisation solution services
industry in both Guangdong Province and Anhui Province is expected to achieve a
commensurate growth potential when compared to that in Jiangxi Province. The market value of
the digitalisation solution services industry in Guangdong Province and Anhui Province in 2022
was approximately RMB3 66.8 billion and RMB125.5 billion res pectively, whilst the market value
of the digitalisation solution services industry in Jiangxi Province in 2022 was approximately
RMB86.4 billion. Further, the market value of the d igitalisation solution services industry in
Guangdong Province and Anhui P rovince is expected to reach ap proximately RMB581.8 billion
and RMB199.6 billion respectively in 2027, rep resenting a CAGR of approximately 9.5% and
9.6% from 2023 to 2027, respectively, whilst the market value of the digitalisation solution
services industry in Jiangxi Province is expec ted to reach approximately RMB136.7 billion in
2027, representing a CAGR of approximately 9.2% from 2023 to 2027.
Guangdong Province
Furthermore, according to the Ipsos Report, there have been attractive growth potentials
for expansion of the Group ’s Digitalisation Solution Services business segment into Guangdong
Province and Anhui Province. In Guangdong Province, it is anticipated that the key growth
sectors will be digital surveillance and digital government due to the acceleration in adoption of
digital technologies in Guangdong-Hong Kong-Macao Greater Bay Area following the ‘‘The 14th
Five-Year Plan for National Informatisation ’’* （《‘‘十四五’’國家信息化規劃》）. With the support of
government policies, such as the ‘‘Key T asks for Digital Government Reform and Construction in
Guangdong Province 2022 ’’*（《廣東省數字政府改革建設2022 年工作要點的通知》）, ‘‘Digital
Economy Promotion Regulations in Guangdong Province* （《廣東省數字經濟促進條例》）,a n dt h e
‘‘Guangdong Province Action Plan for the Development of New Generation Artificial Intelligence
Innovation (2022~2025) ’’*（《廣東省新一代人 工智能創新發展行動計劃（ 2022-2025 年 ）》）,s t r o n g
focus has been placed on the development and adoption of AI technologies and IoT equipment
in the field of security which fosters the ecosystem of digital surveillance equipment within the
province. Further, the Guangdong Provincial Department of Science and T echnology and the
Department of Industry and Information T echnology also announced in 2022 that one of its key
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development areas in becoming a smart city would be the acceleration of itself in transforming
from ‘‘e-government ’’to ‘‘smart government ’’by making use of advanced technologies to facilitate
system and data integration data mining and knowledge management for improvement of
governmental efficiency. It is therefore anticipated that technology innovation and digital
transformation would be observed in Guangdong Province, driving the demand for digitalisation
solution services in various key sectors, including the digital surveillance and digital government
sectors.
Anhui Province
In as early as 2017, the Anhui ’s provincial government published ‘‘T h e1 3 t hF i v e - Y e a rP l a n
for Informatisation Development Planning Notice for Anhui Province ’’*（《安徽省十三五信息化發展
規劃的通知》）. Under the objective of ‘‘Smart Anhui ’’, the aim was to become one of the national
leaders in the level of informatisation by promoting wide application of information technology in
economic, social, cultural and other areas. In particular, a series of key actions were identified
including:
 the ‘‘Internet + Government Service ’’ initiative: implementat ion of a unified digital
government affairs platform which serves to enhance the public service efficiency,
improve service quality and increasing public users ’ satisfaction as part of the
government ’s action plans to transform from the traditional governance mode to an
integrated intelligent and collabo rative governance in the new era;
 the ‘‘Internet + Education Inclusion ’’ initiative: the upgrading of the education
information infrastructure construction and the acceleration of the full implementation
of the construction and application of schools with digital education related
technologies; and
 the application of new generation information technology for the medical and
healthcare sectors initiative: the construc tion of a distanced medical service platform
and related application systems whereby patients and medical and healthcare
services providers can be connected over the Internet.
On top of the initiatives abovementioned, in 2020, the provincial government of Anhui
Province further published the ‘‘Anhui Province Digital Government Construction Plan (2020-
2025) Notice ’’*（《安徽省「數字政府」建設規劃（ 2020 －2025 年 ）的通知》）, which introduced
additional policies incentivising the technological advancement in various sectors, including the
digital healthcare, digital education and digital government sectors. For example, for digital
government, the ‘‘Wanshitong ’’*（ 皖事通 ）mobile application operated by the government has
allowed the Anhui residents and corporations access to over 1,500 types of public services
conveniently. Through the adoption of cloud-based technology at municipalities-vis-province
levels, it further facilitates the collection and analysis of big data relating to the government
affairs in Anhui. For digital healthcare, the focus would be on the continuous improvement of the
national health information online platform which aims to optimise the provision of hospital and
doctor consultation services for patients and elderly with chronic diseases, and to strengthen the
home-based intelligent servi ces for emergency assistance and rehabilitation care for the
disabled. For digital education, the Anhui ’s provincial government has encouraged the use of AI-
related and IoT technologies across the classrooms with the purpose of creating a digitalised
and creative learning environment for students.
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Commercial rationale for strategic acquisitions
Recognising the significance of timing in capitalising on market opportunities and gaining a
competitive advantage, the Directors intend to pursue an acquisition strategy through acquisition
of established companies with proven record in the provision of digitalisation solution services
particularly those focusing on the digital sur veillance and digital government sectors in
Guangdong Province, and digital healthcare, digital education and digital government sectors in
Anhui Province, respectively, as opposed to establishing new subsidiaries in these provinces.
This approach offers several benefits, including immediate market entry, access to an existing
customer base, an established reputation, and market intelligence and expertise.
Acquiring an established company allows for immediate market entry, bypassing the need
to start from scratch, which can be time-consuming and resource-intensive. Furthermore,
acquiring a company provides access to its existing customer base, ensuring an immediate
revenue stream and eliminating the need to build a customer base from scratch. During the
Track Record Period, the Group ’s Digitalisation Solution Services projects were generally
obtained by way of single-source procurement or by responding to invitation to quote, which
according to the Ipsos Report, is not uncommon for digitalisation solution services projects to be
obtained in such a way. For single-source procurement or invitation to quote, the customer
would directly invite service providers to offer its services as opposed to organising a tender.
Leveraging the acquired company ’s customer relationships enables the Group to establish its
reputation in the target markets more rapidly. Additionally, acquiring a company with an
established reputation in the target market can expedite market acceptance and facilitate the
adoption of the Group ’s services. Further, as digitalisation solution services are highly
dependent on the service provider ’s technical skills in providing advice and customised
solutions, a high degree of understanding of the customer ’s business as well as their operational
need is necessary for the service provider to obtain new business from the customer. According
to the Ipsos Report, customers of digitalisation related projects are generally more inclined to
procure local service providers due to their fam iliarity with the local bu siness environment and
connections with other stakeholders within the market. Therefore, acquiring a company that
possesses market intelligence in the target ma rket and research and development capabilities
can provide a significant advantage. The acquired company ’s understanding of local market
dynamics, customer preferences, and cultural nuances can help the Group navigate the new
market more effectively, reducing risks associated with market entry. Moreover, the research and
development personnel and technical expertise of the acquired company can strengthen the
Group ’s capabilities, enabling the provision of more competitive services and products.
Given that the Group did not undertake any Digitalisation Solution Services projects during
the Track Record Period in either Guangdong Province or Anhui Province, its market reputation
in these two markets is comparatively limited. As discussed above, pursuing acquisition strategy
presents valuable opportunities for the Group to expedite market entry, capitalise on existing
customer bases, establish a strong reputation, gain market intelligence, and enhance research
and development capabilities. These advantages provide the Group with accelerated growth
potential and a competitive edge in target markets. In contrast, pursuing organic growth in a new
market may entail initial start-up costs and expose the Group to risks associated with
establishing a new subsidiary or branch from scratch. These risks include navigating potentially
different business climates and the need to allocate significant existing resources to nurture the
new entity. Drawing from the Group ’s past experiences in establishing branch offices in markets
like Guizhou Province, Shanghai, and Zhejiang Province, the Directors consider that organic
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growth in new markets is a time-consuming process. It typically takes more than three years to
establish a presence and build a reputation. This timeline encompasses various activities, such
as setting up local offices or subsidiaries, recrui ting and training suitable personnel (with a focus
on sales, marketing, and research and development), establishing business connections,
conducting sales and marketing efforts, and engaging in business development activities.
However, the lengthy process of organic growth poses the risk of missing out on opportunities in
rapidly growing industries. While organic growth allows for gradual expansion and operational
control, it may not align with the speed of growth required to capitalise on market opportunities.
Waiting for the organic growth process to unfold could result in falling behind competitors who
leverage acquisitions or other strategies for faster market entry.
Selection criteria for potential targets
Aside from the geographical location of the potential acquisition targets, the Group would
take into account various other selection criteria on which to evaluate potential acquisition
targets that are set out below:
(a) Qualification requirements – It is intended that the target companies should possess
the qualifications as a ‘‘Double-Soft Enterprise* （ 雙軟企業 ）’’,b e i n gt h e ‘‘Software
Product Certificate* （ 軟件產品登記證書 ）’’ and the ‘‘Software Enterprise Certificate* （ 軟
件企業證書 ）’’, which would allow the certifications holder to enjoy tax benefits and are
considered as recognitions of research and development capabilities.
(b) Financial and operational track record – It is preliminarily intended that each of the
target companies should (i) have had achieved a net profit of at least approximately
RMB10.0 million, and (ii) have secured at lea st approximately three digitalisation
solution services projects with the Big Three, for each of the three most recent
financial years.
The Group will carefully consider and evaluate each potential target to ensure that it can
integrate with and generate synergy with the Group ’s existing business. After identifying
potential target companies based on the aforementioned criteria, the Group will conduct a
detailed due diligence analysis on the target which includes conducting feasibility studies,
financial analysis and reviewing relevant contracts, approvals and licences. The Group may also
engage legal advisers to advise on any potential legal issues in relation to the investment or
acquisition to ensure that the investment or acquisition and operation of the target will not lead
to any non-compliance issues or violation of laws and regulations. As advised by Ipsos, based
on the criteria there are approximately over 100 software development companies offering
solution services in relation to digital surveil lance and/or digital government in Guangdong
Province in 2022, and approximately 70 software development companies offering solution
services in relation to digital healthcare, digital education and/or digital government sectors in
Anhui Province in 2022. As at the Latest Practicable Date, the Group had not identified any
particular target companies, commenced an y due diligence process nor entered into any
definitive agreement in relation to the above acquisition.
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Based on the market research conducted by the Group and the preliminary estimations of
the Directors, the amount of investment costs expected to be applied by the Group to pursue its
investment and acquisition strategy in Guangdong Province and Anhui Province in 2024 will be
approximately RMB54.3 million and RMB27.1 milli on, respectively. The G roup intends to apply
approximately HK$89.6 million (equivalent to a pproximately RMB81.4 million) or 63.0% of the
net proceeds from the Global Offering to acquire full ownership in companies specialising in the
provision of digitalisation solution services. For further details, please refer to the section
headed ‘‘Future Plans and Use of Proceeds ’’in this prospectus.
Enhancing the Group ’s liquidity position and financial capabilities in securing new large-
scale Digitalisation Solution Services projects
For the Group ’s services offered under its Digitalisation Solution Services projects,
particularly the Integrated Solution Services p rojects which generally involves provision and
procurement of hardware and/or software as well as installation and integration services in
accordance with the specifications required by its customers, the Group is generally required to
incur significant upfront costs at an early stage (i.e. within the first three months from the date of
securing the project) in satisfying the various needs in preparation and implementation of the
projects. For example, the Group is usually required to pay a significant sum of payment as
upfront costs to its hardware and/or software suppliers for (i) procuring various hardware and
third-party software systems and/or (ii) commissioning of technical support and maintenance
services if needed. The Directors believe that the Integrated Solution Services business sub-
segment operates based on a dual foundation of technology and capital. As advised by Ipsos, in
addition to technological advancements, the c ompetitiveness and succe ss of companies within
this business sub-segment are significantly influ enced by the availability a nd efficient utilisation
of capital resources. As a result, industry players with a robust capital base are better positioned
to compete for a broader range of projects, thereby gaining a competitive advantage in the
market.
During the Track Record Period, the Group h ad incurred approximately RMB36.6 million,
RMB16.0 million and RMB6.0 million, respectively, a s upfront costs under its Integrated Solution
Services business sub-segment, involving a total of 16 Integrated Solution Services projects that
had incurred payment of upfront costs by the Group. Such amount of upfront costs incurred
represented approximately 78.5% of the respective procurement costs under these 16 projects
on average. During the Track Record Period, for some large-scale Integrated Solution Services
projects, the Group would typically receive pa yments from its customers after a relatively
lengthy period of time, taking into account the implementation timeline of its Integrated Solution
Services projects, credit period granted to its customers and the actual timeframe required for its
customers to go through their internal procedures. The decrease in upfront costs incurred during
the year ended 31 December 2023 was primarily attributable to the early settlement of the
customers ’ initial payment under the Integrated Solution Services projects as a result of the
Group ’s improved efforts in collecting trade debts. As the Group intends to focus on the
development and growth of its Integrated Solution Services business sub-segment in future for
reasons set out herein, it inevitably entails higher capital requirements. Moreover, while the
customer may make progress payment depending on work progress, the Group is generally
entitled to payment only after completion inspection and acceptance and trial operation period,
subject to retention monies to be released after expiry of the after-sales period. Furthermore, for
some of the Group ’s large-scale Digitalisation Solution Services projects, the Group may only
receive payment after the end users, who are typically regulatory authorities or public
institutions, have made the corresponding payment to the Group ’s customers.
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As confirmed by Ipsos, for some Integrated Solution Services projects, service providers
are required to source and purchase the hardware equipment without advance payment from
customers before the completion of the projects. Based on the Group ’s experience during the
Track Record Period, the customers for the Integrated Solution Services projects would only
typically make the first payment to the Group a pproximately four months after the Group ’s initial
cash outlay was incurred. Given that during the Track Record Period, the Group ’s cost-revenue
ratio (i.e. total cost of sales divided by total revenue) under the Integrated Solution Services
business sub-segment was approximately 58.5%, 74.6% and 68.4% for the respective years,
among which a significant portion of 88.3%, 99.8% and 87.5%, respectively, of the total cost of
sales under the business sub-segment was attributable to the direct material costs for the
procurement of hardware and software for use in the projects. As a result, without additional
funding to maintain sufficient working capital and cash flow for meeting the upfront costs
requirements for the Integrated Solution Services projects, it would restrict the Group ’s financial
capability to expand the Group ’s Integrated Solution Services business sub-segment in future.
Therefore, in view of the prolonged customer payment process, it is vital for industry players to
maintain a strong cash flow in order to meet th e high capital requirements in relation to
procurement of hardware and/or software before the execution of the projects, as the amount of
upfront costs for such procurements can be highly dependent on the scale of the projects.
The Group had and will continue to place strong focuses in developing the Digitalisation
Solution Services business segment in Jiangxi Province. According to the Ipsos Report, the
market value of the digitalisation solution services industry in Jiangxi Province grew from
approximately RMB61.8 b illion to approximately RMB9 6.1 billion from 2019 to 2023,
representing a CAGR of approximately 11.7%, which is expected to grow from approximately
RMB104.1 billion in 2024 to approximately RM B150.8 billion in 2028, representing a CAGR of
approximately 9.7%. Coupled with the Group ’s other business strategies including the
acquisition of companies specialising in provis ion of digitalisation solution services in
Guangdong Province and Anhui Province and the strengthening of its research and
development capabilities, the Dir ectors anticipate that the Group would be in a better position to
capture more opportunities for large-scale Integrated Solution Services projects from new
customers in the future. As such, in order to better capture future business opportunities, it is of
utmost importance for the Group to enhance its liquidity position and financial capabilities to
ensure that it will have sufficient cash flow to satisfy the upfront costs requirements when
securing new large-scale projects in respect of its Integrated Solution Services.
Furthermore, the Directors believe that by undertaking large-scale projects, the Group
would be able to improve its market reputation and competitiveness, and better position itself
when approaching and negotiating with customers and prospective customers by possessing a
proven track record of notable large-scale projects. Certain customers within the Group ’s
Digitalisation Solution Services business segment may prefer to procure integrated solutions
that include both software and hardware components in one package, known as Integrated
Solution Services projects. This preference i s driven by convenience and the desire to avoid
engaging multiple suppliers, while also ensuring compatibility and streamlined support. Thus, the
Directors consider that offering only softwar e solutions without an integrated hardware
component could adversely affect the Group ’s competitive position.
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While the Group will continue to focus on the development and growth of its Integrated
Solution Services business sub-segment, it is worth noting that the gross profit margin
associated with Integrated Solution Services projects is generally lower when compared to
Software Solution Services projects because the hardware procurement component of
Integrated Solution Services projects generally yields a lower gross profit margin. Consequently,
it could result in a reduction in the overall gross profit margin of the Group. However, the Group
can still generate additional gross profit and net profit through the hardware procurement
component of Integrated Solution Services projects given that the project size of Integrated
Solution Services is generally larger than that of Software Solution Services. Furthermore, as
Integrated Solution Services projects generally involve procurement and integration of hardware
and software systems, which necessitate on-going system maintenance and support to ensure
proper functioning of the systems, the Group is g iven the opportunity to offer Infrastructure
Maintenance Services to its customers, which further enhances the Group ’s revenue and gross
profit. T aking into account the respective benefits brought by both the Integrated Solution
Services and Software Solution Services, the Directors consider that the Group ’ss t r a t e g i e st o
continue to focus and develop both of these business sub-segments will optimise business
performance of the Group and enhance shareholder value.
In view of its past track record in undertak ing and securing new projects for this sub-
segment, the Directors anticipate that with sufficient cash flow and enhanced liquidity position
and financial capabilities, it would be able to s ecure new large-scale projects in the coming
years. Based on the Group ’s assessment on the upfront costs requirements for procurement of
hardware and third-party software systems generally required for Integrated Solution Services
projects, the Group intends to ap ply approximately HK$22.0 million ( equivalent to approximately
RMB20.0 million) or 15.5% of the net proceeds from the Global Offering, together with the
Group ’s internal resources and/or bank borrowings, for payment of the upfront costs required in
respect of prospective Integrated Solution Services projects for 2024.
As at the Latest Practicable Date, the Group has been approached by prospective
customers through single-source procurement method, and has entered into negotiations with
respect to three potential Integrated Solution Services projects. One of such projects will involve
provision of services in relation to the digital urban management sector with an expected
contract value of approximately RMB50.0 million, and the other two projects will involve
provision of services in relation to digital education sector with an expected contract value of
approximately RMB65.0 million in aggregate. The Directors are of the view that the negotiations
in relation to these potential projects are going smoothly, and that there is a reasonable chance
of securing these projects when the customers officially proceed with their procurement
processes. If all of these potential projects materialise, it is expected that the Group will need to
pay for significant amount of upfront costs of app roximately RMB49.1 mi llion in aggregate based
on the reasonable estimation of the Directors. The Directors expect to pay for the required
upfront costs for these potential projects by applying the net proceeds from the Listing together
with the Group ’s internal resources and/or bank borrowings. Further, the Group will actively seek
new business opportunities to expand its Integrated Solution Services business, the Directors
expect that there will be another newly secured project in 2024 for utilising the net proceeds.
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As previously mentioned, the PRC government policies have bolstered the development of
the digitalisation solution services industry through the ‘‘1 3 t ha n d1 4 t hF i v eY e a rP l a nf o r
National Informatisation ’’*（ ‘‘十三五’’及‘‘十四五’’國家信息化規劃 ）and other relevant measures
which focus on developing the PRC into a self-reliant technological powerhouse. Coupled with
the increasing urbanisation rate in the PRC, the market value of the digitalisation solution
services industry is expected to grow continuously at a CAGR of approximately 9.0% from 2023
to 2027. As advised by Ipsos, the number of integrated solution services projects will continue to
grow steadily in the near future in view of the various market drivers, and there will be sufficient
number of projects available in the market to support the Group ’s business strategies in
developing its Integrated Solution Services business sub-segment.
Strengthening the Group ’s research and development capab ilities to enhance its provision
of Digitalisation Solution Services
As previously mentioned in recent years there has been a growing trend globally and in the
PRC towards the use of digital technologies such as IoT devices, cloud computing, big data, AI
as well as blockchain technologies due to the greater use of 5G networks. Previous generations
of wireless network technologies primarily dealt with human communications in the form of
voice, data and Internet, whereas 5G networks aim to satisfy industrial communications and
drive the digitalisation of the global economy. 5G networks are characterised by high bandwidth
and data rates, low latency, broad coverage and massive connectivity as such 5G works have
high applicability for digital technologies as i t can readily handle the high data transmission
rates that are required by digital technologie s. Further, the low latency and reliability of 5G
networks enables minimal delay in data processing. According to the Ipsos Report, 5G networks
are set to gain greater prominence in the coming years as the number of 5G base stations in the
PRC grew at a CAGR of approximately 117.8% for the period from 2019 to 2023 and is
forecasted to grow at a CAGR of approximately 15.0% for the period from 2024 to 2028, while
the overall growth of base stations over the same period was merely at a CAGR of
approximately 8.5% and 1.8% respectively. It is also expected that by 2028, the number of 5G
base stations will account for approximately 54.0% of all base stations in the PRC.
Digital technologies have broad applications for both governments and industries and are
an integral part of any smart city development as they allow for mundane and routine tasks to be
carried out automatically and in a coordinated manner thus allowing human resources to be
deployed for more complex tasks. For example, big data analytics, IoT devices, discriminative
AI, and blockchain technology together create powerful synergies that significantly enhance the
potential of both government and various industry sectors. IoT devices generate vast amounts of
real-time data that, when combined with big data analytics, provide valuable insights for
informed decision-making. Discriminative AI al gorithms facilitate hum an decision-making
processes as it classifies data and analyses statistics by identifying patterns or features in the
input data efficiently. Blockchain technology ensures data integrity, transparency, and security,
fostering trust and accountability in data-driven processes. By integrat ing these technologies,
governments and industries can optimise oper ations, drive innovation, and create more
sustainable, efficient, and secured ecosystem s in an increasingly interconnected world,
benefiting the society as a whole. Furthermore, the PRC government is also advocating for the
wide application of digital technologies to cities and urban areas as having been reflected in
various PRC government policies such as ‘‘The Industrial Internet of Thing (IIoT) Development
Action Plan (2018-2020) ’’*（《工業互聯網發展行動計劃（ 2018-2020 年》）
, ‘‘T h eN o t i c eo nP r o m o t i n g
the Accelerated Development of 5G ’’*（《關於推動5G加快發展的通知》）, ‘‘Implementation Opinions
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on Further Deepening Co-construction and Sharing of T elecommunications Infr astructure to Promote
High-quality Development of ‘‘Double Gigabit ’’Networks’’*（《關於進一步深化電信基礎設施共建共用促
進‘‘雙千兆’’網路高品質發展的實施意見》）and ‘‘Overall Plan for Digital China Construction ’’*（《數字中
國建設整體佈局規劃》）.
The Group ’s Digitalisation Solution Services projects during the Track Record Period
generally involved providing t urnkey and other solutions which utilised various digital
technologies. For example, during the Track Record Period, the Group had applied its
self-developed Gantong Digital Area Cloud Management System software and Digital Intelligent
Data Analysis Platform software for use in its digital industrial management and digital urban
management projects. Given the well-accepted use of the Group ’s self-developed software
systems in its Digitalisation Solution Services projects, the Group has made significant efforts in
the research and development of new software systems in order to broaden its offerings so as to
be able to provide more comprehensive solutions, and had incurred research and development
expenses of approximately RMB19.2 million, RM B17.7 million and RMB25.9 million during the
Track Record Period, respectively. As at the Latest Practicable Date, the Group had registered
over 120 software copyrights in the PRC which are or may be material to the Group ’s business.
For details in relation to the Group ’s research and development processes and the Group ’s
intellectual property rights, please refer to the paragraphs headed ‘‘Research and Development ’’
in this section and
‘‘B. Further information about the Group ’s business – 2. Intellectual property
rights of the Group ’’in Appendix V to this prospectus. Further, as at the Latest Practicable Date,
the Group had 82 employees in its research and development department responsible for
undertaking various software research and development tasks.
Establishing a research and development centre
In light of the vast demand for digital technologies and the well-accepted use of the
Group ’s self-developed software systems in its Digit alisation Solution Services projects as well
as the importance of the Group ’s Digitalisation Solution Services business segment to its
profitability, the Group intends to strengthe n its research and devel opment capabilities by
establishing a research and development centre so as to enhance its provision of Digitalisation
Solution Services.
The Group intends to initially utilise its resear ch and development centre to mainly focus on
developing 5G-enabled digital technologies w ith two primary objectives: (i) broadening the
applicability of sector-specific dig ital technologies; and (ii) devel oping the underlying capability
of 5G-enabled cloud based technologies particularly on big data analytics and blockchain
technology. Cloud based technologies allow the storage and access of data over the Internet
and thus simplifies the means by which data can be stored, processed and shared amongst
users. When cloud based services incorporate the use of IoT , it can enhance data collection as
devices such as IoT sensors can be used to gene rate and capture data, thus facilitating the
creation of new big data, while blockchain technologies can be used to better secure data-
sharing while maintaining traceability. With the two primary objectives in mind, the Group plans
to devote additional resources to developing new software systems, each of which would
incorporate various 5G-enabled technologies and functional modules.
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In relation to broadening the applicability of sector-specific digital technologies, the Group
intends to develop 5G-enabled software systems tailored for use in sector-focused applications
such as those relating to digital healthcare, digital education, digital surveillance and digital
telecommunications construction sectors. By leveraging on the characteristics of 5G technology,
each of these research undertakings aim to develop a software system which would overcome
the technicality constraints exist in the pre- existing software systems which were developed
under the previous generations of wireless network technologies. For example, the software to
be applied on the digital telecommunications construction sector, if successfully developed,
would largely improve the level of automation in project management of telecommunications
construction projects by allowing synchronised and closed-loop collaboration and promoting
data-driven and visualised decision-making processes by taking advantage of the unique
features of 5G network technology including high bandwidth and data rates, low latency, broad
coverage and massive connectivity. The Directors believe that it would help telecommunications
construction companies to achie ve a cost-efficient and effective operational management,
thereby increasing their market competitiveness. Meanwhile, the software to be applied on the
smart healthcare sector, if successfully developed, would enable hospitals and other medical
institutions to operate in an optimised, controlled and innovative manner. The Directors believe
that the characteristics of 5G technology would make it possible for real-time and secured
exchange and centralisation of information via multiple cloud based IoT networks to be carried
out efficiently, enabling the in telligent organisation and analys is of voluminous data utilising
advanced technologies such as discriminative AI and big data. It would assist medical
practitioners through provision of a more effective knowledge management and a better
reasoned decision-making process so as to enable them to formulate more reliable diagnoses
and treatment for patients over the traditional diagnosis methods.
In relation to developing the underlying capab ility of 5G-enabled cloud based technologies,
the Group intends to create software platforms offering 5G-enabled software-as-a-service
solutions relating to big data, discriminative AI and/or blockchain technologies. T aking
advantage of the high-speed, low-latency and large-capacity characteristics of the 5G network,
these platforms aim to provide enterprises and users with access to adaptive and innovative
solutions in development of various cloud based applications. The Directors believe that
enterprises and users could create their customised tools and system modules utilising various
user-friendly features such as enhanced data pro cessing capabilities, multi-facet data resources
integration and sharing, accelerated development and innovation of software applications, as
well as elevated data security and operational efficiency.
The research and development centre is to be located on the 8th floor of the Group ’s
headquarters with an approximate floor area of 1,040 sq. m. Additionally, the Group intends to
house an exhibition room in the research and development centre to display and demonstrate
the results of the Group ’s research and development efforts. Currently, the 8th floor of the
Group ’s headquarter, is for general office use and setting up the new research and development
centre. The Group plans to renovate the premise, purchase hardware equipment and hire
additional research and development personnel.
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Hardware equipment and ancillary software systems to be purchased
Set out below are details relating to the major hardware equipment and ancillary software
systems to be purchased in relation to the establishment of the research and development
centre:
Type and description
Amount of
costs to be
incurred
(RMB ’000)
(i) Equipment for demonstration and showcase of research and
development efforts : The Group intends to purchase additional hardware
equipment including humanoid service robot, immersive virtual reality
system and digital display systems, mobile digital screens and other
projection devices for showcasing its research and development efforts by
means of interactive demonstration at the exhibition room, which is
expected to be set up inside the research and development centre at the
Group ’s headquarter. With the assistance of these demonstration equipment
acting as human user interfaces, the Group ’s research and development
personnel as well as other potential users, visitors and business partners
will be able to visualise the applications of the various software systems
developed or under development in different sector-specific scenario. These
interactive equipment and devices also allow users to view and test run the
performance of the software systems by inputting specific instructions and
parameters under simulated environment. The Directors believe that it will
greatly enhance the process by which sales and marketing activities are
carried out as it will enable audiences to better apprehend abstract concept
and ideas relating to application of digital technologies. Examples of the
major hardware equipment to be purchased include:
7,843

Humanoid service robot : A professional service robot that resembles
the human body in shape and is programmable to carry out tasks in
different settings which will be primarily used in research projects for
demonstration propose;
 Immersive virtual reality system : A projection-based virtual reality
system that enables users to collaborat ively observe, interact with, and
manipulate the virtual world objects which will be primarily used for
demonstration purpose; and
 Digital display systems and mobile digital screens : Interactive display
devices which combine the functiona lity of a traditional display with
advanced features such as touch sensitivity, connectivity and other
interactive capabilities including screen sharing and monitoring which
will be primarily used for demonstration purpose.
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Type and description
Amount of
costs to be
incurred
(RMB ’000)
(ii) Centralised storage and backup devices and server systems for
maintaining cloud platform infrastructure : The Group intends to
purchase hardware devices and server systems including centralised
storage and backup devices and server systems with specific functions
(such as server systems for computing, block storage, flash memory
storage, graphics rendering acceleration, and security, etc.) that allow and
facilitate the development of various underlying capability of 5G-enabled
cloud based technologies. Based on the research of the Directors, these
devices and systems are essential for the provisioning and management of
computing resources for setting up of cl oud platform infrastructure which will
be utilised by the Group ’s research and development team to create
software platforms offering 5G-enabled software-as-a-service solutions.
6,424
(iii)
Server room and other supporting systems : The Group intends to set up
an independent server room specifically for housing and securing the
various hardware and equipment relating to its research and development
activities. It is expected that the server room will be installed with various
supporting hardware devices (such as e nvironment monitory devices, power
distribution system, air condition and ventilation system), Internet
connectivity devices and security systems. The Directors believe that a
properly installed and secured server room helps preserve critical and
sensitive information and valuable hardware equipment and devices from
environmental changes, unauthorised tempering or accidental damage.
2,830
(iv) Equipment and devices to support telecommunications construction
related research and de velopment activities : As digitalisation solutions
continue to evolve and new technologies emerge, the Directors believe that
the telecommunications infrastruc ture will play an important role in
supporting the implementation and growth of the digitalisation solutions
industry. As such, the Group intends to acquire various testing and
measuring equipment and devices sp ecific for the telecommunications
industry which support the undertaking of various telecommunications
infrastructure engineering related research and development initiatives of
the Group. Examples of the major hardware equipment to be purchased
include:
1,860

T elecommunications testing and measuring equipment : T esting
equipment such as transmission testing instrument, wireless network
optimisation instrument, network testing instrument, optical cable
connectivity tester and multimeter, for verifying proper installation of
network cabling which will be primarily used in research projects in
relation to telecommunications infrastructure engineering.
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Type and description
Amount of
costs to be
incurred
(RMB ’000)
(v) General research and development systems : With the Group ’s business
strategy to expand the scale of its research and development team,
additional computer hardware systems installed with the necessary
operating systems and software development tools will be required to
support their day-to-day activities.
440
Total 19,397
Additional research and development personnel to be recruited
In connection with the above, the Group intends to hire a total of 35 personnel who are
experienced in the research and development of software technologies which can be applied in
the Digitalisation Solution Services projects. Among these additional research and development
personnel, the Group expects to recruit approximately four research and development directors,
two software architects, three product managers, six requirement engineers, four design
engineers, 10 development engineers, four testing engineers and two maintenance engineers,
who will all be devoted to undertaking various research and development initiatives for the
development of 5G-enabled digital technologies focusing on four major sectors, namely, digital
healthcare, digital education, digital surveillance and digital telecommunications construction
sectors, and utilising the newly acquired research and development facilities and hardware
equipment as abovementioned. Through this strategy, the availability of highly qualified
personnel will make the Group ’s research and development activities more appealing and cost
effective. In addition, based on the research and market survey conducted so far, the Directors
believe that there is a sufficient supply of personnel with the appropriate qualifications and
experience in the labour market within Jiangxi Province.
The following table sets out the number, major qualifications and experience required, job
responsibilities and the expected annual salary level for the positions the Group intend to
recruit:
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Position Number Job responsibilities
Expected
annual
salary level
per staff
(Approximately) Major qualifications and experience required
Research
and
development
director
4 Responsible for the overall
management of the research
and development centre and
facilitate the research and
development undertakings of
the Group
RMB400,000  Postgraduate degree in computer science or other
related field
 More than 10 years of software development related
work experience
 Experience in managing teams with more than 20
members and with more than 3 years of experience in
managing software development teams
 Rich experience in the implementation of solutions in
relation to IoT , big data, AI
 Proficiency in relevant development technologies and
languages
 Familiar with common design workflow
Software
architect
2 Responsible for the research
and development direction of
individual research project,
overall design of the
software system and
interface and preliminary
development
RMB300,000  Undergraduate degree in computer science or other
related field
 5 to 10 years of software development related work
experience
 System analysis and software architecture design
capabilities
 Proficiency in relevant development technologies
Product
manager
3 Responsible for designing
the user interface, data flow
and application of the
product and assist in the
testing of the product
RMB300,000  Undergraduate degree in computer science or other
related field
 5 to 10 years of work experience as a product manager
 Experience in product design
 Proficiency in statistical analysis and product planning
Requirement
engineer
6 Responsible for analysing
and specifying the user and
system requirements to
accommodate the needs of
the users in various
industries
RMB150,000  Undergraduate degree or above in computer science or
other related field
 5 to 10 years of work experience and particularly more
than 2 years of work experience in business research,
demand analysis, and function design
 Proficiency in conducting on-site research and using
product design software
Design
engineer
4 Responsible for the user
experience design and user
interface design and visual
design of the product
RMB200,000  Undergraduate degree in computer science or other
related field
 5 to 10 years of work experience
 Proficiency in using product prototype illustration
software, graphic design software
Development
engineer
10 Responsible for leveraging
on customised solutions and
research outputs and further
developing them as generic
products for commercial
application
RMB150,000  Undergraduate degree in computer science or other
related field
 3 to 5 years of software development work experience
 Familiarity with software development technologies and
database systems technologies
 Coding capabilities
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Position Number Job responsibilities
Expected
annual
salary level
per staff
(Approximately) Major qualifications and experience required
Te s t i n g
engineer
4 Responsible for conducting
testing on the product
according to a set of testing
parameters and providing
feedback for necessary
adjustments and
modifications
RMB100,000  Undergraduate degree in computer science or other
related field
 1 to 2 years of software testing experience on various
platforms, those with software testing experience at
mobile phone manufacturers are preferred
 Experience in the testing of mobile phones and tablet
products in relation to their functions, performance,
stability, automation and other specific features
Maintenance
engineer
2 Responsible for the
operation and maintenance
of the software and
hardware, database and
server at the research and
development centre
RMB100,000  Undergraduate degree in computer science or other
related field
 1 to 2 years of maintenance related work experience
 Proficiency in basic theoretical knowledge and operation
methods such as operating system, cloud platform,
virtualisation, network security, database
 Proficiency in configuring various routers, switches,
firewall equipment, operating system deployment and
maintenance of various services
 Familiarity with telecommunications equipment
 Proficiency in using more than one programming
languages
 Preference for those possessing virtualisation, operation
system, database, and network related professional and
technical certifications
T o pursue the Group ’s strategy to strengthen the Group ’s capabilities in respect of its
Digitalisation Solution Services business segment, the Directors estimated that, based on the
quotations obtained and the market research conducted, the total costs expected to be incurred
in 2024 in connection with purchasing hardware equipment and ancillary software systems and
hiring research and development personnel w ill be approximately RMB26.3 million. The Group
intends to apply approximately HK$24.6 million ( equivalent to approximately RMB22.4 million) or
17.3% of the net proceeds of the Global Offering to strengthen the Group ’s research and
development capabilities to enhance its provision of Digitalisation Solution Services, of which
approximately HK$21.3 million (equivalent to approximately RMB19.4 million) will be used to
purchase hardware equi pment and ancillary software syste ms, and approximately HK$3.3
million (equivalent to approximately RMB3.0 milli on) will be used to hire additional research and
development personnel. For further details, please refer to the section headed ‘‘Future Plans
and Use of Proceeds ’’ in this prospectus. The remaining costs required are expected to be
funded by the Group ’s internal resources and/or bank borrowings.
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With the support of the major part of net proceeds from the Listing, the Group will have
additional funds to develop its Digitalisation Solution Services business. However, the Directors
emphasised that the Group ’s T elecommunications Infrastructure Services will remain to be its
core business and an integral part of its operations. The Directors anticipate the following
outcomes as the contribution from the Digitalisation Solution Services business segment grows:
 Revenue growth : By investing in the development of the Digitalisation Solution
Services business segment, the Group aims to capitalise on the growing demand for
comprehensive digitalisation solutions. This strategic expansion is expected to drive
revenue growth as the Group captures market opportunities from digitalisation solution
services industry and expands its customer base.

Diversification : Increasing the share of the Digitalisation Solution Services business
segment allows for further diversification beyond the Group ’s T elecommunications
Infrastructure Services. This strategic move helps mitigate the risks associated with
market fluctuations in the t elecommunications industry and provides the Group with
additional revenue streams.
 Potential impact on profitability : The Group sees a potential positive impact on its
profitability with an increased focus on its Digitalisation Solution Services. These
projects often have favorable margins compared to its T elecommunications
Infrastructure Services projects. As the Group expects the contribution from the
Digitalisation Solution Services business segment to grow, the overall gross profit
margin is expected to improve. This strategic shift will allow the Group to pursue
higher margin opportunities, leading to a potential improvement in profitability.
It is worth noting that while the Group is active ly developing its Digitalisation Solution
Services, the T elecommunications Infrastruct ure Services will remain a core focus. The Group
will leverage its expertise, resources, and customer base in telecommunications infrastructure to
support the development and delivery of its Digitalisation Solution Services.
PRINCIPAL SERVICES AND BUSINESS MODEL
The Group principally engages in the provision of (i) T elecommunications Infrastructure
Services and (ii) Digitalisation Solution Services in the PRC on a project-by-project basis. The
Directors recognised the synergies between the Group ’s T elecommunications Infrastructure
Services and Digitalisation Solution Services, which have contributed to the Group ’sg r o w t ha n d
market presence. The Group ’s technological expertise in areas such as wireless
communications, network management, and IoT connectivity has been effectively applied to
develop and deploy innovative digitalisatio n solutions. Leveraging its knowledge of
telecommunications infrastructure, the Group has been able to create customised solutions that
address the specific needs of its customers in the digitalisation solution services sector.
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Since its founding, the Group has established long and stable business relationships with
the key players in the telecommunications industry in the PRC including the Big Three and the
largest telecommunications tower infrastructure service provider in the world through provision
of T elecommunications Infrastructure Services. The Group ’s provision of T elecommunications
Infrastructure Services has been instrumental in fostering these connections. During the Track
Record Period, a substantial portion of the Group ’s revenue for T elecommunications
Infrastructure Services was attr ibutable to these four large-scale state-owned enterprises in the
P R C .T h ed u r a t i o no ft h eG r o u p’s business relationships with each of these entities ranged from
approximately five to 21 years, underscoring the long-standing nature of these partnerships. By
provision of T elecommunications Infrastructure Services to these customers, the Group not only
accumulated extensive experience, but also the Group has established a mutual trust and
understanding with the Big Three and the world ’s largest telecommunications tower
infrastructure service provider, as evidenced by the Group ’s understanding and familiarity with
their requirements, preference and expectations. The Group ’s established customer base from
its T elecommunications Infrastructure Services has provided valuable cross-selling opportunities.
The Directors believe that the Group ’s successful expansion of footprints into the
digitalisation solution services market is primarily driven by three main factors: (i) when end
users involve governments, regulatory authorities or public institutions, these digitalisation
solution services projects are typically commi ssioned by state-owned enterprises such as the
Big Three, the world ’s largest telecommunications tower infr astructure service provider or other
service providers; (ii) by qualifying as an approved supplier for the Big Three and the world ’s
largest telecommunications tower infrastructure service provider through its prior experiences of
serving as their service provider in a wide range of T elecommunications Infrastructure Services
projects, the Group has secured its place as a preferred service provider for the Big Three and
the world ’s largest telecommunications tower infrastructure service provider in various
Digitalisation Solution Services projects; and (iii) the long and stable business relationships
established from the Group ’s T elecommunications Infrastructure Services have set the ground
for it to explore and secure business opportunities for Digitalisation Solution Services with these
customers, especially considering that such projects are typically obtained through single-source
procurement and/or by responding to invitations to quote. T o illustrate, take the Big Three ’s
digital surveillance Integrated Solution Services projects undertaken by the Group in Nanchang
City, Jiangxi Province as an example. The implementation of this type of projects typically
involved the installation of surveillance cameras across the specified areas within the city.
Accordingly, it necessitates the service provider to possess a deep understanding and technical
knowledge of the geographical distributions and other important parameters relating to the
telecommunications network, base stations and wireless communications within the city.
Leveraging its successful prior track record, kn owledge in the parameters of telecommunications
network and facilities in the particular area, as well as expertise and understanding of customer
requirements, the Group was able to secure these projects from the Big Three by effectively
translating the customer ’s needs and objectives into actionable plans and successful outcome.
Therefore, the Directors believe that the Group ’s established customer base from its
T elecommunications Infrastructure Services is one of the key determining factors for the Group
to obtain new business opportunities for Digitalisation Solution Services. This principle applies
equally to the other way around, where the Group ’s capabilities in providing Digitalisation
Solution Services to key playe rs in the telecommunications industry in the PRC showcase its
ability to undertake projects in both the T elec ommunications Infrastructure Services and
Digitalisation Solution Services business segme nts. By offering its Digitalisation Solution
Services, the Group has expanded its reach and maximised value for both segments.
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Founded in Jiangxi Province, the Group has expanded its operations to 25 provinces,
municipalities and autonomous region across the PRC as at the Latest Practicable Date. During
the Track Record Period, the Group derived its revenue from its principal services, namely (i)
T elecommunications Infrastructure Services , with the sub-segments of Infrastructure
Construction Services and Infrastructure Maintenance Services; and (ii) Digitalisation Solution
Services, with the sub-segments of Integrated Solution Services, System Maintenance Services
and Software Solution Services. The following table sets out a breakdown of the Group ’s total
revenue by business segments during the Track Record Period:
Year ended 31 December
2021 2022 2023
Revenue
Percentage
of total Revenue
Percentage
of total Revenue
Percentage
of total
RMB’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 3 4 4 , 6 3 1 7 1 . 9 % 3 0 9 , 2 7 6 7 4 . 9 % 4 6 3 , 3 6 7 7 6 . 1 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ 2 5 , 1 6 0 5 . 3 % 3 3 , 2 2 4 8 . 0 % 3 7 , 9 9 0 6 . 2 %
S u b - t o t a l ............................................ 369,791 77.2% 342,501 82.9% 501,357 82.3%
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. 1 0 7 , 3 6 4 2 2 . 4 % 1 0 , 1 4 8 2 . 5 % 4 1 , 2 5 8 6 . 7 %
– S y s t e mM a i n t e n a n c eS e r v i c e s ............................ 1 , 9 6 3 0 . 4 % 2 , 0 4 4 0 . 5 % 4 7 0 0 . 1 %
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... –– 58,399 14.1% 66,216 10.9%
S u b - t o t a l ............................................ 109,327 22.8% 70,591 17.1% 107,944 17.7%
Total ............................................... 479,118 100.0% 413,091 100.0% 609,301 100.0%
Telecommunications Infr astructure Services
The Group ’s T elecommunications Infrastructure Services consist of Infrastructure
Construction Services and Infrastructure Maintenance Services, which are utilised by key
market players in the telecommunications industry in the PRC to expand and maintain their
telecommunications networks. Such key players include telecommunications network operators,
telecommunications tower infrastructure service providers, local governments, quasi-government
institutions and state-owned enterprises. T elecommunications networks, which enable
communication and information exchange, are of fundamental importance to a country. The
telecommunications industry is considered a strategic sector that is tied to national security and
stability.
The Group possesses the necessary qualification and license in offering its
T elecommunications Infrastructure Services including Qualification Certificate of Construction
Enterprise*（ 建築業企業資質證書 ）and Work Safety License* （ 安全生產許可證 ）. After the Group
is being awarded of a tender from its customers and has signed the relevant framework
agreement or task specific agreement on a project-by-project basis, the Group acts as the main
contractor as well as the sole contractor for its T elecommunications Infrastructure Services
projects. Depending on the need of the projects, the Group may engage labour suppliers for the
provision of labour services to carry out certain sporadic, non-core but labour intensive on-site
works, while the Group will retain control over the overall performance of the project and remain
ultimately responsible to its customers.
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The following chart summarises the Group ’s principal business activities and business
model in relation to its T elecommunications Infrastructure Services business segment:



Suppliers for labour and ancillary construction materials
Telecommunications Infrastructure Services



Infrastructure Construction
Services


Infrastructure Maintenance Services
The Group
Suppliers
Installation of
telecommunications
equipment provided
by customers
Construction of
telecommunications
network
infrastructure
Procurement of
labour and
ancillary
construction
materials
Project supervision and management
and quality control
Provision of
maintenance, repairs
and emergency
support services
Procurement of
labour and
ancillary
construction
materials
Project supervision and management
and quality control
Telecommunications network operators / telecommunications tower infrastructure service providers / local governments / quasi-government
institutions / state-owned enterprisesCustomers
Infrastructure Construction Services
Infrastructure Construction Services mainly involve the construction, adaptation and
installation works of network infrastructure along the entire telecommunications network which
generally has a three-layer structure consisting of the core network, transmission network and
access network, as well as construction services fo r other supporting infrastructure and wireless
network. As the Group ’s customers for its Infrastructure Cons truction Services primarily included
telecommunications network operators and telecommunications tower infrastructure service
providers who are responsible for the provision of telecommunications-related services and
infrastructure in the PRC, the construction and mai ntenance of network infrastructure therefore
play a vital role in supporting the functionality, st ability and connectivity of the telecommunications
network. During the Track Record Period, a majority of the Group ’s revenue was derived from
the provision of its Infrastructure Construction Services.
In carrying out the various construction works under the Infrastructure Construction
Services projects, the Group typically provides its customers with a combination of services
primarily including base stations and auxiliary fa cilities engineering services, power grid
connection services, cable installation services, access network related services and wireless
network equipment installation services. In o rder to ensure the timely implementation of the
construction works, the Group has dedicated personnel to supervise and monitor the overall
work progress and manage the allocation of resources for individual projects, and it also
ensures that there are sufficient labour and anc illary construction materials to undertake the
relevant tasks upon receiving the work orders from its customers. In addition, as part of the
Group ’s quality assurance procedures, it will conduct testing and commissioning as well as on-
site inspections from time to time to ensure that the quality of works meets the specifications
and required standards of the customers. The Group is generally not required to procure the
major telecommunications equipment (such as transmission lines and cables, base stations and
other digital equipment), which will instead be provided by the customers for the relevant
installation and integration works.
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Set out below are further details of the Group ’s services involved in the construction,
adaption and installation works in relation to the telecommunications network infrastructure for
its Infrastructure Construction Services projects:
Nature of services Description of services
Base stations and auxiliary
facilities engineering services
Base stations and auxiliary facilities engineering services mainly
involve the construction of base stations together with the
installation, adaptation and configuration of the relevant
telecommunications equipment including, antennae systems, signal
amplifiers and other transmission systems for wireless
telecommunications network. Aux iliary facilities engineering
services mainly involve the construction of equipment rooms and
electricity generation facilities, foundation works for base stations,
installation of lighting and surge protection systems and other
related facilities.
Power grid connection services Power grid connection services mainly involve connecting
telecommunications networks to the power grid and the installation
of transformers or other electric al equipment to convert high-voltage
power into low-voltage for the purposes of providing reliable power
supply for telecommunications base stations.
Cable installation services Cable installation services mainly involve the installation, adaptation
and expansion of telecommunications pipelines such as trunk
pipelines in which electrical and/or optical cables would be laid for
fixed line telecommunications networks. Depending on the method
used, the Group may also be responsible for the civil engineering
works that support the installation of cables, including pole planting
and the laying of the cables by way of drilling and trenching works
and building of manholes.
Access network related services Access network related services mainly involve the installation,
adaptation and expansion of telecommunications pipelines for the last
mile delivery of telecommunications services to the end users ’
premises to enable the transmission of data, voices, audio, video
and other types of information.
Wireless network equipment
installation services
Wireless network equipment installation services mainly involve the
installation of telecommunications equipment such as indoor
antennae distribution systems to ensure the even distribution of
wireless signals within buildings, large venues, and other scenarios
where indoor wireless communication coverage is required by end-
users.
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The Group ’s Infrastructure Construction Services were mainly provided through the use of
labour provided by the Group ’s labour suppliers whereby they would be responsible for the on-
site execution of the abovementioned services. The Group would generally rely on the use of
labour provided by the Group ’s labour suppliers as many of its projects are carried out across a
large number of geographical locations and, through labour suppliers, the Group can ensure the
sufficiency of labour in each of its project locations as otherwise it would be inefficient,
ineffective as well as costly were it to attempt to do so through direct labour. Due to the
specialised equipment and materials needed for the construction of network infrastructure as
well as the need to meet specific technical requ irements and ensure compatibility with their
existing infrastructure, the Group ’s customers would generally be responsible for providing the
necessary telecommunications equipment while the Group would generally procure the ancillary
construction materials through its labour suppliers, if necessary. Further, through the use of
labour provided by the Group ’s labour suppliers, the Group can also limit its long-term direct
labour and overhead costs which is of significant importance given the project-by-project nature
of the Group ’s services while allowing the Group to fo cus on the core aspects of its services,
namely project planning, overall project management and ensuring that the finished works are
capable of meeting the standards and requirements of its customers.
Projects for the Group ’s Infrastructure Construction Services during the Track Record
Period were generally awarded by way of open tender which would be made available through
online platforms, and their contract periods would typically range from one to two years.
Infrastructure Maintenance Services
Infrastructure Maintenance Services mainly i nvolve carrying out routine basic maintenance,
repairs and restoration works and emergency trouble shooting to the telecommunications
infrastructure located across rural and urban areas in the PRC. Routine basic maintenance
generally requires the Group to carry out per iodic maintenance and inspection of network
equipment, telecommunications base stations, lightning protection grounding systems and other
related or ancillary equipment, while repair and restoration works generally relate to dated
telecommunications infrastructure that are in disrepair. As for emergency trouble shooting, this
generally relates to situations where there are major network failures and in such an event the
Group would normally provide technical support and would carry out on-site emergency repairs
as needed. A typical Infrastructure Maintenance Services project would generally last for
approximately one to three years. In general, the on-site works under Infrastructure Maintenance
Services would be carried out with the use of labour provided by the labour suppliers while the
Group would oversee and manage the works carried out to ensure work quality.
Projects for the Group ’s Infrastructure Maintenance Services during the Track Record
Period were generally awarded by way of open tender which would be made available through
online platforms.
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Digitalisation Solution Services
Digitalisation Solution Se rvices aim to improve the operational efficiency and
productivity of its customers through incorporating digital technologies such as IoT , cloud
computing, big data, discriminative AI and blockchain to enable the integration of various
hardware and software systems under a unified pla tform. Digital technologies, by integrating
computing and telecommunications, transfo rm traditional systems into intelligent and
interconnected networks. These technologies e xcel in collecting, processing, and sharing
data in real-time, which drives o ptimisation and automation of various operations. This data-
driven approach fosters efficiency and effec tiveness in decision-making, empowering
systems to be predictive and adaptive. As a result, digital technologies can proactively
anticipate changes and adapt accordingly, enabling seamless, dynamic responses in diverse
applications. This continual evolution sets the stage for innovative solutions and growth
across multiple sectors. During the Track Record Period, the Group adopted a sector-focused
approach and had undertaken various Digitalisation Solution Services projects which related
to various sectors including digital healthcare, digital education, digital surveillance, digital
government, digital industrial management and digital urban management, etc., and had provided
its services to telecommunications network oper ators, local governments, quasi-government
institutions, state-owned enterprises and priv ate companies. During the Track Record Period, the
Group ’s customers would generally approach the Gr oup via single-source procurement method
and/or by way of invitation to quote to directly so licit its Digitalisation Solution Services as
opposed to the open tendering process for the Group ’s T elecommunications Infrastructure
Services projects. Set out below are the key sectors on which the Group ’s Digitalisation Solution
Services projects focused during the Track Record Period:
Digital
healthcare
Digital
education
Digital
surveillance
Digital
government
Digital
industrial
management
Digital urban
management
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Digitalisation Solution Services business segment comprises three business sub-segments,
namely, Integrated Solution Services, System Maintenance Services and Software Solution
Services, allowing customers to procure the services according to their actual needs. The
following chart summarises the Group ’s principal business activities and business model in
relation to its Digitalisation Solution Services business segment:


Integrated Solution Services
Digitalisation Solution Services
Software Solution Services

System Maintenance
Services
The Group
Integrated Solution Services
Suppliers for hardware, third-party software
and technical support services (if needed)
Suppliers for technical support
and maintenance services (if needed)
Procurement of hardware
and third-party
software (if needed)
Project supervision and management
and quality control
Provision of system design planning, installation
and integration services of hardware and
software systems and technical support services
Telecommunications network operators / local governments / quasi-government institutions / state-owned enterprises / private companies
Project supervision and management
and quality control Provision of software system integration
and technical support services
Research and development
Project supervision and management
and quality control
Research and
development
Customised
development of
software
Sale of self-developed
software/Customised
development of
software
Provision of technical support and maintenance
services for hardware and software systems Sale of
self-developed
software
Suppliers
Customers
Integrated Solution Services
Integrated Solution Services generally involve providing turnkey solutions through (i)
system design planning used to ensure that the resulting solution is capable of meeting the
objectives defined by the customer; (ii) supply of hardware and software and installation and
integration services to ensure that the components meet the requisite specification and possess
all the necessary functions and features while ensuring that the components are capable of
operating together in a seamless fashion; and (iii) provision of after-sale services such as
technical support services to ensure that the systems can function properly and stably.
Integrated Solution Services primarily involve provision of a comprehensive digitalisation
solution that includes all the necessary hardware and software components in a single package.
The hardware is sourced from approved third-party suppliers, while the software consists of both
self-developed software and software sourced from approved third-party suppliers. The self-
developed software includes ready-to-use s oftware and customised software designed
specifically for customers, typ ically developed by the Group ’s research and development team,
sometimes with the assistance of third-party p rogrammers. For further details of the Group ’s
research and development processes, please refer to the paragraph headed ‘‘Research and
development ’’ in this section. Depending on the requirements of the customers, the Group may
also provide after-sales services such as remote and/or on-site technical support services and
software upgrade services.
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As confirmed by the Directors, the table below sets out some examples of the Group ’s
major sector-specific projects that the Group had undertaken under its Integrated Solution
Services business sub-segment during the Track Record Period:
(i) Integrated Solution Services projects involving both (a) sale of the Group ’s self-developed
software/customised devel opment of software systems and (b) hardware and software
systems integration services:
Sector
Relevant Integrated
Solution Services project Key features which correspond to the sector
Digital government
Digital surveillance
Digital city management project
(phase 1-operation) agreement in
Qingshan Lake District
Digital city management (phase
1-surveillance system integration
service agreement)
The Group ’s digital systems encompass sophisticated
features. Examples of the notable modules include:
 Data analysis leverages big data for comprehensive
cross-analysis, statistical queries, and in-depth
examination;
 Blockchain implementation utilised in data security
and authentication, fostering decentralised data
storage to mitigate data manipulation while
preserving traceability; and
 Big data enhanced flexibility and efficiency and
facilitate highly adaptable and efficient operations.
Digital healthcare Hospital intelligent informatisation
engineering project in Linchuan
District
The digital hospital systems provided by the Group
leverage advanced software technologies to satisfy the
functional requirements of hospitals. Examples of the
notable modules include:
 Medical technology services module – it
encompasses components such as (i) radiology
information system/picture archiving and
communication system, which streamlines storage,
management, and sharing of radiology images and
data, reducing image loss risks, thereby enabling
faster diagnosis and treatment in radiology
departments; (ii) endoscopic management, which
optimises procedure scheduling, preparation, and
documentation, while facilitating equipment
utilisation tracking and maintenance oversight,
enhancing operational efficiency and patient safety;
and (iii) electrocardiogram management, which
streamlines data storage, analysis, and
dissemination, aiding healthcare professionals in
precise cardiac condition detection, diagnosis, and
patient progress monitoring, enhancing clinical
outcomes and resource efficiency.
 Treatment services module – it encompasses
components such as (i) hemodialysis management,
which optimises hemodialysis treatment scheduling,
monitoring, and documentation, enhancing patient
safety through meticulous tracking of treatment
parameters and outcomes; (ii) surgical anesthesia
management, which streamlines planning,
administration, and monitoring of anesthesia in
surgical procedures, ensuring accurate dosages to
mitigate complication risks; and (iii) intensive care
management, which enable healthcare professionals
to effectively monitor and manage critically ill
patients, streamlining vital sign tracking, medication
administration, and patient progress, thus bolstering
informed decision-making and treatment
optimisation.
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(ii) Integrated Solution Services projects main ly involving hardware and third-party software
systems integration services:
Sector
Relevant Integrated
Solution Services project Key features which correspond to the sector
Digital education Safe campus construction project
in Lichuan County
The digital education integration services provided by
the Group aimed to elevate educational quality and
optimise resource allocati on by synchronising, storing
data, and enhancing communication and teaching
efficiency between teachers and students. Examples of
notable modules include tailored user interfaces for
lesson preparation and te aching modes; cloud storage
support for remote access to teaching materials; VR
technology and digital information integration for
immersive remote interactive classrooms; central
management and deployment strategies for digital
classroom devices; and compatibility with various
teaching equipment, such as interactive intelligent
devices and integrated projector whiteboards.
Digital grain
depots
Intelligent grain depot upgrade and
reconstruction project
The digital grain depot integration services provided by
the Group features an assortment of modules, including
IoT granary sensors for tracking inventory levels, aging,
and monitoring food safety parameters such as heavy
metal concentrations and other contaminants. This
ensures up-to-date statistics through efficient
classification management. Moreover, the system
provides energy consumption data and automated
temperature control system, enabling optimal storage
temperatures for grains and foodstuffs, minimising
waste. Additionally, the digital grain depot systems
incorporate data security modules with blockchain
technologies, guaranteeing the accuracy and integrity
of the stored information.
Set out below is a case study example to further illustrate the Group ’s service offerings
under its Integrated Solution Services business sub-segment:
Digital Urban City Management Platform
During the Track Record Period, the Group successfully completed two Integrated Solution
Services projects for Customer B ’s digital urban city management initiative. The projects
involved designing, developing, and customising the Digital Urban City Management Platform.
The Group also procured and integrated hardware and software systems, providing
comprehensive after-sale technical support. The Digital Urban City Management Platform is
primarily utilised for enforcement and urban city management, with specific functionalities
determined by the integrated modules. The Digital Urban City Management Platform utilises
digital technologies such as big data analytics, discriminative AI and IoT to address the specific
needs of its target customers, including government authorities. It enhances data collection,
streamlines reporting systems, and improves working efficiency for government authorities. The
platform enhances law enforcement operations through advanced surve illance capabilities,
enables efficient resource allocation and management, and facilitates informed decision-making
by consolidating and analysing a large volume of data. By providing a synchronised and
collaborative platform, it improves overall urban city management and supports effective
governance.
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The following diagram illustrates the operational concept of the Digital Urban City
Management Platform:
Urban City
Management
Department
Law Enforcement
Department
Environmental
Hygiene
Department
Public Services
Department
Surveillance/
smart analytics
Mobilised
patrolling vehicles
Identification of urban security
and management resources
Convergence of
data and information Events handling
Synchronised and collaborative platform
Analysis
Commanding
Tracking
Feedback
Data analyticsSmart mobile
terminals
IoT/
smart sensors
Features and functionalities of the Digital Urban City Management Platform
The Digital Urban City Management Platform offers a range of features and functionalities
that leverage technologies such as big data analytics, discriminative AI and the IoT to enhance
its performance. Below is an overview of these features:
(a) Big data collection: The Digital Urban City Management Platform collects a vast
amount of data from diverse sources, including strategically deployed surveillance
cameras and sensors. With the ability to inte grate different modules, it gathers data
related to enforcement and various aspects of urban city management. This includes
information on crimes, environmental hygiene and emergency incidents, etc. By
comprehensively gathering data, the platform provides a holistic view of the urban
security and environment, supporting informed decision-making.
(b) Data integration, processing, and analysis: The Digital Urban City Management
Platform excels in se amlessly integrating, processing and analysing the vast amount
of data it collects. It establishes a unified framework for effective data management,
employing advanced algorithms and st atistical techniques. By organising and
aggregating the data, the platform uncovers hidden patterns, trends, correlations, and
anomalies that are crucial for informed decision-making in enforcement and urban city
management. These data-driven insights empower stakeholders to gain a
comprehensive understanding of various urban dynamics and optimise their strategies
accordingly.
(c) Real-time monitoring and predictive analytics: The Digital Urban City Management
Platform offers robust real-time monito ring capabilities, continuously analysing
incoming data. Leveraging advanced algorithms and predictive analytics techniques,
it swiftly detects and predicts events or sit uations that require immediate attention. By
identifying incident hotspots and abnormal conditions relevant to urban security and
management, the platform enables quick and effective response measures. It
generates alerts and notifications, ensuring public safety and mitigating risks.
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Major modules of the Digital Urban City Management Platform
The Digital Urban City Management Platform serves as a comprehensive urban city
management tool for government authorities. It consists of multiple system modules tailored to
specific functionalities. Details o f major modules are set out as follows:
(a) Security and crime prevention
 Surveillance cameras are strategically deployed throughout the jurisdiction,
including installation in public spaces and patrolling vehicles, to collect
photographic information. The collected images undergo preprocessing to
improve their quality and reduce distortion. Subsequently, through image
analysis and data conversion processes, relevant features, such as objects or
individuals, are extracted from the real-time images. These extracted features
are then subjected to algorithmic anal ysis, enabling the identification of
movement patterns, detection of suspicious activities, and recognition of
potential security threats. When suspicious activities are detected, it generates
immediate response and automatically triggers alerts for the law enforcement
department to deploy relevant personnel to the incident location to undertake
corrective actions. Further, the insights obtained from this analysis empower the
enhancement of security measures, optimisation of human resource allocation,
and allocation of additional personnel to monitored areas, effectively preventing
or minimising criminal incidents.
(b) Construction site management
 Surveillance cameras deployed in the const ruction site capture real-time images
of construction sites, which undergo an analog-to-digital conversion process in
which the analog signals are converted into digital data by the system. The
images are first preprocessed to enhance quality and reduce distortion. Relevant
features, such as objects and safety hazards, are then extracted from the
images. Through algorithms the extracted features are analysed and classified
accordingly. The resulting data is structured and represented in a format that can
be easily processed and interpreted. Users can leverage this converted data to
make informed decisions and take immediate actions. For instance, if a safety
hazard is detected, authorities can pro mptly alert construction companies or
personnel and enforce corrective measures.
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 On-site noise detection sensors deployed in the construction site are connected
to a data acquisition system which converts the analog signals captured into
digital format. The digital data is processed by applying techniques like filtering
and signal analysis to extract relevant noise level information. Algorithms are
utilised to calculate noise levels, and these calculated noise levels are compared
against the permissible limits set by local noise regulations. This comparison
enables the identification of specific periods or timeframes that the noise levels
consistently exceed the acceptable thresholds. This information can enable
relevant local government authorities to impose penalties on non-compliant
construction companies or implement relevant noise reduction measures near
the construction sites to minimise disturbance to nearby residents or businesses.
 On-site dust sensors installed in the construction site are connected to a data
acquisition system which processes the digital data by applying techniques such
as filtering and calibration to extract dust level information. Dust levels in the
construction sites are monitored by using devices connected by IoT technology.
Similar to the noise detection sensors, the platform can monitor the amount of
discharged pollutants at the construction sites according to the scale and nature
of the construction project, taking into account the complexity of the terrain, the
wind direction, the layout of pollution sources and the environmental air
protection objectives by generating real-time information, alerts and queries in
case of abnormalities detected.
(c) Street order management
 Surveillance cameras are depl oyed throughout the juris diction to capture real-
time footage of street activities. The i mages captured by the cameras undergo an
analog-to-digital conversion process in which the analog signals are converted
into digital data. The processed image data can be transmitted over networks for
storage or further analysis in the system. Algorithms can be applied to extract
meaningful information from the image data within the system, allowing for the
analysis and identificatio n of unauthorised street ven dors and illegal peddlers.
This module can enable users to detect patterns, behaviors, and anomalies
associated with street order violations, such as illegal hawker activities.
Government authorities can then decide whether to carry out enforcement
actions.
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User interface
Set out below is a screen shot of the user interface of the abovementioned Digital Urban
City Management Platform which had been applied to the digital government and digital
surveillance sectors, showing a sample of the system overview:
Function menu
Enforcement
related
operational
statistics
Urban city
management
statistics and
trends
Industry-specific
regulatory statistics
Environmental hygiene
facilities statistics
Public services
statistics
Emergency
response
statistics
Law
enforcement
statistics and
trends
System Maintenance Services
T o further enhance the services offered under the Digitalisation Solution Services business
segment, the Group would also provide commissioned technical support and maintenance
services for the hardware and software systems delivered under its Integrated Solution Services
projects to ensure those systems are performing properly. Depending on the specific
requirements of the customers, the Group ’s System Maintenance Services generally include (i)
day-to-day system and network maintenance and data back-up support services; (ii) 24/7
technical support and consulting services; (iii) system migration solution services; and (iv)
emergency trouble shooting services. When required, the Group would also provide on-site
support services by sending technical personnel to the end users ’ premises. During the Track
Record Period, the length of the System Maintenance Services projects undertaken by the
Group generally lasted for four to five years.
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Software Solution Services
Software Solution Services focus on (i) sale of self-developed software and (ii) delivering
customised software devel opment services. The Group ’s software solutions are designed to
assist in streamlining and automating operational tasks of end users. The Group has the
capability to offer its self-developed software a nd/or deliver customised software development
services, sometimes with the assistance of third-party software programmers, which suit the
needs of end users across various sectors, such as di gital healthcare, digital government, digital
industrial management and digital telecommunications construction. T o meet the demands and
requirements of its customers, the software solutions provided by the Group encompass
software system platform and sector-specific software modules (to be incorporated as
components of the software system platform ) which are suitable for and able to perform
different tasks for end users in different key sectors. As such, this business sub-segment
concentrates on the research, design, and coding that culminates in software creation and
customised development. For further details of the Group ’s research and development
processes, please refer to the paragraphs headed ‘‘Research and development ’’ in this section.
As confirmed by the Directors, the table below sets out some examples of the Group ’sm a j o r
sector-specific projects that the Group had un dertaken under its Software Solution Services
business sub-segment during the Track Record Period:
(i) Software Solution Services projects i nvolving sale of self-developed software
Sector
Relevant Software
Solution Services project Key func tions which correspond to the sector
Digital industrial
management
Digital industrial park management
platform procurement project
The industrial park management platform aims to provide a
one-stop solutions platform offering a centralised
management tool to manage various business functions
within an industrial park. Its key functional modules include
but not limited to:
 Building management module – facilitates the rapid
registration, categorisation, and tracking of the industrial
park ’s fixed assets such as produc tion facilities, venues,
offices and residential complexes.
 Room management module – complementary with the
building management module, it provides precision room
management and control down by enabling detailed
administration of critical data points, including room-
specific rentable space, rental rates, property
management fees, occupancy status, and vacancy
duration metrics.
 T enant management module – it is designed to enable
seamless integration with individual tenants ’ account
information. It facilitates the configuration and
administration of partitioned industrial park zones,
promoting efficient and highly targeted management
strategies.
 Leads management module – it encompasses advanced
tracking mechanism for business development information
leads, as well as algorithms for configuring and prioritising
leads based on client-specific data. The system
dynamically displays activat ed leads, enabling efficient
personnel assignment for monitoring business
development.
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Sector
Relevant Software
Solution Services project Key func tions which correspond to the sector
Digital industrial
management
2022 industrial cloud platform
agreement
The industrial IoT data fusion management platform serves
as a digital government solution providing data integration
across various application systems. Its key functional
modules include but not limited to:
 Category management module – it intends to streamline
the organisation and classification of diverse IoT devices
based on their specific function ality, facilitating efficient
identification and deployment.
 Physical model management module – it intends to
manage the digital representation of physical IoT devices,
enabling accurate modeling and simulation of device
behavior within the platform.
 Message transformation module – it intends to convert
and standardise communication protocols between IoT
devices and the platform, ensuring seamless
interoperability and data exchange.
 Transparent access module – it intends to enable the
direct and secure connection of IoT devices to the
platform, while maintaining the original data format,
ensuring seamless integration and minimal latency.
 Data visualisation module – it intends to translate complex
IoT data sets into visually intuitive representations,
enabling end users to make informed decisions based on
real-time analytics and insights.
Digital
telecommunications
construction
Visual monitoring and management
platform services
The visual monitoring management platform aims to utilise
the blockchain credible certificate depository traceability
function to monitor and analyse the big data relating to
costs, output and progress within the business life cycle of
telecommunications constructi on. Its key functional modules
include but not limited to:
 Personal computer-interface business module – it
visualises a user-friendly int erface which facilitates the
inspection and analysis of raw data related to different
stages of an information infra structure project, presents
and analyses detailed performance metrics and payment
and receipt information, and generates output value
specifics. By providing a co mprehensive review and in-
depth analysis of these critical data points and key
performance indicators, such as financial receipts,
operational costs, and overall output value, it enables
improved decision-making and project management
through advanced computational algorithms. The
Directors believe that the platform can allow optimisation
of resources and enhance operational efficiency of project
management.
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(ii) Software Solution Services projects involving provision of customised software
development services
Sector
Relevant Software
Solution Services project Key func tions which correspond to the sector
Digital healthcare Digital hospital outpatient
management platform (stage 1)
system integration service
procurement agreement
Digital hospital inpatient
management platform (stage 2)
system integration service
procurement agreement
The digital hospital outpatient management platform seeks to
enhance patient satisfaction, improve clinical efficiency, and
reduce operational costs, ultimately transforming the outpatient
experience into a more convenient, efficient, and accessible
system for both patients and healthcare providers. Its key
functional modules include but not limited to:
 Outpatient registration system – it captures patient
demographics and contact details during registration and
efficient queue management reduces wait times and
ensures smooth patient flow. Integration with electronic
health records allows seamless updating and retrieval of
medical records. Also, the module generates insightful
reports and analytics, allowin g hospital administrators to
monitor key performance indicators and continuously
improve outpatient services.
 Inpatient registration system – it provides a seamless
process for patient transferring from outpatient care to
inpatient care or directly admitting for planned procedures
or treatments. Key functions include capturing patient
information, assigning beds and rooms, and managing
transfers or discharges. Th is system ensures efficient
utilisation of hospital resource s, facilitates communication
among healthcare providers, and optimises patient care by
maintaining accurate and up-to-date medical records
throughout the inpatient stay.
 Patient record system – it manages and stores
comprehensive electronic health records for patients,
containing medical history, diagnoses, medications,
treatments, and test results. It improves information
accessibility, facilitates care coordination among healthcare
providers, and supports inform ed clinical decision-making.
Working in tandem with the outpatient and inpatient
registration systems, it ensures that newly registered
patients ’ records are created or updated, and that
registered patients maintaining consistent and up-to-date
records throughout the care journey.
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Sector
Relevant Software
Solution Services project Key func tions which correspond to the sector
D i g i t a l g o v e r n m e n t Public opinion big data
monitoring cloud platform
custom develo pment service
The public opinion big data monitoring cloud platform aims to
collect, analyse, and visualise vast amounts of online data,
including news articles, social media posts, and forum
discussions, to track public sentiment and trends related to
specific topics, brands, or events. Its key functional modules
include but not limited to:
 Daily hotspot analysis system module – it is designed to
identify and analyse trending topics, popular search terms,
and viral videos in real-time, providing users with valuable
insights into the latest developments and public interests.
With key components like selected hotspot information
system, the module curates and presents top trending news
and articles from various sour ces. The hot keyword search
function features tracking of popular search queries, helping
users understand current interests and concerns. Lastly, the
trending video tracking function identifies and showcases
viral video content, offering a glimpse into what ’sc a p t u r i n g
the public ’s attention.
 Intelligence search system module – it aims to provide a
comprehensive platform designed to provide users with
easy access to a wealth of information, including research
reports, industry data, and trending insights. With key
components like intelligence search engine, the module
enables users to efficiently search and retrieve relevant
information from various sources. The data system priorities
trending data sets and statistics, helping users to stay
informed on the latest developments and popular topics. By
integrating these components, the intelligence search
system serves to empower organisations and individuals to
make informed decisions, gain a competitive edge, and stay
ahead in their respective fields.
Set out below is a case study example to further illustrate the Group ’s service offerings
under its Software Solution Services business sub-segment:
Public Opinion Analysis Software Platform
During the Track Record Period, the Group undertook a Software Solution Services project
for Customer A ’s public opinion big data monitoring cloud platform. As part of the service
offerings, the Group developed and customised the Public Opinion Analysis Software Platform,
provided software system design, planning, and testing services, and provided daily
maintenance and after-sales technical support to users. The Public Opinion Analysis Software
Platform leverages digital technologies such as big data analytics, discriminative AI and cloud
computing to meet to the specific needs of government authorities and commercial enterprises
and facilitates users ’ decision-making processes.
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Features and functionalities of the Public Opinion Analysis Software Platform
The Public Opinion Analysis Software Platfor m provides a comprehensive solution that
includes big data collection, integration, processing and analysis. It collects and integrates user-
specified data from various internet sources, and uses big data analysis algorithms to analyse
the data and provide insights into public sentiment. Data integrity and security are ensured
through secure storage on a cloud database. Decision makers can make informed strategic
decisions based on the analysed public sentiment and feedback. In addition, the platform acts
as a centralised avenue for monitoring of public sentiment in real time, enabling users to monitor
public reactions and sentiment across the web as events unfold.
End-usage of the Public Opinio n Analysis Software Platform
The Public Opinion Analysis Software Platform meets to the needs of government
authorities and commercial enterprises, offering a range of applications in decision-making,
understanding public behavior, crisis and risk management, public relations management,
branding and reputation management, market r esearch, consumer insights, and public
engagement and participation.
(a) Example of public use
When a government authority introduces a new policy, the platform plays a critical role in
monitoring public sentiment and facilitating effective communication. It automatically collects
public opinion data from the internet, particularly the key social media platforms and conducts
comprehensive analysis, categorising sentiments and providing valuable insights. This enables
the government to understand public concerns in a timely manner. Furthermore, the platform
provides valuable support to enforcement departments. By proactively analysing public opinion
data on the internet, it detects and predicts adverse events and alerts users to specific risks.
This enables authorities to take timely action to mitigate risk, facilitating effective risk
management. The platform ’s ability to monitor public sentiment on the internet helps ensure that
government actions are responsive and in line with public sentiment.
(b) Example of commercial use
The platform provides valuable support to commercial enterprises throughout the product
lifecycle. When launching a new product, it supports market research by analysing consumer
preferences and sentiments, enabling companies to tailor their product accordingly. It also
assesses public sentime nt towards the company ’s brand and competitors online, providing
insights that inform branding and marketing strategies. Once a product is launched, the platform
continues to play an important role. It collects public opinion data and customer feedback from
the internet, with a focus on key social media platforms. Through comprehensive analysis, the
platform provides decision-makers with the information they need to make informed decisions
about product iterations, enhancements and customer satisfaction. In addition, the platform
actively captures and analyses consumer feedback while monitoring competitor information on
specific platforms, including social media channels. Using data analytics, its functional modules
classify public opinions as positive, negative or neutral based on language analysis. This
valuable insight enables commercial enterprises to formulate targeted marketing strategies,
develop effective public relations campaigns and increase their competitiveness in the
marketplace.
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User interface
Set out below is a screen shot of the user interface of the Public Opinion Analysis Software
Platform which had been applied to the digital government sector, showing a sample of the
system overview:
Public
opinions
statistics by
nature
Function
menu
Movement
in number
of public
opinions
Public
opinions
statistics by
source
SALES AND MARKETING
Sales and marketing
The Group ’s T elecommunications Infrastructure Services projects are generally awarded by
way of open tenders which the Group would normally solicit via online platforms. T enders
submitted in respect of a project would then be assessed based on the applicant ’s qualifications,
skills and experiences to determine if they are capable of fulfiling the requirements as stipulated
in the tender documents together with their tender price. Meanwhile the Group ’s Digitalisation
Solution Services projects during the Track Record Period were generally obtained through
single-source procurement or by the way of responding to invitation to quote, whereby the
customer would, due to their past dealings with the Group, directly approach the Group to solicit
its services. Single-source procurement is one of the procurement methods adopted by the
Group ’s customers, who are generally state-owned enterprises, in which a pre-selected supplier
would be invited to engage in arm ’s length negotiations with the customer to determine the
contract terms and pricing for a particular project. As advised by the PRC Legal Advisers, this
procurement method generally applies when the p roject satisfies certain procurement
requirements and conditions of the Group ’s customer, for example, when the supplier is a pre-
approved supplier of the customer, when the project involves specific requirements (such as
certain types of information and communications related technology), or when there is
insufficient number of bidders for the particular project.
While the Group competes with other integrated service providers, the Directors believe
that the Group will continue to successfully capture business opportunities as they arise given
that the Group has operated in the T elecommunications Infrastructure Services industry for more
than 20 years and has well-established business relationships with its customers along with a
strong industry wide reputation and track record for delivering quality service.
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The high entry barriers of the telecommunications industry and the digitalisation solution
services industry in the PRC have resulted in a highly customer concentrated nature of both of
these industries. Due to the high entry barriers in these industries in the PRC, both of the
T elecommunications Infrastructure Services and Digitalisation Solution Services business
segments exhibit a highly concentrated customer base. Recognising this concentration, the
Group is actively pursuing the collaboration with the fourth largest telecommunications network
operator in the PRC which holds a significant position within the industries as it operates a 5G
network and a nationwide cable TV network.
Regarding the T elecommunications Infrastructure Services business segment, the Group
primarily targets telecommunications network operators in the PRC as potential customers. The
Group plans to establish its relationship with th e fourth largest telecommunications network
operator in the PRC and actively pursue T elecommunications Infrastructure Services projects
from this operator. Additionally, alongside its expansion plan in the Western Region, the Group
will continue to develop its customer base by cultivating business relationships with other
regional subsidiaries/branches of the Big Three, who are key players in the telecommunications
industry.
Regarding the Digitalisation Solution Services business segment, the Group ’s potential
customers include telecommunications network operators, local government entities, hospitals
and schools in the PRC. T o engage with these stakeholders, the Group will actively participate
in industry trade shows and exhibitions to showcase its service offerings and successful track
record. It aims to establish relationships with local governments, hospitals, schools, and other
key stakeholders involved in urban development and smart city initiatives. By conducting
research on each local government ’s smart city plans and ongoing projects, the Group aims to
tailor unique proposals to address their specific needs. The Group also intends to maintain
business relationships and explore new opportunities with the regional subsidiaries/branches of
the Big Three which were the Group ’s major customers in this business segment in each year
during the Track Record Period. In addition, the Group will explore business opportunities with
commercial enterprises as certain of its software systems, such as the Public Opinion Analysis
Software Platform, can be adapted in other comme rcial settings, details of which are set out in
the paragraphs headed ‘‘Principal services and business model – Digitalisation Solution
Services – Software Solution Services ’’ in this section. Furthermore, the Group will strengthen
its relationship with the fourth largest telecommunications network operator in the PRC to
pursue Digitalisation Solution Services projects. In October 2023, the Group successfully
secured three Digitalisation Solution Serv ices projects in Jiangxi Province from this
telecommunications network operator, marking the Group ’s entry into this collaboration. Moving
forward, the Group aims to expand its project portfolio by pursuing additional projects from this
operator across different business segments and geographical locations in the future.
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The Directors believe that the Group ’s proven track record, exper ience and strong research
and development skills enable it to tailor solut ions that satisfy the varying needs of its
customers. In order to reinforce the Group ’s corporate image and reputation within these
industries and to attract and source new customers, the Group will (i) actively participate and
engage in industry trade shows and exhibitions to showcase the Group ’s service offerings and
successful track record; and (ii) compete for vari ous industry awards to increase its exposure
and recognitions among the market players. In addition, the Group intends to raise its public
profile through (i) maintaining and regularly u pdating the company website; (ii) producing and
publishing industry and press articles and videos; and (iii) organising sales and marketing
campaigns to connect with existing and potential customers. Most importantly, the Group ’s
management will continue to maintain regular communications with its customers and industry
players to keep abreast of the latest development in the market and to understand customers ’
needs.
Furthermore, the Group will continue to (i) focus on developing new customers within
Jiangxi Province through strengthening its research and development capabilities and improving
its liquidity position and financial capabilities; and (ii) expand in other provinces and regions
such as Guangdong Province and Anhui Province through strategic acquisitions, details of which
are more particularly set out under the paragraph headed ‘‘Business strategies ’’in this section.
Pricing policy
The Group generally adopts a cost-plus pricing model when determining its bid/offer prices
quoted in the tender documents for its Infrastructure Construction Services and Infrastructure
Maintenance Services projects after taking int o account factors such as (i) the nature, scale,
complexity and location of the relevant projects; and (ii) the estimated costs for the procurement
of labour services and ancillary construction materials. However, for its Infrastructure
Construction Services projects , the Ministry of Industry and Information T echnology of the PRC
would issue various notices from time to time which set out standard rates for different types of
w o r k st ob ep e r f o r m e d ,a n dt h eG r o u p’s customers would also set out benchmark prices for the
relevant projects which the Group would use as reference when determining its bid/offer prices
for projects under this business sub-segment. In determining the offer/agreeable prices for the
Digitalisation Solution Services projects, the Group would generally take into account the
estimated prices its customers are willing to pay and other factors such as (i) in relation to the
Group ’s Integrated Solution Services projects only, the estimated costs for the procurement of
hardware and third-party software systems; (ii) (if applicable) the relevant research and
development expenses incurred in designing, developing, testing and commissioning of the
software systems; (iii) the scale and timeframe requ ired for provision of integration and technical
support services; (iv) the credit term required by its customers; and (v) the contract prices of the
Group ’s similar projects.
As confirmed by the Directors, the Group did not experience any loss-making projects
during the Track Record Period and up to the Latest Practicable Date.
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Credit policy and payment methods
The Group generally grants its customers credit periods of up to 30 days and payment is
normally effected by way of bank transfers. The credit period granted by the Group to each
specific customer generally depends on a number of criteria, such as their past payment
records, the Group ’s business relationship with the particular customer and their background
and financial strength. As confirmed by the Di rectors, having considered the business
relationships with the customers as well as their established background, the Group generally
a g r e e st oe x t e n dt h ec r e d i tp e r i o dt ou pt o9 0d a y s ,i nv i e wo ft h et i m e f r a m er e q u i r e df o rt h e
customers to complete their internal procedures for processing the payments. During the Track
Record Period, the Group has undertaken an Integrated Solution Services project for which a
payment term of up to five years has been granted. As confirmed by the Directors, such
prolonged payment term was provided at the special request of the customer, because the
project was part of an upgrading and renovation project in respect of a public hospital, the
payment of which would therefore be subject to receipt of payment by the customer from the
local government.
The Group reviews its overdue balances and receivable balances on an on-going basis and
an assessment as to whether a provision for impairment of trade receivables would be made by
the Group ’s management after due consideration. Where payment is overdue, the Group would
initially take a variety of remedial actions which may include discussions with the management
team of the customer, disconti nuing its service and/or legal action. For the years ended 31
December 2021, 2022 and 2023, the provision in relation to trade receivables of the Group
amounted to approximately RMB3.2 million, RMB8 .4 million and RMB12.4 million, respectively.
Seasonality
The Group ’s business under its T elecommunica tions Infrastructure Services and
Digitalisation Solution Services business segments are generally subject to seasonality. For the
T elecommunications Infrastructure Services pro jects, as confirmed by the Directors and based
on past experience, the Group ’s major customers would generally place more work orders with
the Group during the second half of the year and require that the actual works to be carried out
on or before the end of the year, and the Group would perform the relevant works (including the
on-site works which are generally performed by its labour suppliers) accordingly. Similarly, for
the Digitalisation Solution S ervices projects, the Group ’s major customers would generally
approach the Group for new projects, particularly for large-scale projects, during the second half
of the year. As further confirmed by the Directo rs, it was mainly due to the fact that the Group ’s
major customers generally tend to invest more in capital expenditure later in the year. As such,
during the Track Record Period, the Group would typically record a higher portion of revenue for
its T elecommunications Infrastructure Services business segment and its Digitalisation Solution
Services business segment during the second half of the year.
PROJECTS
During the Track Record Period, the Group had a total of 322 Completed Projects amongst
which 216 were Infrastructure Construction Services projects, 45 were Infrastructure
Maintenance Services projects, 29 were Integrated Solution Services projects, one was System
M a i n t e n a n c eS e r v i c e sp r o j e c t s ,a n d3 1w e r eS o f t w a r eS o l u t i o nS e r v i c e sp r o j e c t s ;a n da sa t3 1
December 2023, the Group had a total of 116 On-going Projects and Pre-revenue Projects. As
at the Latest Practicable Date, the Group had a total of 345 Completed Projects and 130 On-
going Projects and Pre-revenue Projects, all of which were located across various parts of the
PRC.
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Geographical distribution of the Group ’sp r o j e c t s
The Group was founded in Jiangxi Province in 2002 and has developed into a reputable
integrated service provider and software developer in Jiangxi Province. Leveraging on its
reputation and technical capabilities, the Group has expanded its operations across Jiangxi
Province, Henan Province, Hubei Province, Hunan Province, Guizhou Province, Yunnan
Province, Sichuan Province, Chongqing, Gansu Province, Shaanxi Province, Inner Mongolia
Autonomous Region, Fujian Province, Zhejiang Province, Shanghai, Tianjin, Jilin Province,
Liaoning Province, Shandong Province, Jiangsu Province, Hebei Province, Beijing, Guangdong
Province, Guangxi Zhuang Autonomous Region, Ningxia Hui Autonomous Region and Xinjiang
Uygur Autonomous Region with a goal of becoming a national integrated service provider to the
telecommunications industry and a software developer providing Digitalisation Solution Services.
T h ef o l l o w i n gm a pi l l u s t r a t e st h ep r o v i n c e sa n dm u n i c i p a l i t i e si nt h eP R Ci nw h i c ht h eG r o u p’s
Completed Projects, On-going Projects and Pre-revenue Projects during the Track Record
Period and up to the Latest Practicable Date were situated:
Western Region
Central Region
Eastern Region
Northeastern Region
Number of Infrastructure Construction Services projects /
Infrastructure Maintenance Services projects /
Integrated Solution Services projects /
System Maintenance Services/
Software Solution Services projects
in the respective province or municipality or autonomous region
(   )
Central Region
Jiangxi Province (91/39/34/5/29)
Henan Province (9/1/1/-/-)
Hubei Province (6/-/-/-/-)
Hunan Province (1/1/-/-/-)
Northeastern Region
Jilin Province (4/-/-/-/-)
Liaoning Province (1/1/-/-/-)Western Region
Inner Mongolia Autonomous Region (5/1/-/-/-)
Chongqing (34/7/-/-/-)
Sichuan Province (5/5/-/-/-)
Guizhou Province (12/1/-/-/-)
Yunnan Province (25/4/-/-/-)
Shaanxi Province (12/1/-/-/-)
Gansu Province (3/3/-/-/-)
Guangxi Zhuang Autonomous Region (4/-/-/-/-)
Ningxia Hui Autonomous Region (2/-/-/-/-)
Xinjiang Uygur Autonomous Region (1/-/-/-/-)
Eastern Region
Tianjin (2/-/-/-/-)
Shanghai (44/-/1/-/-)
Zhejiang Province (46/6/-/-/-)
Fujian Province (7/-/-/-/-)
Shandong Province (2/1/-/-/-)
Jiangsu Province (3/2/-/-/-)
Hebei Province (1/1/-/-/-)
Beijing (2/-/-/-/-)
Guangdong Province (10/-/-/-/-
)
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Set out below is a breakdown of the Group ’s revenue during the Track Record Period by
geographical location of its projects:
Year ended 31 December
2021 2022 2023
Revenue
Percentage
of total Revenue
Percentage
of total Revenue
Percentage
of total
RMB’000 % RMB ’000 % RMB ’000 %
Central Region (Note 1)
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 1 8 8 , 8 7 3 3 9 . 3 % 9 4 , 9 7 7 2 2 . 9 % 1 9 0 , 3 1 7 3 1 . 2 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ 2 4 , 1 9 5 5 . 0 % 2 6 , 0 1 6 6 . 3 % 3 0 , 8 6 5 5 . 1 %
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. 1 0 7 , 3 6 4 2 2 . 3 % 1 0 , 1 4 7 2 . 4 % 4 1 , 2 5 8 6 . 8 %
– S y s t e mM a i n t e n a n c eS e r v i c e s . ............................ 1 , 9 6 3 0 . 4 % 2 , 0 4 4 0 . 5 % 4 7 0 0 . 1 %
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... –– 58,399 14.1% 66,216 10.8%
322,395 67.0% 191,583 46.2% 329,126 54.0%
Western Region (Note 2)
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 6 5 , 2 9 0 1 3 . 6 % 1 4 3 , 6 7 6 3 4 . 6 % 1 6 7 , 5 3 1 2 7 . 5 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ 9 6 6 0 . 2 % 6 , 7 5 9 1 . 6 % 3 , 9 4 8 0 . 7 %
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. ––––––
– S y s t e mM a i n t e n a n c eS e r v i c e s . ............................ ––––––
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... ––––––
66,256 13.8% 150,435 36.2% 171,479 28.2%
Eastern Region (Note 3)
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 9 0 , 4 6 7 1 8 . 8 % 7 0 , 4 6 5 1 7 . 0 % 1 0 5 , 3 0 9 1 7 . 3 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ –– 450 0.1% 3,177 0.5%
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. ––––––
– S y s t e mM a i n t e n a n c eS e r v i c e s . ............................ ––––––
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... ––––––
90,467 18.8% 70,915 17.1% 108,486 17.8%
Northeastern Region (Note 4)
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ –– 159 0.0% 210 0.0%
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ ––––––
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. ––––––
– S y s t e mM a i n t e n a n c eS e r v i c e s . ............................ ––––––
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... ––––––
–– 159 0.0% 210 0.0%
Total ............................................... 479,118 100.0% 413,091 100.0% 609,301 100.0%
Notes:
1. During the Track Record Period, the locations within the Central Region in which the Group had generated
revenue included Jiangxi Province, Henan Province, Hubei Province and Hunan Province.
2. During the Track Record Period, the locations within the Western Region in which the Group had generated
revenue included Guizhou Province, Yunnan Province, Inner Mongolia Autonomous Region, Guangxi Zhuang
Autonomous Region, Chongqing, Sichuan Province, Shaanxi Province and Gansu Province.
3. During the Track Record Period, the locations within the Eastern Region in which the Group had generated
revenue included Shanghai, Tianjin, Hebei Province, Jiangsu Province, Zhejiang Province, Fujian Province,
Shandong Province and Guangdong Province.
4. During the Track Record Period, the location in which the Group had generated revenue within the Northeastern
Region was Jilin Province.
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During the Track Record Period, the Central Region was the largest revenue contributor to
the Group. The Group ’s revenue derived from the Central Region was approximately RMB322.4
million, RMB191.6 million and RMB329.1 million f or the years ended 31 December 2021, 2022
and 2023 respectively and accounted for approximately 67.0%, 46.2% and 54.0% of the Group ’s
revenue for the corresponding years, respectively. Its high revenue contribution from the Central
Region is primarily attributable to the fact that the Group possesses a strong established
presence in Jiangxi Province, thus it has been able to continuously capture business
opportunities in Jiangxi Province as they arise. The Group successfully leveraged its
advantages in Jiangxi Province to expand its business operations into the Digitalisation Solution
Services business segment. Throughout the Track Record Period, most of the revenue
generated from the Digitalisation Solution Services business segment was derived from Jiangxi
Province. The Group experienced a significant decrease in revenue from the Central Region for
the year ended 31 December 2022, compared to the previous year. The decrease was primarily
due to the completion of a substantial portion of t he provincial transmission pipeline construction
engineering project in 2021. Also, the COVID-19 pandemic presented challenges for the Group
as its customer placed fewer work orders, which impacted the Group ’s revenue from the Central
Region during the same year. Although the Group successfully secured another sizable
transmission pipeline construction engineering project in 2022, only a small portion of contract
sum of such project has been recognised as revenue. Further, for the Digitalisation Solution
Services business segment, the Group had prio ritised Software Solution Services over
Integrated Solution Services projects in 2022, taking into account the customers ’ demand and
the limited resources available during that period. By focusing on Software Solution Services
projects, the Group avoided substantial capital requirements for hardware and equipment
purchases associated with Integrated Solution Services projects, thereby enhancing liquidity.
The contract sum of the Software Solution Services projects was generally lower than that of the
Integrated Solution Services projects as the Software Solution Services projects do not require
purchases of hardware, this interim measure also contributed to the decrease in the Group ’s
revenue for the year ended 31 December 2022.
During the Track Record Period, the Western Region and the Eastern Region played
important roles in contributing to the Group ’s revenue. The Western Region was the second-
largest revenue contributor, with revenue of a pproximately RMB66.3 million, RMB150.4 million
and RMB171.5 million, which accounted for a pproximately 13.8%, 36.2% and 28.2% of the
Group ’s revenue for the years ended 31 December 2021, 2022 and 2023, respectively. The
revenue growth was due to the Group ’s successful expansion of business operations in Yunnan
Province, which has been a key factor in driving revenue growth in the Western Region. The
Directors believe that Yunnan Province ’s relatively underdeveloped telecommunications
infrastructure presents prom ising prospects for the Group ’s T elecommunications Infrastructure
Services. Along with the strong relationshi ps with key players in the industry, the Group ’sf o c u s
on pursuing business opportunities in the rapidly d eveloping telecommunications infrastructure
services industry in Yunnan Province enabled it to capitalise on rising demands for
telecommunications services, thereby signific antly increased its revenue from Yunnan Province
during the Track Record Period. In the future, the Group intends to continue to ride on the
development trend and expand its business throughout the Western Region gradually.
BUSINESS
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Aside from Yunnan Province, the Group has also expanded its presence into other regions
and provinces such as Zhejiang Province, Shanghai and Fujian Province in the Eastern Region.
During the Track Record Period, the Eastern Region was the Group ’s third-largest revenue
contributor, with revenue of approximately RMB90.5 million, RMB70.9 million and RMB108.5
million, which accounted for approximately 18.8%, 17.1% and 17.8% of the Group ’s revenue for
the years ended 31 December 2021, 2022 and 2023, respectively. The majority of the revenue
from the Eastern Region during this period came from the T elecommunications Infrastructure
Services business segment. The Directors believe that the Group ’s success in the Eastern
Region has been driven by its expertise in the T elecommunications Infrastructure Services
industry, which it has leveraged to establish itself as a reliable and high-quality service provider,
and in turn allowing the Group to secure new projects from the Big Three.
By leveraging its strengths and staying ahead of the competition, the Group was able to
increase its revenue in different regions across the PRC and reduce its dependence on any
single region. The Group ’s ability to adapt to changing market conditions would prepare the
Group for future expansions in other provinces of the PRC.
Size of the Group ’sp r o j e c t s
Set out below is a breakdown of the Group ’sp r o j e c t sb yp r o j e c ts i z eb a s e do nt h e
maximum or estimated contract value of each pro ject during the Track Record Period and up to
the Latest Practicable Date:
Year ended 31 December
From
1 January 2024 up
to the Latest
Practicable Date2021 2022 2023
No. of projects No. of projects No. of projects No. of projects
Telecommunications Infrastructure Services
– Infrastructure Construction Services
≥R M B 1 0 0m i l l i o n ..................................... 2111
≥RMB50 million – <RMB100 million .......................... – 344
≥RMB25 million – <RMB50 million ........................... 1 2 1 4 1 1 9
≥RMB10 million – <RMB25 million ........................... 1 9 1 9 2 5 2 0
<RMB10 million ...................................... 8 6 1 1 3 1 5 6 8 1
Others (Note) ........................................ 1 9752
138 157 202 117
– Infrastructure Maintenance Services
≥R M B 1 0 0m i l l i o n ..................................... ––––
≥RMB50 million – <RMB100 million .......................... ––––
≥RMB25 million – <RMB50 million ........................... 2 2 ––
≥RMB10 million – <RMB25 million ........................... 1544
<RMB10 million ...................................... 2 3 2 6 3 0 1 7
Others (Note) ........................................ 6246
32 35 38 27
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Year ended 31 December
From
1 January 2024 up
to the Latest
Practicable Date2021 2022 2023
No. of projects No. of projects No. of projects No. of projects
Digitalisation Solution Services
– Integrated Solution Services
≥RMB10 million ...................................... 3 –––
≥RMB6 million – < R M B 1 0m i l l i o n ........................... 1 – 1 –
≥RMB3 million – <RMB6 million ............................ 3471
< R M B 3m i l l i o n ....................................... 5682
12 10 16 3
– System Maintenance Services
≥RMB10 million ...................................... ––––
≥RMB6 million – < R M B 1 0m i l l i o n ........................... 1 1 1 –
≥RMB3 million – <RMB6 million ............................ ––––
< R M B 3m i l l i o n ....................................... 1144
2254
– Software Solution Services
≥RMB10 million ...................................... – 2 ––
≥RMB6 million – < R M B 1 0m i l l i o n ........................... – 431
≥RMB3 million – <RMB6 million ............................ –– 81
< R M B 3m i l l i o n ....................................... – 88 –
– 14 19 2
Total ............................................ 184 218 280 153
Note: For certain T elecommunications Infras tructure Services projects of the Group during the Track Record Period, the
contract value was not specified in the relevant agreement, and thus the contract value of such projects would be
determined based on the actual quantity of works carrie d out by the Group pursuant to the relevant work order(s)
placed by the customer during the relevant year/period.
The majority of the Group ’s large-scale projects, being those with a contract value of
RMB25.0 million or above, were for its Infrastru cture Construction Services business sub-
segment. These projects, in particular those primarily related to cable installation or access
network related works, were particularly large in scale as they generally required the Group to
provide Infrastructure Construction Services across a particular province.
The Group ’s Infrastructure Maintenance Services projects were in general of a relatively
smaller scale, being projects with a contract value of less than RMB10.0 million, as these
contracts mainly relate to repair and restor ation works for telecommunications network
infrastructure within a confined area or for a number of locations. However, two of the Group ’s
Infrastructure Maintenance Services projects were of a relatively large-scale, and under these
projects, the Group was required to provide comprehensive Infrastructure Maintenance Services
covering a large number of regions within Jiangxi Province.
BUSINESS
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The Group ’s Digitalisation Solution Services proje cts were generally of a smaller scale with
a contract value of less than RMB10.0 million, as t hey were not as capital and labour intensive
when compared to the Group ’s T elecommunications Infrastructure Services projects. Further, the
Group ’s Integrated Solution Services projects generally have a higher contract value than the
Software Solution Services projects because Integrated Solution Services projects involve the
procurement and installation of hardware systems, which contributes to a higher overall cost of
the projects. During the Track Re cord Period, three of the Group ’s Integrated Solution Services
projects were of a relatively l arge-scale and with a contract va lue over RMB10.0 million. Two of
these projects involved provision of Integrated Solution Services relating to digital urban
management across an entire district in a city, and one of these projects involved more complex
integration and installation services of hardware and software systems for a public hospital.
Movement in number of the Group ’sp r o j e c t s
The following table sets out the movement in number of the Group ’sp r o j e c t sd u r i n gt h e
Track Record Period and up to the Latest Practicable Date:
Year ended 31 December
From
1 January 2024 up
to the Latest
Practicable Date2021 2022 2023
No. of projects No. of projects No. of projects No. of projects
Telecommunications Infrastructure Services projects
– Infrastructure Construction Services projects
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ........ 7 4 8 0 1 1 4 8 7
Add: Number of new projects (Note 1) ......................... 6 4 7 7 8 8 3 0
Less: Number of completed projects (Note 2) ..................... ( 5 8 ) ( 4 3 ) ( 1 1 5 ) ( 1 4 )
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ............ 80 114 87 103
– Infrastructure Maintenance Services projects
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ........ 1 8 1 7 2 2 2 2
Add: Number of new projects (Note 1) ......................... 1 4 1 8 1 7 5
Less: Number of completed projects (Note 2) ..................... ( 1 5 ) ( 1 3 ) ( 1 7 ) ( 8 )
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ............ 17 22 22 19
Digitalisation Solution Services projects
– Integrated Solution Services projects
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ........ 2243
Add: Number of new projects (Note 1) ......................... 1 0 8 1 2 –
Less: Number of completed projects (Note 2) ..................... ( 1 0 ) ( 6 ) ( 1 3 ) ( 1 )
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ............ 2432
– System Maintenance Services projects
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d . ....... 1224
Add: Number of new projects (Note 1) ......................... 1 – 3 –
Less: Number of completed projects (Note 2) ..................... –– (1) –
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ............ 2244
– Software Solution Services projects
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ........ –– 6 –
Add: Number of new projects (Note 1) ......................... – 14 17 2
Less: Number of completed projects (Note 2) ..................... – (8) (23) –
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ............ – 6 – 2
Total ............................................ 101 148 116 130
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Notes:
1. For the purpose of calculating the movement in number of the Group ’s projects, a project is considered to be a
‘‘new project ’’ when the Group has entered into a framework agreement or task specific agreement with its
customer in respect of the project d uring the relevant year/period.
2. For the purpose of calculating the movement in number of the Group ’s projects, a project is considered to be a
‘‘completed project ’’when the framework agreement or task specific agreement has expired in accordance with the
contract term during the relevant year/period.
Major Projects
Based on the project status as at the Latest Practicable Date, the Group ’sp r o j e c t sa r e
categorised into (i) Complete d Projects, being projects where the agreement of which had
expired or been terminated, or where all the revenue from which had been fully recognised; (ii)
On-going Projects, being project(s) where t he agreement of which had not expired or been
terminated, and from which revenue had begun to be recognised, as at specified date; and (iii)
Pre-revenue Projects, being project(s) where the agreement of which had not expired or been
terminated, but from which no revenue had yet been derived.
Set forth below are details of the Group ’s Major Projects with a maximum or estimated
contract value of (i) RMB25.0 million or above i n the case of Infrastructure Construction
Services projects, or (ii) RMB3.0 million or above in the cases of Infrastructure Maintenance
Services projects, Integrated Solution Services projects, System Maintenance Services projects
and Software Solution Services projects, as specified in the relevant framework agreement or
task specific agreement. It is important to note that while the contract value stated in the
framework agreement of its T elecommunications Infrastructure Services projects represents the
maximum value of potential orders from custome rs, customers are not obligated to place work
orders up to the contract value. They have the discretion to reduce the work scope by not
placing additional work orders. As such, the contract value presented below has not taken into
account factors that could potentially lead to a reduction in work scope at the discretion of the
customers, which in turn reducing the final amount of revenue to be recognised.
Completed Projects
During the Track Record Period and up to the Latest Practicable Date, the Group had a
total of 345 Completed Projects, of which 230 were Infrastructure Construction Services
projects, 53 were Infrastructure Maintenance Services projects, 30 were Integrated Solution
Services projects, one was System Maintenance Services project and 31 were Software
Solution Services projects. Among these Com pleted Projects, 53 were Major Projects.
BUSINESS
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The following table sets out details of the Group ’s Completed Projects which are also Major
Projects during the Track Record Period and up to the Latest Practicable Date:
Revenue
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Contract value
(Note 1)
Before the Track
Record Period
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– Infrastructure Construction Services
 2020-2021 sporadic infrastructure civil engineering services
agreement (Note 2) .............................
Base station and
auxiliary facilities
engineering
services
November
2020
Customer A/
Zhejiang Province
27,644 3,615 9,454 47 1,066
 2019-2020 transmission pipeline engineering services (Jiangxi)
agreement
(Note 2) .............................
Integrated services
including cable
installation services
and access network
related services
July 2019 Customer A/Jiangxi
Province
323,641 92,289 93,090 19,943 12,328
 2020-2021 communication equipment installation services (Jiangxi)
agreement
(Note 2) .............................
Wireless network
equipment
installation services
March 2020 Customer A/
Jiangxi Province
161,047 39,780 12,589 3,448 3,934
 2019-2021 construction and relocation procurement agreement . . . Access network
related services
October
2020
Customer A/
Henan Province
48,672 27,496 14,964 494 –
 2019-2020 transmission pipeline engineering service agreement
( s e c t i o n2 - 1 0 ) ................................
Cable installation
services
April 2019 Customer A/
Guizhou Province
27,280 4,623 2,742 1,917 –
 2019-2020 transmission pipeline engineering service agreement
( s e c t i o n2 - 2 ) .................................
Cable installation
services
April 2019 Customer A/
Guizhou Province
40,388 11,286 6,567 3,252 554
 2019-2020 transmission pipeline engineering service agreement
( s e c t i o n2 - 8 . 3 ) ................................
Cable installation
services
April 2019 Customer A/
Guizhou Province
27,358 4,947 2,379 4,417 –
 2020-2022 engineering services agreement (Chongming)
(Note 2) . . Access network
related services
August
2020
Customer A/
Shanghai
31,192 1,441 8,730 4,817 3,781
 2020-2022 engineering services agreement (Jinshan) (Note 2) .... A c c e s sn e t w o r k
related services
August
2020
Customer A/
Shanghai
26,709 388 3,670 1,326 739
 2020-2022 engineering services agreement (Qingpu) (Note 2) ..... A c c e s sn e t w o r k
related services
August
2020
Customer A/
Shanghai
32,472 1,695 6,050 4,082 8,11 1
 2020-2021 procurement for room sub- integration construction
agreement (Note 2) .............................
Wireless network
equipment
installation
July 2020 Customer A/
Fujian Province
31,202 650 3,551 5,898 11,231
 2022-2023 construction project (section 1)
in Nanchang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cable installation
services
February
2022
Customer D/
Jiangxi Province
27,250 –– 6,689 18,286
 2020-2022 power grid and engineering services agreement in
T i a n j i n ....................................
Access network
related services
May 2020 Customer A/
Tianjin
43,951 1,838 8,367 3,631 3,803– Infrastructure Maintenance Services
 2018-2021 infrastructure maintenance
s e r v i c ea g r e e m e n t .............................
Maintenance September
2018
Customer C/
Jiangxi Province
28,000 18,658 6,365 1,260 –
 2018-2021 infrastructure maintenance
s e r v i c ea g r e e m e n t .............................
Maintenance September
2018
Customer C/
Jiangxi Province
34,150 18,819 5,167 1,041 –
 Professional maintenance contract . . . . . . . . . . . . . . . . . . . . Maintenance March 2020 Customer C/
Jiangxi Province
3,000 249 211 119 103
 2018-2021 comprehensive maintenance technical service framework
c o n t r a c t ...................................
Maintenance September
2018
Customer C/
Jiangxi Province
21,610 14,122 4,873 1,023 –
 2021-2022 framework agreement on sporadic housing maintenance
a n dd e c o r a t i o np r o j e c t s..........................
Maintenance January
2021
Customer A/
Gansu Province
6,435 505 –––
 2021 tower integrated construction project framework agreement . . Maintenance July 2021 Customer C/
Shaanxi Province
3,420 ––– 525
 2022-2023 network facility maintenance services northern banner
county framework agreement . . . . . . . . . . . . . . . . . . . . . . .
Maintenance August
2022
Customer D/
Inner Mongolia
Autonomous
Region
3,886 –– 3,501 –
BUSINESS
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--- page 217 ---
Revenue
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Contract value
(Note 1)
Before the Track
Record Period
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Digitalisation Solution Services
– Integrated Solution Services
 Hospital intelligent informatisation engineering project in Linchuan
D i s t r i c t....................................
Digital healthcare December
2021
Customer B/
Jiangxi Province
50,700 – 45,030 ––
 Public security surveillance project in Honggutan New District . . . Digital surveillance March 2021 Customer A/
Jiangxi Province
33,352 – 29,335 ––
 Safe campus construction project in Lichuan . . . . . . . . . . . . . . Digital education January
2021
Customer D/
Jiangxi Province
3,571 – 3,218 ––
 Hospital data informatisation service agreement in Ganzhou . . . . . Digital healthcare June 2021 Customer F/
Jiangxi Province
12,317 – 11,136 ––
 Digital city management project (phase 1 – surveillance system
i n t e g r a t i o ns e r v i c e )a g r e e m e n t ......................
Digital surveillance December
2020
Customer B/
Jiangxi Province
9,754 – 8,492 ––
 Digital hospital project in Ganzhou. . . . . . . . . . . . . . . . . . . . Digital healthcare January
2022
Customer F/
Jiangxi Province
4,900 –– 4,468 –
 Integrated system and software development project . . . . . . . . . Digital urban
management
December
2021
Customer D/
Jiangxi Province
5,500 – 5,189 ––
 Hospital intelligent informatisation engineering project in Linchuan
District (supplemental) (Note 3) ......................
Digital healthcare June 2023 Customer B/
Jiangxi Province
3,753 ––– 3,248
 Fengcheng City fluorine and thallium water quality automatic
monitoring station construction project (Note 3) .............
Digital government August
2023
Customer D/
Jiangxi Province
3,575 ––– 3,164
 Aerospace industrial park phase I project in Henan
Province (Note 3) ..............................
Digital
telecommunications
construction
December
2022
Customer D/
Henan Province
5,745 ––– 5,098
 Ganzhou municipal hospital medical group digital hospital project
s y s t e mi n t e g r a t i o ns e r v i c ep r o j e c t....................
Digital healthcare November
2022
Customer F/
Jiangxi Province
5,975 ––– 5,559
 Passenger transport centre project in Jishui County . . . . . . . . . Digital transport December
2022
Customer B/
Jiangxi Province
3,006 ––– 2,679
 Fengcheng City traffic police ’s time-limited capture project for
illegal parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Digital government September
2023
Customer A/
Jiangxi Province
6,486 ––– 5,881
 2023 supercomputer public service platform computing power
construction procurement project in Jiangxi Province . . . . . . . . .
Digital government September
2023
Customer H
(Note 4) /
Jiangxi Province
4,280 ––– 3,791
– System Maintenance Services
 2018 HD probe integration service agreement in Nanchang . . . . . System maintenance December
2018
Customer A/
Jiangxi Province
8,151 3,525 1,923 1,923 320
– Software Solution Services
 Industrial cloud platform agreement . . . . . . . . . . . . . . . . . . . Digital industrial
management
December
2022
Customer D/
Jiangxi Province
18,228 –– 16,437 –
 2022 industrial cloud platform agreement . . . . . . . . . . . . . . . . Digital industrial
management
September
2022
Customer B/
Jiangxi Province
11,760 –– 10,613 –
 Visual monitoring and management platform services . . . . . . . . . Digital
telecommunications
construction
December
2022
Customer D/
Jiangxi Province
8,650 –– 7,769 –
 Public opinion big data monitoring cloud platform custom
d e v e l o p m e n ts e r v i c e............................
Digital government September
2022
Customer A/
Jiangxi Province
6,540 –– 6,170 –
 Digital hospital outpatient management platform
(stage 1) system integration service procurement agreement . . . .
Digital healthcare October
2022
Customer D/
Jiangxi Province
6,068 –– 5,719 –
 Digital hospital inpatient management platform (stage 2) system
integration service procurement agreement . . . . . . . . . . . . . . .
Digital healthcare October
2022
Customer D/
Jiangxi Province
8,638 –– 8,149 –
 VR training platform procurement project . . . . . . . . . . . . . . . . Digital school April 2023 Customer D/
Jiangxi Province
8,910 ––– 7,885
BUSINESS
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--- page 218 ---
Revenue
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Contract value
(Note 1)
Before the Track
Record Period
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
 Digital education management system construction project . . . . . . Digital school March 2023 Customer D/
Jiangxi Province
4,917 ––– 4,351
 VR training platform construction project . . . . . . . . . . . . . . . . Digital school March 2023 Customer D/
Jiangxi Province
6,857 ––– 6,068
 Digital educational management platform procurement project . . . . Digital school April 2023 Customer D/
Jiangxi Province
5,310 ––– 5,009
 5G factory intelligent manufacturing training base project (Note 3) . . Digital school October
2023
Customer D/
Jiangxi Province
4,508 ––– 4,252
 Enterprise digital intelligent accounts management platform . . . . . Digital finance October
2023
Customer I/
Jiangxi Province
4,116 ––– 3,642
 Intelligent grain storage safety s upervision platform software sales
c o n t r a c t ...................................
Digital grain depot October
2023
Customer I/
Jiangxi Province
7,154 ––– 6,331
 P u b l i cs a f e t yv i d e os h a r i n gp l a t f o r m ................... D i g i t a lg o v e r n m e n t O c t o b e r
2023
Customer I/
Jiangxi Province
4,410 ––– 3,903
 Public safety video sharing platform software and hardware
p r o c u r e m e n ta g r e e m e n t ..........................
Digital government November
2023
Customer A/
Jiangxi Province
3,446 ––– 3,067
 Intelligent party affairs visualised management platform software
and hardware procurement agreement . . . . . . . . . . . . . . . . . .
Digital government November
2023
Customer A/
Jiangxi Province
3,742 ––– 3,334
 Enterprise digital intelligent accounts management platform software
and hardware procurement agreement . . . . . . . . . . . . . . . . . .
Digital finance November
2023
Customer A/
Jiangxi Province
3,940 ––– 3,509
Total 1,267,564 245,926 293,089 128,151 145,552
Notes:
1. The contract value refers to the maximum or estimated contract value (inclusive of VAT) as specified in the
framework agreement or task specific agreement.
2. Revenue has been recognised after the expiration of the framework agreement or task specific agreement as the
customer continued to place additional work order(s) w ith the Group, and the Group had carried out the required
works at the request of the customer.
3. Revenue has only been recognised from the project dur ing the period subsequent to the Track Record Period and
up to the Latest Practicable Date.
4. Customer H is a provincial institution responsible for the construction of infrastructure for science and technology
development in Jiangxi Province.
BUSINESS
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--- page 219 ---
During the Track Record Period and up to the Latest Practicable Date, nine of the Group ’s
Completed Projects which are also Major Projects (comprising six Infrastructure Construction
Services projects and three Infrastructure Mainte nance Services projects) recorded a significant
shortfall of approximately 50% or above between the contract value and the amount of revenue
recognised up to the Latest Practicable Date. The aggregate maximum contract value and
aggregate shortfall value for these nine Major Projects amounted to approximately RMB339.2
million and RMB220.1 million, respectively , among which, the corresponding aggregate
maximum contract value and aggregate shortfall value for the six Infrastructure Construction
Services projects amount ed to approximately RMB326 .3 million and RMB209.1 million,
respectively, while the corresponding aggregate maximum contract value and aggregate
shortfall value for the three Infrastructure Maintenance Services projects amounted to
approximately RMB12.9 million and RMB11.0 mill ion, respectively. Such shortfalls were
primarily attributable to the following reasons:
(i) The amount of work to be performed by the Group is specified in individual work
orders placed by its customers under the framework agreements. The amount of
contract value specified in framework agreements typically refers to a maximum or
estimated amount. As advised by the PR C Legal Advisers, customers are not
obligated to place work orders to meet the maximum or estimated contract value
according to the terms of the framework agreement for the Infrastructure Construction
Services projects. Therefore, customers have the flexibility to determine the work
scope based on their own requirements and may choose not to place additional work
orders, thus potentially reducing the overall work scope. As such, the contract value is
not a direct indication of the total amount of revenue which would be recognised
under the project. As advised by Ipsos, this arrangement is in line with the industry
norm within the telecommunications infrastructure industry in the PRC. It involved nine
Major Projects with an overall conversion rate of approximately 35.1% calculated by
dividing the total revenue (VAT inclusive) recognised up to the Latest Practicable Date
by the aggregate maximum contract value under the relevant contracts;
(ii) Some of the Group ’s customers had placed fewer work orders with the Group,
postponed the completion schedule of the construction works during the prevalence of
the COVID-19 pandemic. It involved two Major Projects with an overall conversion
rate of approximately 41.9% calculated by dividing the total revenue (VAT inclusive)
recognised up to the Latest Practicable Date by the aggregate maximum contract
value under the relevant contracts;
(iii) During the performance of the projects, some of the Group ’s customers entered into
discussions with the local government to re-negotiate on certain details with respect to
the implementation plan of the construction works. As such, part of the works were
put on hold pending the latest instructions from the customers. It involved three Major
Projects with an overall conversion rate of approximately 43.7% calculated by dividing
the total revenue (VAT inclusive) recognised up to the Latest Practicable Date by the
aggregate maximum contract value under the relevant contracts; and
BUSINESS
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--- page 220 ---
(iv) Some projects experienced modifications in the implementation plan of the project
with reduced or no work orders being placed with the Group, which, to the best
knowledge and belief of the Directors, was caused by the change in the customers ’
business planning. It involved two Major Projects with an overall conversion rate of
approximately 10.6% calculated by divi ding the total revenue (VAT inclusive)
recognised up to the Latest Practicable Date by the maximum contract value under
the relevant contract.
For further details relating to th e risks associated with the Group ’s project backlog not
being indicative of the Group ’s future earnings and operation results, please refer to the section
headed ‘‘Risk Factors ’’in this prospectus.
On-going Projects
As at the Latest Practicable Date, the Group had 78 On-going Projects of which 63 were
Infrastructure Construction Services projects , 11 were Infrastructure Maintenance Services
projects, one were Integrated Solution Services projects, three was System Maintenance
Services project and nil was Software Solution Services projects. Among these On-going
Projects, 20 were Major Projects.
The following table sets out details of the Group ’s On-going Projects which are also Major
Projects as at the Latest Practicable Date:
Revenue
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Commencement date
(Note 1)
Expected completion
date (Note 2)
Contract value
(Note 3)
Before the Track
Record Period
Year ended 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– Infrastructure Construction Services
 2022-2023 communication construction main contractor
p r o j e c t .........................
Wireless network equipment
installation services
September 2022 Customer D/
Inner Mongolia
Autonomous Region
1 September 2022 31 August
2024
41,011 –– 10,990 26,538
 2022-2024 engineering service agreement
( s e c t i o n4 ).......................
Integrated services including
wireless network equipment
installation services and
cable installation services
July 2022 Customer D/
Shanghai
1J u l y
2022
30 June
2024
32,646 –– 2,380 6,639
 2022 equipment and cable engineering construction
a g r e e m e n t ........................
Integrated services including
cable installation services
and wireless network
equipment installation
services
July 2022 Customer D/
Fujian Province
20 July
2022
19 July
2024
41,823 –– 4,838 19,904
 2022-2023 telecommunications communication
engineering construction services agreement in
Z h e j i a n gP r o v i n c e ....................
Cable installation services April 2022 Customer A/
Zhejiang Province
12 April
2022
31 December
2023
77,254 –– 2,678 6,693
 2022-2023 telecommunications construction agreement
i nJ i a n g x iP r o v i n c e ...................
Cable installation services March 2022 Customer A/
Jiangxi Province
25 March
2022
31 December 2024
(Note 5)
219,192 –– 5,390 49,013
 2022-2023 telecommunications construction agreement
(section 5-4) in Yunnan Province ...........
Cable installation services April 2022 Customer A/
Yunnan Province
19 April
2022
31 December 2024
(Note 5)
85,059 –– 4,541 13,314
 2022-2023 telecommunications construction agreement
(section 8-6) in Yunnan Province ...........
Cable installation services April 2022 Customer A/
Yunnan Province
15 April
2022
31 December 2024
(Note 5)
33,379 –– 4,732 –
 2022-2023 telecommunications construction agreement
(section 2) in Guangxi Zhuang Autonomous Region . .
Wireless network equipment
installation services
March 2022 Customer A/
Guangxi Zhuang
Autonomous Region
25 March
2022
31 December 2024
(Note 5)
66,660 –– 9,880 21,397
 2021-2023 transmission agreement (section 3) ..... C a b l ei n s t a l l a t i o nS e r v i c e s J u n e 2021 Customer A/
Yunnan Province
19 June 2021 18 June 2023
(Note 5)
28,667 – 3,820 9,603 6,695
 2021-2023 transmission agreement (section 5) ..... C a b l ei n s t a l l a t i o nS e r v i c e s J u n e 2021 Customer A/
Yunnan Province
19 June 2021 18 June 2023
(Note 5)
25,242 – 1,407 13,694 6,898
 2022-2024 tower body integrated construction services
c e n t r a l i s e db i d d i n gp r o j e c tf r a m e w o r ka g r e e m e n t ....
Integration services including
construction, transformation,
maintenance and upgrade of
towers
August 2022 Customer C/
Shaanxi Province
9 September 2022 8 September 2024 29,678 ––– 15,391
BUSINESS
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--- page 221 ---
Revenue
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Commencement date
(Note 1)
Expected completion
date (Note 2)
Contract value
(Note 3)
Before the Track
Record Period
Year ended 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
 2023-2024 base station tower, civil engineering, and
power integrated services
project (Note 4) .....................
Integration services including
construction, transformation,
maintenance and upgrade of
towers
February 2023 Customer A/
Yunnan Province
22 February
2023
31 December 2024 29,734 ––– 2,541
 2023-2024 centralised procurement project for wired
broadband (including maintenance and construction)
and dedicated line construction services (Bid package
7: Ganzhou) (Note 4) ..................
Access network related services June 2023 Customer A/
Jiangxi Province
29 June 2023 28 June 2025 77,599 ––– 36,764
– Infrastructure Maintenance Services
 2022-2025 comprehensive maintenance project
f r a m e w o r ka g r e e m e n t ..................
Maintenance April 2022 Customer C/
Jiangxi Province
1 April 2022 31 March 2025 22,963 –– 4,531 6,812
 2022-2025 comprehensive maintenance project
f r a m e w o r ka g r e e m e n t ..................
Maintenance April 2022 Customer C/
Jiangxi Province
1 April 2022 31 March 2025 23,773 –– 4,702 7,668
 2022-2025 comprehensive maintenance project
f r a m e w o r ka g r e e m e n ti nG a n z h o u ...........
Maintenance April 2022 Customer C/
Jiangxi Province
1 April 2022 31 March 2025 17,878 –– 3,804 6,117
 2022-2025 comprehensive maintenance project
framework agreement in Nanchang ...........
Maintenance April 2022 Customer C/
Jiangxi Province
1 April 2022 31 March 2025 21,313 –– 2,885 4,875
 2022-2024 maintenance, update and renovation
construction service project (bid section 1) engineering
construction services framework
agreement
(Note 4) ...................
Maintenance June 2022 Customer C/
Jiangxi Province
2 June 2022 31 May 2024 6,377 ––– 1,421
 2022 integrated center maintenance project agreement Maintenance April 2022 Customer C/
Jiangxi Province
8 April 2022 7 April 2023
(Note 5)
3,038 –– 659 1,655
Digitalisation Solution Services
– Integrated Solution Services
 Intelligent central control system project for a science
and the technology museum in Jiangxi Province . . .
Digital building management April 2021 Customer G/
Jiangxi Province
21 April 2021 30 June 2024 5,504 ––– 4,178
– System Maintenance Services
 Nil
– Software Solution Services
 Nil
Total: 888,789 – 5,227 85,307 244,513
Notes:
1. The commencement date refers to the date of commence ment as specified in the fr amework agreement or task
specific agreement in respect of the project.
2. The expected completion date refers to the date of completion as specified in the framework agreement or task
specific agreement in respect of the project.
3. The contract value refers to the maximum or estimated contract value (inclusive of VAT) as specified in the
framework agreement or task specific agreement.
4. Revenue has only been recognised from the project dur ing the period subsequent to the Track Record Period and
up to the Latest Practicable Date.
5. As specified in the framework agr eement, the term of the agreement shall be automatically extended if there
remains unutilised contract value as at the completion date, which shall become (i) the date when the customer
has released the results of its latest centralised procur ement exercise for the same type of works, or (ii) when the
aggregate amount of revenue recognised under the proje ct has reached the maximum or estimated contract value,
whichever is earlier.
BUSINESS
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--- page 222 ---
Pre-revenue Projects
Pre-revenue Projects comprise those projects for which work orders have not yet been
received from customers or projects where work orders have been received, but from which no
revenue had yet been derived up to the Latest Practicable Date. As at the Latest Practicable
Date, the Group had 52 Pre-revenue Projects. Among these Pre-revenue Projects, 40 were
Infrastructure Construction Serv ices projects, eight were Infrastructure Maintenance Services
projects, one were Integrated Solution Services projects, one was System Maintenance Services
project and two were Software Solution Services projects. Among these Pre-revenue Projects,
three were Major Projects.
The following table sets out details of the Group ’s Pre-revenue Projects which are also its
Major Projects as at the Latest Practicable Date:
Contract name Principal nature
Date of
agreement
Customer/
Location of project
Commencement
date (Note 1)
Expected
completion
date (Note 2)
Contract
value (Note 3)
RMB ’000
Telecommunications Infrastructure Services
– Infrastructure Construction Services
 Nil
– Infrastructure Maintenance Services
 2023-2024 base station, room branch and
important computer room adjustment and
remediation service procurement agreement . . .
Maintenance January 2023 Customer A/
Hebei Province
31 January 2023
(Note 4)
31 December
2024
3,612
Digitalisation Solution Services
– Integrated Solution Services
 Nil
– System Maintenance Services
 Nil
– Software Solution Services
 Public video security software and enterprise
finance software platforms services procurement
c o n t r a c t .........................
Digital government and
digital finance
January 2024 Customer J
(Note 5) /
Jiangxi Province
January 2024
(Note 6)
April 2024 7,238
 Enterprise digital intelligent accounts
management platform integration services
p r o c u r e m e n tc o n t r a c t .................
Digital finance February 2024 Customer D/
Jiangxi Province
22 February 2024
(Note 6)
21 June 2024 3,142
Total 13,992
Notes:
1. The commencement date refers to the date of commence ment as specified in the fr amework agreement or task
specific agreement in respect of the project.
2. The expected completion date refers to the date of completion as specified in the framework agreement or task
specific agreement in respect of the project.
3. The contract value refers to the maximum or estimated contract value (inclusive of VAT) as specified in the
framework agreement or task specific agreement.
4. The Group has yet to receive any work orders from Cust omer A under this project as at the Latest Practicable
Date. Based on the best estimation of the Directors, it is expected that Customer A will issue work orders to the
Group during the second half of 2024.
5. Customer J is a state-owned enterprise based in Jiangxi Province which principally engages in, among others,
provision of Internet data, Internet security and big da ta services, and research and development of IOT and AI
applied software systems.
6. The implementation works for this project have been completed, while the completed works are undergoing
inspection and acceptance procedures by Customer A. Thus, no revenue has been recognised by the Group as at
the Latest Practicable Date, pending completion of such procedures.
BUSINESS
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--- page 223 ---
Project backlog
The Group ’s project backlog represents its estimate of the total outstanding contract value
of its On-going Projects and Pre-revenue Projects (assuming that all works under the relevant
contracts are required to be carried out) as at 31 December 2021, 2022 and 2023 and the Latest
Practicable Date. It is important to note that while the contract value stated in the framework
agreement of its T elecommunications Infrastructure Services projects represents the maximum
value of potential orders from customers, customers are not obligated to place work orders up to
the contract value. They have the discretion to reduce the work scope by not placing additional
work orders. As such, the contract value used in calculating the Group ’s project backlog has not
taken into account factors that could potentially lead to a reduction in work scope at the
discretion of the customers, which in turn reducing the final amount of revenue to be recognised.
For the years ended 31 December 2021, 2022 and 2023, the conversion rate of contract value
into actualised work orders for the Completed Projects for T elecommunications Infrastructure
Services was approximately 66 .2%, 68.2% and 72.2%, respecti vely. The conversion rate for a
specified year represents the proportion of aggregate contract sum of the Completed Projects
for the corresponding years that has been subsequently converted into actualised work orders,
i.e. the total revenue (VAT inclusive) recognised, as at the Latest Practicable Date. The
relatively lower conversion rate for the year ended 31 December 2021 was mainly due to a
Major Project for Infrastructure Constructio n Services in Jiangxi Province with a maximum
contract value of approximately RMB161.0 mill ion, of which the customer had placed fewer work
orders due to a change in its business planning. The relatively lower conversion rate for the year
ended 31 December 2022 was mainly due to a Major Project for Infrastructure Construction
Services in Shanghai with a max imum contract value of approximately RMB26.7 million, which
involved modification in the imp lementation plan by the customer leading to fewer work orders
being placed. The conversion rate for the year ended 31 December 2023 was relatively higher
due to increase in work orders placed by the Group ’s customers as well as acceleration in
progress for the Infrastructure Construction Services projects in 2023, following the lifting of
restrictions imposed by the COVID-19 pandemic. Such combined effect led to the increase in
revenue recognition and facilitated the revenue growth of the Group for the year ended 31
December 2023. On the other hand, the conversion rate of contract value into actualised work
orders for the Completed Projects for Digitalisation Solution Services remained relatively stable
at approximately 100.0%, 100.0% and 98.5% during the corresponding years.
BUSINESS
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--- page 224 ---
The following table sets out details regarding the movement in the Group ’sp r o j e c tb a c k l o g
by business segments during the Track Record Period and up to the Latest Practicable Date:
Year ended 31 December
From
1 January 2024
up to the Latest
Practicable Date2021 2022 2023
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– Infrastructure Construction Services
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ............. 8 6 4 , 8 5 9 5 3 7 , 2 4 0 1 , 0 1 4 , 3 3 0 8 1 1 , 0 0 9
Add: Contract value of newly awarded projects (Note 1) ................... 3 5 9 , 5 7 5 8 9 0 , 1 9 5 3 8 7 , 1 8 6 1 1 3 , 0 7 0
Less: Revenue (VAT inclusive) recognised during the relevant year/period (Note 2) . . . (375,673) (336,762) (505,094) (152,647)
Less: Remaining contract value of projects completed during the relevant
year/period (Note 3) ....................................... ( 3 5 5 , 8 1 4 ) ( 1 6 6 , 2 8 1 ) ( 1 5 7 , 3 9 7 ) ( 4 6 , 9 0 0 )
Add: Adjustment for additional works for projects completed (Note 4) ........... 4 4 , 2 9 4 8 9 , 9 3 8 7 1 , 9 8 4 3 8 , 3 8 4
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ................. 537,240 1,014,330 811,009 762,916
– Infrastructure Maintenance Services
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ............. 4 7 , 3 1 6 3 6 , 6 8 5 9 7 , 5 4 7 6 0 , 4 5 2
Add: Contract value of newly awarded projects (Note 1) ................... 2 0 , 1 7 5 1 1 1 , 8 9 4 1 5 , 7 0 8 1 , 7 9 0
Less: Revenue (VAT inclusive) recognised during the relevant year/period (Note 2) . . . (26,998) (35,753) (41,128) (19,120)
Less: Remaining contract value of projects completed during the relevant
year/period (Note 3) ....................................... ( 7 , 5 0 7 ) ( 1 7 , 5 9 7 ) ( 1 4 , 2 0 0 ) ( 3 , 7 8 3 )
Add: Adjustment for additional works for projects completed (Note 4) ........... 3 , 7 0 0 2 , 3 1 8 2 , 5 2 5 2 , 0 5 6
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ................. 36,685 97,547 60,452 41,395
Digitalisation Solution Services
– Integrated Solution Services
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ............. 1 1 , 8 2 7 7 , 4 9 7 1 6 , 5 9 5 3 , 4 8 5
A d d :C o n t r a c tv a l u eo fn e w l ys e c u r e dp r o j e c t s ........................ 1 1 6 , 2 8 9 2 0 , 3 1 2 3 2 , 5 3 9 –
Less: Revenue (VAT inclusive) recognised during the relevant year/period (Note 2) . . . (120,619) (11,214) (45,536) (307)
Less: Remaining contract value of projects completed during the relevant
year/period (Note 3) ....................................... –– (113) –
Add: Adjustment for additional works for projects completed (Note 4) ........... N / A N / A N / A N / A
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ................. 7,497 16,595 3,485 3,178
– System Maintenance Services
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ............. 4 , 4 1 5 2 , 9 7 8 8 1 1 1 , 7 2 1
A d d :C o n t r a c tv a l u eo fn e w l ys e c u r e dp r o j e c t s ........................ 6 4 3 – 1,405 –
Less: Revenue (VAT inclusive) recognised during the relevant year/period (Note 2) . . . (2,081) (2,166) (495) (222)
Less: Remaining contract value of projects completed during the relevant
year/period (Note 3) ....................................... ––––
Add: Adjustment for additional works for projects completed (Note 4) ........... N / A N / A N / A 1 9
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ................. 2,978 811 1,721 1,518
– Software Solution Services
O p e n i n gb a l a n c ea sa tt h eb e g i n n i n go ft h er e l e v a n ty e a r / p e r i o d ............. –– 6,342 –
A d d :C o n t r a c tv a l u eo fn e w l ys e c u r e dp r o j e c t s ........................ – 70,163 69,064 10,380
Less: Revenue (VAT inclusive) recognised during the relevant year/period (Note 2) ... – (63,815) (73,579) –
Less: Remaining contract value of projects completed during the relevant
year/period (Note 3) ....................................... – (6) (1,827) –
Add: Adjustment for additional works for projects completed (Note 4) ........... N / A N / A N / A N / A
E n d i n gb a l a n c ea sa tt h ee n do ft h er e l e v a n ty e a r / p e r i o d ................. – 6,342 – 10,380
Total ending balance of backlog ................................ 584,400 1,135,625 876,667 819,387
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Notes:
1. For certain T elecommunications Infrastructure Servic es projects of the Group during the Track Record Period, the
contract value was not specified in the relevant agreements, and thus the contract values of such projects would
be determined based on the actual quantity of works c arried out by the Group pursuant to the relevant work
order(s) placed by the customer during the relevant year/period.
2. As the contract value according to the agreement is inclusive of VAT , for the purpose of calculating the project
backlog, the revenue recognised during the relevant year/period also includes VAT .
3. A project is considered to be completed when the framew ork agreement or task specific agreement has expired in
accordance with the contract term.
4. Adjustment refers to the value of the additional works carried out by the Group after a project had completed
during the preceding years.
The Group operates on a project-by-project b asis with new projects being obtained through
open tender, single-source procurement or responding to invitation to quote. Generally, the
framework agreement or task specific agreement for the Group ’s T elecommunications
Infrastructure Services projects would stipula te a maximum or estimated contract value for the
particular project, and the actual amount of revenue to be recognised would be determined
based on progress of the work. As such, the value of its project backlog is dependent on a
number of factors, including (i) the Group ’s ability to successfully capture new projects; (ii) the
contract size of each new project awarded/secu red; (iii) the amount of works carried out and the
corresponding contract value recognised as revenue; and (iv) the remaining contract value of
any completed project, during the relevant year. The closing balance of the Group ’s backlog
during the Track Record Period amounted to approximately RMB584.4 million, RMB1,135.6
million and RMB876.7 million, respectively, and the Group ’s Infrastructure Construction Services
business sub-segment was its main contributor.
During the Track Record Period, the value of the newly secured projects from the Group ’s
Infrastructure Construction Se rvices business sub-segment am ounted to approximately RMB359.6
million, RMB890.2 million and RMB3 51.6 million, respectively. The fluctuations in the value of the
Group’s newly awarded projects in respect of its Infras tructure Construction Services business sub-
segment is largely attributable to the business cycle of its largest customer in each year during the
Track Record Period, Customer A. Customer A generally makes available for tender key projects
on a bi-annual basis leading to relatively low contract value of newly secured projects during both
2021 and 2023. Subsequent to the Track Record Period and up to the Latest Practicable Date, the
Group had been awarded 35 T elecommunications Infrastructure Serv ices projects with an
aggregate maximum or estimated contract value of approximately RMB114.9 million, 30 of which
were Infrastructure Construction Services pr ojects with an aggregate maximum or estimated
contract value of approximately RMB113.1 million.
The closing balance of the Group ’s backlog in respect of its Digi talisation Solution Services
projects was generally low, since the contract value of its projects are relatively low and its
project life cycle was comparatively short with p roject implementation period of approximately
o n et o1 2m o n t h s .
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T o address any potential funding needs arising from the project backlog, the Group plans to
utilise its operating cash inflow and its unut ilised banking facilities which amounted to
approximately RMB357.7 million as at 30 April 2024 to ensure sufficient liquidity. In addition, the
Group intends to utilise a portion of the net procee ds from the Listing towards upfront costs and
working capital. For details, please refer to the paragraph headed ‘‘Business strategies –
Enhancing the Group ’s liquidity position and financial capa bilities in securing new large-scale
Digitalisation Solution Services projects ’’in this section.
Ageing analysis of project backlog
The following table sets out the ageing analysis of the Group ’s balance of project backlog
by business segments as at 31 December 2023 and its subsequent realisation up to the Latest
Practicable Date:
Within 1 year
More than 1
year but
within 2 years
More than 2
years but
within 3 years
More than
3 years Sub-total
Subsequent
realisation up
to the Latest
Practicable
Date (Note)
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 (%)
Telecommunications Infrastructure Services
– Infrastructure Cons truction Services ........ 2 7 8 , 3 3 4 4 9 9 , 4 6 4 3 3 , 2 1 1 – 811,009 103,081 (12.7%)
– Infrastructure Maintenance Services ........ 1 0 , 9 0 9 4 9 , 5 4 3 –– 60,452 17,065 (28.2%)
Digitalisation So lution Services
– Integrated Solution Services ............ 2 , 1 0 2 3 0 7 1 , 0 7 6 – 3,485 307 (8.8%)
– System Maintenance Services ........... 1 , 3 7 8 – 343 – 1,721 203 (11.8%)
– Software Solution Services ............. ––––– – (0.0%)
Total ............................ 292,723 549,314 34,630 – 876,667 120,656 (13.8%)
Note: The amount of revenue (VAT inclusive) recognised subsequent to the Track Record Period up to the Latest
Practicable Date divided by the balance of the project backlog as at 31 December 2023. As the project backlog is
estimated based on the contract value which is inclusive of VAT , for the purpose of calculating the subsequent
realisation, the revenue recognised also includes VAT .
As at the Latest Practicable Date, approximately RMB120.7 million, representing
approximately 13.8% of the Group ’s total project backlog as at 31 December 2023, has been
subsequently realised.
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Tender success rate
Telecommunications Infr astructure Services
During the Track Record Period, the Group ’s T elecommunications Infrastructure Services
projects were generally awarded by way of open tender whereby any eligible service provider
could submit a tender to provide the services required by the customer. For the years ended 31
December 2021, 2022 and 2023, the Group had submitted 344, 291 and 256 tenders for
Infrastructure Construction Services projects and had achieved a tender success rate of
approximately 18.9%, 20.6% and 19.9% during the corresponding years, respectively, and the
Group had submitted 25, 33 and 17 tenders for Infrastructure Maintenance Services projects
and had achieved a tender success rate of approximately 44.0%, 39.4% and 41.2% during the
corresponding years, respectively. The Group ’s tender success rate during the Track Record
Period for both of these business segments were in line with the industry range in the PRC,
which as advised by Ipsos, varied from approximately 15.0% to 35.0% in respect of
infrastructure constr uction services and from approximately 30.0% to 45.0% in respect of
infrastructure maintenance services. The following table sets out details regarding the Group ’s
tender success rate for T elecommunications Infra structure Services projects during the Track
Record Period:
Year ended 31 December
2021 2022 2023
Telecommunications Infrastructure Services
– Infrastructure Construction Services
Number of tenders submitted . .......................... 3 4 4 2 9 1 2 5 6
Number of tenders awarded . . .......................... 6 5 6 0 5 1
T ender success rate (Note) .............................. 1 8 . 9 % 2 0 . 6 % 1 9 . 9 %
– Infrastructure Maintenance Services
Number of tenders submitted . .......................... 2 5 3 3 1 7
Number of tenders awarded . . .......................... 1 1 1 3 7
T ender success rate (Note) .............................. 4 4 . 0 % 3 9 . 4 % 4 1 . 2 %
T otal number of tenders submitted . . . . . . . . ................ 3 6 9 3 2 4 2 7 3
T otal number of tenders awarded . . . . . . . . . ................ 7 6 7 3 5 8
Overall tender success rate (Note) ......................... 2 0 . 6 % 2 2 . 5 % 2 1 . 3 %
Note: The tender success rate for a particular year is calcu lated based on the number of tenders awarded to the Group
(whether awarded in the same year or subsequently) div ided by the number of tenders submitted during that year.
BUSINESS
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The Group ’s overall tender success rate slightly in creased from approximately 20.6% for
the year ended 31 December 2021 to approximately 22.5% for the year ended 31 December
2022, and further decreased to approximately 21.3% for the year ended 31 December 2023. It
was mainly due to the Group ’s efforts devoted to developing markets outside of Jiangxi
Province. Sensing the market potential and business opportunities outside of Jiangxi Province,
the Group has taken a more aggressive strategy and amongst the tenders submitted for the
years ended 31 December 2021, 2022 and 2023, 51, 62 and 38 tenders were for projects
located in Jiangxi Province while 318, 259 and 235 tenders were for projects located outside of
Jiangxi Province. The Group has faced significant competition in markets outside of Jiangxi
Province due to its relatively limited reputation and track record beyond the province. The
challenges arise from its lesser-known presence and limited established connections, which
have made it difficult to secure projects and establish a strong foothold in those markets.
Expanding beyond Jiangxi Province have proven to be a comparatively challenging task for the
Group, resulting in a relatively low overall tender success rate for the years ended 31 December
2021, 2022 and 2023. The Group ’s tender success rate for those projects located outside of
Jiangxi Province during the Track Record Perio d was approximately 18.9%, 16.6% and 18.3%,
respectively.
Digitalisation Solution Services
During the Track Record Period, due to the Group ’s track record in provid ing Digitalisation
Solution Services and its prior relationship wit h the customers, the Digitalisation Solution
Services projects were generally secured by way of single-source procurement or responding to
invitations to quote, whereby the customers would approach the Group to directly seek terms
and obtain quote, and may negotiate for mutually agreed contract terms. During each of the
years during the Track Record Period, the Group had secured 11, 22 and 32 Digitalisation
Solution Services projects, respectively.
CUSTOMERS
The Group ’s customers in T elecommunications Infrastructure Services business segment
during the Track Record Period primarily compr ised key players in the PRC telecommunications
industry such as telecommunications network operators and telecommunications tower
infrastructure service provider who would c ontract telecommunications infrastructure
construction and maintenance works to the Group. As for the Group ’s Digitalisation Solution
Services business segment, its customers mainly included not only telecommunications network
operators but also local governments, quasi-government institutions, state-owned enterprises
and private companies in the PRC who would engage the Group to provide Integrated Solution
Services, System Maintenance Services and/or Software Solution Services for use in
digitalisation related projects which cover various sectors such as digital healthcare, digital
education, digital surveillance, digital gover nment, digital industrial management and digital
urban management, etc.
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Salient terms of the agreements entered into with the Group ’sc u s t o m e r s
Telecommunications Infr astructure Services
For T elecommunications Infrastructure Services, there is typically no long-term agreements
entered into between the Group and its customers, and instead, during the Track Record Period,
where a potential customer agrees to engage the Group for the provision of Infrastructure
Construction Services and/or Infrastructure Maintenance Services, the Group would typically
enter into a legally binding framework agreement on a project-by-project basis with that
customer which would set out the basic terms of engagement under the relevant project.
However, the actual works to be carried out by the Group would be set out in the specific work
orders placed by the customer which would generally contain terms relating to specific type,
scope and quantity of works required, contract value and target completion date.
Set out below are the salient terms of a typical framework agreement entered into between
the Group and its customers in respect of its Infrastructure Construction Services projects and
its Infrastructure Maintenance Services projects during the Track Record Period:
Infrastructure Construction Services
Type and scope of
w o r k s : ..........
The scope of works would be broadly set out in the framework
agreement and would either incorporate the applicable technical and
equipment specifications and quality requirements as set out in the
tender documents or it would specifically list those specifications and
requirements.
T e r m : ............ T h e f r a m e w o r k a g r e e m e n t t y p i c a l l y l a s t s f o r o n e t o t w o y e a r s
depending on the scope, scale and complexity of the project.
Contract value and
r a t e s :...........
The framework agreement typically sets out the maximum contract
value or estimated contract value. However, the aggregate contract
value or work orders or task specific agreement placed by the
customer and may not necessary be equal to the maximum or
estimate contract value.
Payment and credit
t e r m s : ..........
In certain circumstances, the customer may be required to make an
advance payment to the Group upon the placing of the individual work
orders or signing of the task specific agreement, which typically
amounts to 5% to 30% of the value of the work orders or task specific
agreement. In some circumstances, the customer would pay up to a
certain pre-agreed percentage of the value of the work certified by the
customer or its agents as progress payment.
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The Group typically grants its customers credit periods of up to 30
days pursuant to the agreement. However, as confirmed by the
Directors, having considered the business relationships with the
customers as well as their established background, the Group
generally agrees to extend the credit period to up to 90 days, in view
of the timeframe required for the customers to complete their internal
procedures for processing the payments.
Payments are typically made by way of bank transfers.
Retention money: . . . . The customer may withhold a certain percentage of the final settlement
amount as retention money. Typically, the retention money amounts to
3% to 10% of the final settlement amount. Retention money may also
be withheld from each interim payment or all at once from the final
payment to be settled pursuant to the final accounts. The retention
money would usually be released upon the expiry of the defect liability
period.
Defect liability
p e r i o d :..........
The customer may require a defect liability period during which the
Group is responsible for rectifying all defects that are due to its non-
conformance with the relevant specifications. The defect liability period
typically ranges from 12 to 24 months.
Liquidated damages: . If the project is delayed due to reasons caused by the Group, the
Group would be liable to pay liquidated damages. However, if the
delay is due to force majeure or caused by the customer, such as due
to variation of works or delay in provision of required conditions for
carrying out the construction works, the Group would normally be
entitled to an extension of time.
Performance bond: . . . In order to secure due and timely performance of the Group, the
customer may request the Group to obtain a performance bond issued
by a bank in favour of the customer, pursuant to which the bank
agrees to pay a sum of money to the customer if the Group fails to
perform its obligations under the framework agreement or the work
order. Generally, the amount of performance bond required does not
exceed 10% of the contract value.
T ermination: . . . . . . . . Typically, the framework agreement may be terminated by mutual
agreement or as a result of a breach of the framework agreement by
the defaulting party, in which case the non-defaulting party may
terminate the framework agreement.
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Infrastructure Main tenance Services
Type and scope
o fw o r k s : ........
The scope of works would be broadly set out in the framework
agreement and would either incorporate the applicable technical and
equipment specifications and quality requirements as set out in the
tender documents.
T e r m : ............ T h ef r a m e w o r ka g r e e m e n tt y p i c a l l yl a s t sf o ro n et ot h r e ey e a r s .
Contract value and
r a t e s :...........
The framework agreement typically sets out the estimated contract
value. However, the actual contract value would be determined based
on the actual quantity of works placed by the customer
Payment and credit
t e r m s : ..........
The Group is typically entitled to mo nthly payment for the provision of
(i) routine infrastructure mainte nance services, where the fee would
generally be calculated using a formula that takes into account the
basic fee, the pre-determined rates for additional services and the
performance rating of the Group during the relevant month; and (ii)
emergency trouble shooting and other add-on services, where the fee
is generally calculated based on the actual quantity of services
provided in the relevant month.
The Group typically grants its customers credit periods of up to 30
days pursuant to the agreement. However, as confirmed by the
Directors, having considered the business relationships with the
customers as well as their established background, the Group
generally agrees to extend the credit period to up to 90 days, in view
of the timeframe required for the customers to complete their internal
procedures for processing the payments.
Payments are typically made by way of bank transfers.
Workers
r e q u i r e m e n t : ......
The framework agreement may specify or incorporate the requirement
in the tender documents with regards to the minimum number of
workers required.
Liquidated damages: . If the project is delayed due to reason caused by the Group, the Group
would be liable to pay liquidated damages. However, if the delay is
caused by the customer, such as due to variation of works or delay in
provision of materials, the Group would normally be entitled to an
extension of time.
T ermination: . . . . . . . . Typically, the framework agreement may be terminated by mutual
agreement or as a result of a breach of the framework agreement by
the defaulting party, in which case the non-defaulting party may
terminate the framework agreement.
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In other circumstances, the Group would directly enter into a legally binding agreement
with the customer that is specific to the task at hand. The terms of task specific formal
agreement are generally similar to those under the framework agreement or work orders of
T elecommunications Infrastructure Services.
Digitalisation Solution Services
For Digitalisation Solution Services, there is typically no long-term agreements entered into
between the Group and its customers, and instead, the Group and its customers would typically
enter into a task specific agreement directly for provision of Integrated Solution Services and
Software Solution Services on a project-by-project basis. Set out below are the salient terms of
a typical agreement entered into between the Group and its customers in respect of such
projects:
Type and scope
o fw o r k s : ........
The scope of works and the specifications of the hardware and/or
software required by the customer would be broadly set out in the
agreement.
T e r m : ............ D e p e n d i n go nt h ec o m p l e x i t yo ft h ep r o j e c t s ,t h ep r o j e c ti m p l e m e n t a t i o n
period for the Integrated Solution Services projects could generally last
for approximately one to 12 months, while the project implementation
period for the Software Solution Services projects generally lasted for
approximately one to three months.
Contract value and
r a t e s :...........
The agreement typically sets out the contract value and the unit rates
for the hardware and/or software.
Payment and credit
t e r m s : ..........
The agreement may include provisions for progress payments at various
stages of the project. For certain projects, the Group may be entitled to
receive an advance payment (typic ally 30% or 50% of total contract
value) as part payment upon signing of the agreement. However, for
projects without an advance payment, the Group is typically entitled to
initial payment only after the customer or its agent has completed the
inspection and acceptance of the proj ect. The remaining balance is then
payable in stages over specific periods of time (e.g. quarterly or every
six or 12 months) following project com pletion. The entire payment cycle
for the Group ’s Digitalisation Solution Services projects, which
comprises payment in stages, typically spans three to five years.
BUSINESS
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As advised by Ipsos, this payment structure aligns with the industry
norm for customers of digitalisation solution services, particularly the
dominate players being the Big Three with significant bargaining power
in negotiation of contract terms. These customers generally prefer
credit terms that involve staggered payments throughout different
stages of the project, including the commissioning stage, completion
stage and post-completion stage, for flexibility and liquidity reasons. In
addition, this prolonged payment period is consistent with the industry
practice which allows the customers to ensure that the service
providers for digitalisation solution services continue to deliver
satisfactory follow-up services during the after-sales period within the
post-completion stage of a project, which can last up to five years.
The credit term is typically stipulated in the agreement, which may vary
on a case-by-case basis depending on project.
For some of the Group ’s large-scale Digitalisation Solution Services
projects, the Group may only receive payment after the end users, who
are typically regulatory authorities or public institutions, have made the
corresponding payment to the Group ’s customers.
Payments are typically made by way of bank transfers.
After-sales period: . . . The Group may be requi red to provide after-sales services to its
customers after the completion of a project or the expiry of the trial
operation period. During the after-sales period, the Group is typically
responsible for rectifying all defects that are due to its non-
conformance to the relevant specifications. The Group may also be
required to provide remote and/or on-site technical support services or
software upgrade during the after-sales period which typically lasts for
three months to five years.
Maintenance services: For some of the agreements with customers in respect of the
Integrated Solution Services projects, the Group would provide System
Maintenance Services for a period o f approximately four to five years.
Intellectual property
r i g h t s : ...........
In respect of any self-developed software or core technologies of the
Group which have been sold or applied in the software systems
provided to the customers, the ownership of the intellectual property
rights associated with the self-developed software or core technologies
is retained by the Group, while the customers are conferred the
licensed right to use such softwar e systems. There is typically no
restriction for the Group to apply i ts core technologies in respect of a
particular customer ’s project to other customers ’ projects. For
examples of the core technologies developed and adopted by the
Group which had been applied to the projects undertaken by the Group
during the Track Record Period, please refer to the paragraph headed
‘‘Research and development – Self-developed core technologies ’’ in
this section.
BUSINESS
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In respect of any software which is the end-product of the Group ’s
customised development services, the ownership of the intellectual
property rights associated with the end products shall be transferred to
the customers upon provision of the services.
In respect of any third-party software sourced from third-party
suppliers, the Group does not own the associated intellectual property
rights, and the customers are conferred the licensed right to use such
software systems.
Liquidated damages: . If the project is delayed due to reason caused by the Group, the Group
would be liable to pay liquidated damages. However, if the delay is
caused by the customer, such as due to variation of work scope, the
Group would normally be entitled to an extension of time.
T ermination: . . . . . . . . Typically, the agreement may be terminated by mutual agreement or as
a result of a breach of the agreement by the defaulting party, in which
case the non-defaulting party may terminate the agreement.
As confirmed by the Directors, during the Track Record Period and up to the Latest
Practicable Date, the Group did not experience any material delays in respect of its
T elecommunications Infrastructure Services proje cts or Digitalisation Solution Services projects
which may result in damages or compensation being imposed on it. Furthermore, the Directors
are not aware of any cancellation of projects or work orders during the Track Record Period and
up to the Latest Practicable Date.
Five largest customers
The Group ’s revenue attributable to its five largest customers in each year during the Track
Record Period amounted to approximately RMB 476.3 million, RMB409.9 million and RMB592.3
million, representing approxima tely 99.4%, 99.2% and 97.2% of its total revenue, respectively,
while the Group ’s revenue attributable to its largest customer in each year during the Track
Record Period, namely Custome r A, amounted to approximately RMB332.9 million, RMB237.7
million and RMB297.3 million for the years e nded 31 December 20 21, 2022 and 2023,
respectively, representing approximatel y 69.5%, 57.5% and 48.8% of its total revenue,
respectively. As at the Latest Practicable Date, the Group ’s business relationships with each of
its five largest customers in each year dur ing the Track Record Period ranged from
approximately three to 21 years. Set out below is a breakdown of the Group ’s revenue
attributable to its five largest customers in each year during the Track Record Period:
BUSINESS
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Year ended 31 December 2021
Rank Customer Background
Principal services
provided by the Group
Year of
commencement
of business
relationship
Typical credit
terms and
payment
method (Notes 7, 8)
Transaction
amount
Percentage of
total revenue for
the year
(RMB ’000)
1C u s t o m e r A (Notes 1, 2) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary principally engages in
telecommunications and information related
businesses and for the year ended 31 December
2023, its revenue was approximately RMB1,009.3
billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2003 For
Telecommunications
Infrastructure
Services: 30 days
from receipt of
invoice; for
Digitalisation
Solution Services:
7 days to 3
months,
bank transfer
332,929 69.5%
2C u s t o m e r B
(Notes 1, 3) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary is principally engaged in the
provision of fundamental telecommunications
businesses including comprehensive wireline
communications services, mobile communications
services, value-added telecommunications businesses
such as Internet access services, information
services and other related services and for the year
ended 31 December 2023, its revenue was
approximately RMB513.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2019 For
Telecommunications
Infrastructure
Services: 30 days
from receipt of
invoice; for
Digitalisation
Solution Services:
payment by stages
up to 60 months,
bank transfer
61,071 12.7%
3C u s t o m e r C
(Notes 1, 4) ... T h e w o r l d ’s largest telecommunications tower
infrastructure service provider in 2021, the shares of
which are listed on the Main Board of the Stock
Exchange. It principally engages in the construction,
maintenance and operation of base station ancillary
facilities such as telecommunications towers, public
network coverage in high-speed railways and
subways, and large-scale indoor distributed antenna
systems. For the year ended 31 December 2023, its
revenue was approximately RMB94.0 billion.
T elecommunications
Infrastructure Services
2015 Payable on
presentation of
monthly invoice,
bank transfer
46,886 9.8%
4C u s t o m e r D
(Notes 1, 5) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, the shares of which are listed on
the Main Board of the Stock Exchange, and is
indirectly controlled by a joint stock company
incorporated under the laws of the PRC and listed
on the Shanghai Stock Exchange. It principally
engages in the provision of comprehensive
telecommunications services. For the year ended 31
December 2023, its revenue was approximately
RMB372.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2016 For
Telecommunications
Infrastructure
S e r v i c e s :u pt o3 0
days from receipt
of invoice; for
Digitalisation
Solution Services:
up to 15 days from
receipt of invoice,
bank transfer
24,229 5.1%
5C u s t o m e r F
(Note 6) . . . . . A state-owned joint-stock commercial bank in the
PRC, the shares of which are dually listed on the
Main Board of the Stock Exchange and the
Shanghai Stock Exchange and principally provides
its customers with various corporate and personal
financial products and services. For the year ended
31 December 2023, its net operating income was
approximately RMB258.0 billion.
Digitalisation Solution Services 2021 10 days from
receipt of invoice,
bank transfer
11,176 2.3%
Total 476,291 99.4%
BUSINESS
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--- page 236 ---
Notes:
1. Refers to the ultimate customer and its group entities
2. During the year ended 31 December 2021, the Group generated revenue for the provision from services to 50
group entities of Customer A.
3. During the year ended 31 December 2021, the Group gene rated revenue for the prov ision from services to six
group entities of Customer B.
4. During the year ended 31 December 2021, the Group generated revenue for the provision from services to 18
group entities of Customer C.
5. During the year ended 31 December 2021, the Group generated revenue for the provision from services to seven
group entities of Customer D.
6. During the year ended 31 December 2021, the Group generated revenue from the provision of services to one
branch office of Customer F .
7. The credit term set out herein is for reference only, and is related only to the framework agreement with the
customer which had the largest maximum/estimated con tract value during the relev ant year. In practice, the
customer may have entered into more than one framework agreement with the Group, and the credit term may
vary amongst those agreements.
8. The Group typically grants its customers credit perio ds of up to 30 days pursuant to the agreement. However, as
confirmed by the Directors, having considered the business relationships with the customers as well as their
established background, the Group generally agrees to extend the credit periods to up to 90 days, in view of the
timeframe required for the c ustomers to complete their internal pro cedures for proces sing the payments.
BUSINESS
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--- page 237 ---
Year ended 31 December 2022
Rank Customer Background
Principal services
provided by the Group
Year of
commencement
of business
relationship
Typical credit
terms and
payment
method (Notes 7, 8)
Transaction
amount
Percentage of
total revenue for
the year
RMB ’000
1C u s t o m e r A (Notes 1, 2) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary principally engages in
telecommunications and information related
businesses and for the year ended 31 December
2023, its revenue was approximately RMB1,009.3
billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2003 For
Telecommunications
Infrastructure
S e r v i c e s :u pt o3 0
days from receipt
of invoice; for
Digitalisation
Solution Services:
30 days from
receipt of invoice,
subject to payment
from end user,
bank transfer
237,660 57.5%
2C u s t o m e r D
(Notes 1, 3) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, the shares of which are listed on
the Main Board of the Stock Exchange, and is
indirectly controlled by a joint stock company
incorporated under the laws of the PRC and listed
on the Shanghai Stock Exchanges. It principally
engages in comprehensive telecommunications
services. For the year ended 31 December 2023, its
revenue was approximately RMB372.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2016 For
Telecommunications
Infrastructure
S e r v i c e s :u pt o3 0
days; for
Digitalisation
Solution Services:
30 days, bank
transfer
89,403 21.6%
3C u s t o m e r C
(Notes 1, 4) ... T h e w o r l d ’s largest telecommunications tower
infrastructure service provider in 2021, the shares of
which are listed on the Main Board of the Stock
Exchange. It principally engages in the construction,
maintenance and operation of base station ancillary
facilities such as telecommunications towers, public
network coverage in high-speed railways and
subways, and large-scale indoor distributed antenna
systems. For the year ended 31 December 2023, its
revenue was approximately RMB94.0 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2015 For
Telecommunications
Infrastructure
Services: payable
on presentation of
invoice; for
Digitalisation
Solution Services:
14 days, bank
transfer
60,816 14.7%
4C u s t o m e r B
(Notes 1, 5) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary is principally engaged in the
provision of fundamental telecommunications
businesses including comprehensive wireline
communications services, mobile communications
services, value-added telecommunications businesses
such as Internet access services, information
services and other related services and for the year
ended 31 December 2023, its revenue was
approximately RMB513.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2019 For
Telecommunications
Infrastructure
Services: 30 days
from receipt of
invoice; for
Digitalisation
Solution Services:
30 to 180 days,
bank transfer
15,581 3.8%
5C u s t o m e r F
(Note 6) . . . . . A state-owned joint-stock commercial bank in the
PRC, the shares of which are dually listed on the
Main Board of the Stock Exchange and the
Shanghai Stock Exchange and principally provides
its customers with various corporate and personal
financial products and services. For the year ended
31 December 2023, its net operating income was
approximately RMB258.0 billion.
Digitalisation Solution
Services
2021 10 days, bank
transfer
6,416 1.5%
Total 409,876 99.2%
BUSINESS
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--- page 238 ---
Notes:
1. Refers to the ultimate customer and its group entities.
2. During the year ended 31 December 2022, the Group generated revenue from the provision of services to 52
group entities of Customer A.
3. During the year ended 31 December 2022, the Group generated revenue from the provision of services to 13
group entities of Customer D.
4. During the year ended 31 December 2022, the Group generated revenue from the provision of services to 31
group entities of Customer C.
5. During the year ended 31 December 2022, the Group ge nerated revenue from the prov ision of services to seven
group entities of Customer B.
6. During the year ended 31 December 2022, the Group gen erated revenue from the pr ovision of services to two
branch offices of Customer F .
7. The credit term set out herein is for reference only, and is related only to the framework agreement with the
customer which had the largest maximum/estimated con tract value during the relev ant year. In practice, the
customer may have entered into more than one framework agreement with the Group, and the credit term may
vary amongst those agreements.
8. The Group typically grants its customers credit perio ds of up to 30 days pursuant to the agreement. However, as
confirmed by the Directors, having considered the business relationships with the customers as well as their
established background, the Group generally agrees to extend the credit periods to up to 90 days, in view of the
timeframe required for the c ustomers to complete their internal pro cedures for proces sing the payments.
BUSINESS
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--- page 239 ---
Year ended 31 December 2023
Rank Customer Background
Principal services
provided by the Group
Year of
commencement
of business
relationship
Typical credit
terms and
payment
method (Notes 6, 7)
Transaction
amount
Percentage of
total revenue for
the year
RMB ’000
1C u s t o m e r A (Notes 1, 2) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary principally engages in
telecommunications and information related
businesses and for the year ended 31 December
2023, its revenue was approximately RMB1,009.3
billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2003 For
Telecommunications
Infrastructure
S e r v i c e s :u pt o3 0
days from receipt
of invoice; for
Digitalisation
Solution Services:
30 days from
receipt of invoice,
subject to payment
from end user,
bank transfer
297,250 48.8%
2C u s t o m e r D
(Notes 1, 3) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, the shares of which are listed on
the Main Board of the Stock Exchange, and is
indirectly controlled by a joint stock company
incorporated under the laws of the PRC and listed
on the Shanghai Stock Exchanges. It principally
engages in comprehensive telecommunications
services. For the year ended 31 December 2023, its
revenue was approximately RMB372.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2016 For
Telecommunications
Infrastructure
S e r v i c e s :u pt o3 0
days; for
Digitalisation
Solution Services:
30 days, bank
transfer
132,080 21.7%
3C u s t o m e r C
(Notes 1, 4) ... T h e w o r l d ’s largest telecommunications tower
infrastructure service provider in 2021, the shares of
which are listed on the Main Board of the Stock
Exchange. It principally engages in the construction,
maintenance and operation of base station ancillary
facilities such as telecommunications towers, public
network coverage in high-speed railways and
subways, and large-scale indoor distributed antenna
systems. For the year ended 31 December 2023, its
revenue was approximately RMB94.0 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2015 For
Telecommunications
Infrastructure
Services: payable
on presentation of
invoice; for
Digitalisation
Solution Services:
14 days, bank
transfer
126,362 20.7%
4C u s t o m e r B
(Notes 1, 5) ... O n e o f t h e P R C ’s Big Three telecommunications
network operators, which has a subsidiary that is
dually listed on the Main Board of the Stock
Exchange and the Shanghai Stock Exchange. The
listed subsidiary is principally engaged in the
provision of fundamental telecommunications
businesses including comprehensive wireline
communications services, mobile communications
services, value-added telecommunications businesses
such as Internet access services, information
services and other related services and for the year
ended 31 December 2023, its revenue was
approximately RMB513.6 billion.
T elecommunications
Infrastructure Services and
Digitalisation Solution
Services
2019 For
Telecommunications
Infrastructure
Services: 30 days
from receipt of
invoice; for
Digitalisation
Solution Services:
30 to 180 days,
bank transfer
22,747 3.7%
5 C u s t o m e rI ......... A g r o u p e n t i t y o f t h e f o u r t h l a r g e s t
telecommunications network operator in the PRC, a
state-owned enterprise, which officially commenced
its telecommunications network operation business in
October 2020 after it has obtained the requisite
license from the government and primarily operates
a 5G network and a nationwide cable TV network in
the PRC. Customer I has a registered capital of
approximately RMB132.8 billion.
Digitalisation Solution
Services
2023 30 days,
bank transfer
13,876 2.3%
Total 592,315 97.2%
BUSINESS
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--- page 240 ---
Notes:
1. Refers to the ultimate customer and its group entities.
2. During the year ended 31 December 2023, the Group generated revenue from the provision of services to 54
group entities of Customer A.
3. During the year ended 31 December 2023, the Group generated revenue from the provision of services to 18
group entities of Customer D.
4. During the year ended 31 December 2023, the Group generated revenue from the provision of services to 31
group entities of Customer C.
5. During the year ended 31 December 2023, the Group generated revenue from the provision of services to 10
group entities of Customer B.
6. The credit term set out herein is for reference only, and is related only to the framework agreement with the
customer which had the largest maximum/estimated con tract value during the relev ant year. In practice, the
customer may have entered into more than one framework agreement with the Group, and the credit term may
vary amongst those agreements.
7. The Group typically grants its customers credit perio ds of up to 30 days pursuant to the agreement. However, as
confirmed by the Directors, having considered the business relationships with the customers as well as their
established background, the Group generally agrees to extend the credit periods to up to 90 days, in view of the
timeframe required for the c ustomers to complete their internal pro cedures for proces sing the payments.
The Directors confirm that each of the Group ’s five largest customers in each year during
the Track Record Period are Independent Third Parties and none of the Directors, or their close
associates or any Shareholder holding more than 5% of the Company ’s issued share capital had
any interests in any of the Group ’s five largest customers in each year during the Track Record
Period. T o the best knowledge of the Directors having made all reasonable enquiries, none of
the Group ’s five largest customers in each year during the Track Record Period was also its
supplier during the Track Record Period.
Historical concentration in revenue derived from the Group ’s five largest customers in
each year during the Track Record Period
T elecommunications network operators ar e important to the PRC government. The
telecommunications industry is considered a strategic sector that is closely tied to national
security and stability, as it plays a critical ro le in the flow of information and communication
within the country. T elecommunications network operators in the PRC are responsible for
providing the infrastructure and services that enable communication and information exchange,
including voice and data transmission, intern et access, and mobile ser vices. As such, they are
in a position to collect, store, and transmit large amounts of sensitive information, including
personal data, financial information, and government communications. The PRC government
has implemented tight control over the telecommunications industry to ensure that national
security concerns are addressed, including the allocation of licenses and spectrum. This control
has led to a limited number of players in the market, as the government allocates licenses and
spectrum only to a select few players including, Customer A, Customer D and Customer B,
being the Big Three. It was only until October 2020 the fourth largest telecommunications
network operator officially commenced the telecommunications network operation business after
it has obtained the requisite license from the PRC government. In spite of this, as advised by
Ipsos, the limited competition in the industry gives these players greater bargaining power in
their partnerships with telecommunications infrastructure services providers.
BUSINESS
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--- page 241 ---
During the Track Record Period, the Group ’s revenue was relatively concentrated and
largely attributable to Customer A, Customer D, Customer C and Customer B, which in
aggregate amounted to approximately RMB4 65.1 million, RMB403.5 million and RMB578.4
million, representing approxima tely 97.1%, 97.7% and 94.9% of its total revenue, respectively.
The Directors consider that the Group ’s concentration in revenue is largely attributable to the
limited number of telecommunications network operators in the PRC ’s telecommunications
industry as mentioned above, essentially taken up almost all of the market share. Furthermore,
according to the Ipsos Report, while the PRC government has taken steps to open up the
telecommunications industry for private investment in recent years, due to the extremely high
entry barriers attributable to the significant investment in infrastr ucture, technology and
expertise, the former triopoly of the Big Three, which now becomes the quadropoly with the
recent addition of the fourth largest telecommunications network operator, is expected to remain
in the foreseeable future. The Bi g Three together with the world ’s largest telecommunications
tower infrastructure service provider had accounted for over 90% of the completed investment in
the telecommunications infrastructure service s in the PRC. In light of this, as advised by Ipsos,
it is common for integrated service provide rs such as the Group who primarily act for
telecommunications network operators and telecommunications tower infrastructure service
providers to have a high revenue concentration on a few customers.
Customer A is the largest customer of the Group in each year during the Track Record
Period, the Group ’s revenue attributable to Customer A amounted to approximately RMB332.9
million, RMB237.7 million and RMB297.3 million, re presenting approximately 69.5%, 57.5% and
48.8% of the Group ’s total revenue for each of the years ended 31 December 2021, 2022 and
2023, respectively. The Directors believe that the high revenue contribution from Customer A is
largely due to the fact that (i) the Group is based and the majority of its projects are located in
Jiangxi Province where Customer A enjoys a dominant market position; and (ii) the Group had
established a relatively long business relationship with Customer A compared with other
telecommunications network operators.
The gross profit margin for the Group ’s projects with Customer A for the years ended 31
December 2021, 2022 and 2023, was approximately 14.3%, 15.9% and 20.9%, respectively. The
gross profit margin for Customer A slightly increased from approximately 14.3% for the year
ended 31 December 2021 to approximately 15.9% in 2022, which was primarily attributable to
the completion of a Software Solution Services project involving customised development of
software for the digital government sector in 2022 which incurred minimal project costs. Such
increase was partially offset by the absence of recognition of revenue from Integrated Solution
Services projects and the continuous increase in costs of ancillary construction materials such
as cables and wires. The Group ’s gross profit margin for Cus tomer A for the year ended 31
December 2023 continued to increase to approximately 20.9% due to (i) the practical completion
of works under several Infrastructure Construction Services projects in 2023 involving provision
of power grid connection services, access network related services and wireless network
equipment installation works which had a higher gross profit margin due to high complexity and
specialised skills required, and (ii) the completion of an increased number of Digitalisation
Solution Services projects in 2023, which had a high gross profit margin, when compared to that
in 2022.
BUSINESS
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--- page 242 ---
Customer A is one of the world ’s largest telecommunications companies, with a significant
presence in the PRC, its corporate structure is designed to enable efficient and effective
management and operations while maintaining centralised control and oversight at the top level.
In general, Customer A is organised into a headquarters and several regional companies, such
as subsidiaries or branches at province-level or city-level. The headquarters is responsible for
overall strategy and management, while the regional companies are responsible for managing
the telecommunications infrastructure and services within their respective regions, including the
construction and maintenance of network infrastructure and the provision of telecommunications
services to customers. The Directors believe that this structure enables Customer A to efficiently
manage its operations while ensuring that it can respond to local market conditions and
requirements. The Group had provided services for 50, 52 and 54 subsidiaries/branches of
Customer A for the years ended 31 December 2021, 2022 and 2023, respectively, and no single
subsidiary/branch of Customer A had contributed revenue that accounted for more than 20% of
the Group ’s total revenue in the corresponding years. During the Track Record Period and up to
the Latest Practicable Date, there has been no material change in the principal project terms
with Customer A, which were governed by individual framework agreements between the Group
and Customer A on a project-by-project basis, and as confirmed by the Directors, there has
been no failed projects with Customer A.
The Group has maintained a continuous, sustainable and mutually beneficial business
relationship with Customer A for over 20 years and that its business with Customer A will
continue to grow over time. The Directors consider that the Group ’s sound business relationship
with Customer A is a testament to its ability in pro viding quality services and solutions, and its
capabilities is further reflected in the fact that the Group had received multiple industry awards
relating to its performance incl uding awards from Customer A and other customers, signifying its
role as an excellent service provider. In addition, according to the Ipsos Report, there are
multiple entry barriers to the te lecommunications integrated service industry limiting the number
of market players, including (i) a strong capital position, as a typical project involves significant
upfront commitment of resources and capital and the payment process can be lengthy and
delays may occur; (ii) a proven track record, as market players are required to demonstrate their
competence and experience in the field during t he tender process; and (iii) specific licenses,
which are required for a company to participate in the projects of the key market players in the
telecommunications infrastruc ture services industry. Having considered the foregoing, the
Directors believe that the Group is one of the key service providers in the PRC headquartered
in Jiangxi Province and cannot be easily supplanted by other market players. Furthermore, the
Directors are of the view that the regional companies of telecommunications network operators
have autonomy to invite and decide tenders for the projects within their respective regions,
thereby preventing any large sca le inter-regional material fail ures or omissions in the works
performed. In case the Group failed a particular project in a particular region, the Group will still
be eligible to tender and continue its business relationship with other regional subsidiaries/
branches of Customer A, effectively mitigatin g the risk from high revenue concentration.
BUSINESS
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--- page 243 ---
Notwithstanding the above, the Group has devoted extensive efforts to reducing its reliance
on Customer A through expanding its business with Customer C, Customer D and Customer B.
For the years ended 31 December 2021 and 2022, the aggregate revenue derived from
Customer C, Customer D and Customer B increased from approximately RMB132.2 million for
the year ended 31 December 20 21 to approximately RMB165. 8 million for the year ended 31
December 2022, and further inc reased to approximately RMB281.2 million for the year end 31
December 2023, which accounted for approximately 27.6%, 40.1% and 46.1% of the Group ’s
total revenue during the corresponding years. Among the Group ’s 52 Pre-revenue Projects as at
the Latest Practicable Date, 32 were for Customer C, Customer D and Customer B and of which
26 were Infrastructure Construction Services projects, four were Infrastructure Maintenance
Services projects and two were Digitalisation Solution Services projects.
Following the Listing, the Group endeavours to continue to expand its business with other
major customers so as to reduce its reliance on any single customer. The Group is actively
pursuing the collaboration with the fourth largest telecommunications network operator in the
PRC which holds a significant position within t he industries as it operates a 5G network and a
nationwide cable TV network. The Group also intends to further develop its Digitalisation
Solution Services business segment where apart from telecommunications network operators
and telecommunications tower infrastructure service provider, its customers included, local
government, quasi-government institutions, state-owned enterprises and private companies.
Revenue derived from these other customers during the Track Record Period amounted to
approximately RMB1 3.1 million, RMB6.4 million and RMB14.2 million, representing
approximately 11.5%, 9.1% and 11.7% of the Group ’s revenue derived from the provision of
Digitalisation Solution Services.
The Group ’s customer who is also its supplier
The Group ’s five largest customers in each year during the Track Record Period included
the Big Three, which are the three largest telecommunications network operators in the PRC,
and the world ’s largest telecommunications tower infras tructure service provider in 2022. Due to
the nature of the Group ’s T elecommunications Infrastructure Services projects, the Group may
on a few occasions be required to pay for the service fees for certain telecommunications
services (such as mobile telecommunications servi ces and Internet network resources) provided
by Customer D to enable the Group to perform the services required under such projects. During
the Track Record Period, (i) the revenue genera ted from provision of services to Customer D,
w h oi sa l s oo n eo ft h eG r o u p’s suppliers, amounted to approximately RMB24.2 million, RMB89.4
million and RMB132.1 million, respectively, rep resenting approximately 5.1%, 21.6% and 21.7%
of the total revenue, respectively; (ii) the gross profit generated from the same amounted to
approximately RM B4.8 million, RMB41.9 million and RMB38.9 million, representing
approximately 5.3%, 40.4% and 26.1% of the total gross profit, respectively; and (iii) the gross
profit margin generated thereof was approximately 20.0%, 46.8% and 29.4%, respectively. The
Group ’s purchases from Customer D during the Track Record Period amounted to approximately
RMB77,000, nil and nil, respectively, which the Directors believe to be insignificant.
BUSINESS
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--- page 244 ---
SUPPLIERS
During the Track Record Period, the Group ’s suppliers mainly consisted of its (i) labour
suppliers which would supply labour and ancillary construction materials for the Group ’sp r o j e c t s
and perform the required tasks as specified in the relevant contracts; and (ii) hardware and
software suppliers who would supply hardware (such as cables, switches, cameras, biometric
scanners, monitors, computers and data storage and processing system), third-party software
and technical support and maintenance services. For the years ended 31 December 2021, 2022
and 2023, the Group ’s total procurement costs amounted to approximately RMB393.2 million,
RMB310.4 million and RMB473. 1 million, respectively.
Labour suppliers
During the Track Record Period, the Group generally engaged labour suppliers to supply
labour services for its T elecommunications Infr astructure Services projects. As advised by the
PRC Legal Advisers, the engagement of labour suppliers by the Group does not constitute
subcontracting in nature, and the labour suppliers are not considered as the Group ’s
subcontractors. The primary reasons are as follows: (i) during the performance of the project,
the Group retained control over the core management and technical aspects in relation to its
T elecommunications Infrastructure Services, and the workers of the labour suppliers would
typically only carry out sporadic, non-core but labour-intensive on-site works under the
instructions and supervision of the Group ’s project management team and project manager
designated for the projects; (ii) the Group is ultimately responsible to its customers for the works
under the project (including the works completed by its labour suppliers), and it independently
assumes contractual resp onsibilities (as opposed to assuming joint and several liability with the
labour suppliers); and (iii) engaging labour suppliers on a large scale is an industry practice
within the telecommunications infrastructure and maintenance services industry in the PRC.
Further, as confirmed by the PRC Legal Advisers, the Group has not been involved in or
experienced any disputes, litigations, penalti es or breach of the framework agreement with its
customers in respect of the engagement of labour suppliers to supply labour services.
Under the Group ’s agreement with its labour suppliers, they would be responsible for
arranging for sufficient workers and completing the works under the instructions of the Group ’s
project managers. Typically, the Group would engage the labour suppliers for completing the on-
site labour intensive works, such as constructi on of base station towers, excavation of cable
trenches, laying of cables, installation and demolishment of telecommunications equipment, and
transportation of materials and supplies. The labour suppliers would also generally be
responsible for the provision of ancillar y construction materials needed for the Group ’s
T elecommunications Infrastructure Services projects while the Group would remain responsible
for the core aspects of the projects such as overall project management and implementation,
testing and inspection as well as quality control. The Directors believe that through the use of
labour provided by the Group ’s labour suppliers, the Group can better allocate its skilled labour
and reduce its administrative works and fixed costs to maintain a large number of workers thus
achieving higher operational efficiency as well as greater cost savings and increase its
profitability. T o further illustrate the above, the Group ’s T elecommunicati ons Infrastructure
Services projects are labour intensive and are situated across Central Region, Western Region,
Eastern Region and Northeastern Region of the PRC. Given the varied locations of the Group ’s
projects, it would not be easy to manage a considerable number of workers across the various
regions nor economically feasible to directly ma intain a significant labour force which would
BUSINESS
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--- page 245 ---
need to be constantly redeployed elsewhere upon completion of a project or otherwise laid off.
In light of that, it is therefore highly beneficial to the operation of the Group to engage labour
suppliers locally where the projects are located. According to the Ipsos Report, it is common in
the telecommunications industry for infrastructure service providers such as the Group to
engage labour suppliers as it enables them to better focus on core aspects of a project as
mentioned above and catering to ad hoc customer needs while allowing it to reduce its overall
overhead costs.
The Group maintains a list of approved labour suppliers that are selected based on a
number of criteria including but not limited to their scale of workforce, location and qualifications
(including possessing the requisite qualifications or licences which typically include the
Qualification Certificate of Construction Enterprise* （ 建築業企業資質證書 ）and Work Safety
License*（ 安全生產許可證 ）issued by the relevant authorities in the PRC for carrying out the
required tasks involved in the Group ’s projects). When selecting the appropriate labour suppliers
for use in its projects, the Group would obtain quotations from multiple suppliers on the
approved list. After considering the nature, pricing and location of the relevant project, the
Group would select the most appropriate labour supplier. In order to ensure the quality of the
Group ’s labour suppliers, the Group will generally require the labour suppliers to report to the
Group on a monthly basis and the Group ’s project managers will closely monitor and review the
works of its labour suppliers to ensure their adherence to the plans and specifications as
outlined in the relevant agreements and/or work orders and the standard of the Group ’s
customers. Where the labour supplier fails to perform as required, it will be reported to the
Group ’s management and the Group will take appropriate actions which may include (i) carrying
out discussions to understand their reasons for their delay or under performance, (ii) deploying
the Group ’s direct staff to assist in carrying out the r equisite tasks and/or (iii) replacing the
labour supplier to ensure that no further delay or material issues will arise. The Directors confirm
that during the Track Record Period and up to the Latest Practicable Date, the Group did not
experience any material delay or issue due to the failure of its labour suppliers in performing as
required.
As at the Latest Practicable Date, the Group maintained a list which contained over 60
approved labour suppliers whom the Group would engage from time to time. The list would be
reviewed periodically by the management of the Group in light of the above factors and
underperforming labour suppliers would not be engaged by the Group for new projects, and new
qualified labour suppliers may be added to the list.
BUSINESS
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Salient terms of framework agreements entered into with the Group ’s labour suppliers
The Group typically enters into framework agreements with the labour suppliers which
would set out the basic terms of their engagement. Set out below are the salient terms of a
typical framework agreement entered into between the Group and its labour suppliers during the
Track Record Period:
Type and scope of works: . . . . . The scope of works that the labour supplier is expected to
perform is broadly set out in the framework agreement and
will be further specified in the work order(s) to be placed or
the specific task agreement(s) to be entered into by the
Group with the labour supplier during the term of the
framework agreement.
T e r m : ................... T h et e r mo ft h ef r a m e w o r ka g r e e m e n tt y p i c a l l yl a s t sf o ro n e
year. Depending on the length of implementation period of
the Group ’s project, the Group would typically renew the
framework agreement with its labour supplier on an annual
basis by mutual agreement.
Payment and credit terms: . . . . Payments are made by way of bank transfers.
The labour supplier would generally extend to the Group a
credit period of 30 to 45 days from the date of the Group ’s
r e c e i p to fp a y m e n t sf r o mi t sc u s t o m e r s .
Quality and default liability
p e r i o d :.................
If the quality of the work completed by the labour supplier
fails to meet the standards of the Group or its customer, the
labour supplier is responsible for the rectification of the
defects and the associated co sts. The labour supplier may
also be required to provide a defect liability period for a term
commensurate with that provided by the Group to its
customer under the same project.
Performance bond: . . . . . . . . . . The Group may request the labour supplier to provide a
performance bond in favour of the Group, which may be
provided by way a bank guarantee, in accordance to the
amount as set out in the work orders to be placed by the
Group. The funds represented by the bond less any
deduction of liquidated damages (if any) would be released
to the labour supplier without interest (i) within 30 days from
the expiration of the framework agreement, or (ii) if the
Group has provided performance bond to its customer in
respect of the same project, after the return of the same
from its customer, whichever is the later.
Liquidated damages: . . . . . . . . The labour supplier would be liable to pay liquidated
damages for each day it delayed the schedule of the project.
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T ermination: . . . . . . . . . . . . . . . Generally, the Group is entitled to terminate the framework
agreement and the work orders in the event of: (i) change in
the responsible manager of the labour supplier without the
Group ’s consent; (ii) material delay in the project schedule
caused by the labour supplier; (iii) failure to timely rectify
sub-standard work as instructed; (iv) subcontracting without
the Group ’s consent; or (v) breach of representations and
warranties by the labour supplier where the objectives could
no longer be achieved.
Either party is entitled to terminate the framework agreement
and the work orders in the event of (i) force majeure; (ii)
breach of contract by the other party; or (iii) termination or
suspension of construction by the Group ’s customer.
A f t e re n t e r i n gi n t oaf r a m e w o r ka g r e e m e n t ,t h eG r o u pw o u l di nt u r n ,b a s e do nt h ew o r k
order received from its customers, place a separate work order which would set out the relevant
terms such as the contract value, type, location and scope of the work to be completed by the
labour supplier as well as the target completion date and the payment terms. In other
circumstances, the Group may enter into task specific agreements with its labour suppliers
which would generally set out terms such as contract value, type and scope of works, term,
payment and credit terms, liquidated damages and insurance. For payment terms, although the
work order would generally stipulate that the Group would generally provide its labour supplier
an advance payment of approximately 50% of the contract value as stipulated in the work order
within 15 days after the commencement of works, in practice, according to the framework
agreement, the suppliers would generally extend to the Group a credit period of 30 to 45 days
from the date of the Group ’s receipt of payments from its customers. After the works are
accepted by the Group ’s customers at settlement audit and expiry of the defect liability period,
the Group ’s customers would pay the Group accordingly and the Group would then pay the
remaining balance of the contract value to the labour suppliers. If performance bond has been
provided, it would generally be released to the labour supplier after the expiration of the
framework agreement, or if the Group has also provided performance bond to its customer, after
the release of the same from its customer, whichever is the later.
As confirmed by the Directors, during the Track Record Period, the Group did not
experience any material litigation or dispute relating to late payments to its labour suppliers
which would have a material impact upon its business operations and financial condition.
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Hardware and software suppliers
The materials and equipment required by the Group in carrying out works under its
T elecommunications Infrastructure Services projects during the Track Record Period primarily
consisted of (i) telecommunications equipment, which would generally be provided by its
customers, and (ii) ancillary cons truction materials, such as ceme nt, reinforcement steels and
screws, which would generally be provided by the labour suppliers. For the hardware and third-
party software systems required in the Group ’s Integrated Solution Services projects, the
relevant agreements with the Group ’s customers would typically include a list which sets out the
specifications such as the name, brand and product code of the hardware and where applicable,
the third-party software required, and the Group will source such hardware and software from its
approved suppliers or suppliers designated by the customers.
When selecting and approving suppliers, the Group follows a comprehensive evaluation
process that typically involves obtaining quotations from more than three suppliers for
comparison. The Group takes into account a range of factors during the process, including (i)
the price, quantity, variety and specifications of hardware and third-party software they offer, and
(ii) the payment and delivery terms. Where possible, the Group strives to source the required
hardware, such as monitors, surveillance ca meras, cables, data storage systems and other
materials, and third-party software systems from a wide range of suppliers so as to reduce its
reliance on any single supplier and to guard against any shortages.
The Group typically places order with its hardware and software suppliers after securing a
project. During the Track Record Period, the Group did not enter into any long-term purchase
agreements with its hardware and software suppliers, however, it would generally enter into
legally binding agreements with its hardware and software suppliers on an order-by-order basis.
The prices at which the Group ’s hardware and third-party software systems were supplied were
generally determined by reference to the market price. Where there is a material increase in the
price of such hardware and/or software systems after the contract has been awarded to the
Group but prior to the Group entering into contract with the hardware and software supplier, the
Group will generally need to assume the difference. However, when determining the offer price,
the Group would generally consider various factors such as price trends to guard against
material fluctuations in the costs of procurement. Prepayment is usually required depending on
the type, quantity and specifications of the hardware and software procured. Generally, the
Group is required to pay for the balance after the delivery. The hardware and software suppliers
typically grant the Group a credit period of up to 15 days upon delivery.
As confirmed by the Directors, during the Track Record Period up to the Latest Practicable
Date, the Group did not experience any material storage of, or material difficulties in procuring
materials as well as any fluctuations in the costs of its materials which had a material impact
upon its business operations and financial conditions.
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Five largest suppliers
During the Track Reco rd Period, the Group ’s procurement costs incurred which were
attributable to its five largest suppliers in e ach year amounted to app roximately RMB229.3
million, RMB222.5 million and RMB294.3 million, re presenting approximately 58.3%, 71.7% and
61.8% of its total purchases, while the procureme nt costs incurred which were attributable to the
Group ’s largest supplier in each year during the Track Record Period amounted to approximately
RMB128.3 million, RMB100.2 million and RMB91.6 million, representing approximately 32.6%,
32.3% and 19.2% of its total purchases, respectively. As at the Latest Practicable Date, the
Group ’s business relationships with each of its five largest suppliers in each year during the
Track Record Period ranged from approximately two to nine years. Set out below is a
breakdown of the Group ’s procurement costs incurred which were attributable to its five largest
suppliers in each year during the Track Record Period:
Year ended 31 December 2021
Rank Supplier Background
Principal services/
products provided
to the Group
Year of
commencement
of business
relationship
Typical credit terms and
payment method (Note)
Transaction
amount
Percentage of
total purchases
for the year
RMB ’000
1 S u p p l i e rA ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB30.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
128,316 32.6%
2 S u p p l i e rC ....... A p r i v a t e c o m p a n y b a s e d i n
G u i z h o uP r o v i n c ew i t hr e g i s t e r e d
share capital of RMB2.0 million
and principally engages in
provision of labour services
Labour services 2019 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
31,544 8.0%
3 S u p p l i e rF ....... A p r i v a t e c o m p a n y b a s e d i n
Shanghai with registered share
capital of RMB11.0 million and
principally engages in provision
of labour services
Labour services 2019 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
31,384 8.0%
4 Supplier G . . . . . . A private company based in
Jiangxi Province with registered
share capital of RMB8.0 million
and principally engages in
provision of labour services
Labour services 2021 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
22,568 5.7%
5 S u p p l i e rB ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB20.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
15,476 4.0%
Total 229,287 58.3%
Note: The credit term set out herein is for reference only, and i s related only to the individual work orders placed by the
Group to its labour supplier. In practice, according to the framework agreement, the supplier would generally
e x t e n dt ot h eG r o u pac r e d i tp e r i o do f3 0t o4 5d a y sf r o mt h ed a t eo ft h eG r o u p ’s receipt of payments from its
customers.
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Year ended 31 December 2022
Rank Supplier Background
Principal services/
products provided
to the Group
Year of
commencement
of business
relationship
Typical credit terms and
payment method (Note)
Transaction
amount
Percentage of
total purchases
for the year
RMB ’000
1 S u p p l i e rC ....... A p r i v a t e c o m p a n y b a s e d i n
G u i z h o uP r o v i n c ew i t hr e g i s t e r e d
share capital of RMB2.0 million
and principally engages in
provision of labour services
Labour services 2019 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
100,164 32.3%
2 S u p p l i e rA ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB30.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
42,242 13.6%
3 Supplier G . . . . . . A private company based in
Jiangxi Province with registered
share capital of RMB8.0 million
and principally engages in
provision of labour services
Labour services 2021 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
33,471 10.8%
4 S u p p l i e rB ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB20.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
32,428 10.4%
5 S u p p l i e rH ....... A p r i v a t e c o m p a n y b a s e d i n
Zhejiang Province with registered
share capital of RMB10.0 million
and principally engages in
provision of labour services
Labour services 2021 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
14,213 4.6%
Total 222,518 71.7%
Note: The credit term set out herein is for reference only, and i s related only to the individual work orders placed by the
Group to its labour supplier. In practice, according to the framework agreement, the supplier would generally
e x t e n dt ot h eG r o u pac r e d i tp e r i o do f3 0t o4 5d a y sf r o mt h ed a t eo ft h eG r o u p ’s receipt of payments from its
customers.
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Year ended 31 December 2023
Rank Supplier Background
Principal services/
products provided
to the Group
Year of
commencement
of business
relationship
Typical credit terms and
payment method (Note)
Transaction
amount
Percentage of
total purchases
for the year
RMB ’000
1 S u p p l i e rB ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB20.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
91,634 19.2%
2 S u p p l i e rC ....... A p r i v a t e c o m p a n y b a s e d i n
G u i z h o uP r o v i n c ew i t hr e g i s t e r e d
share capital of RMB2.0 million
and principally engages in
provision of labour services
Labour services 2019 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
61,800 13.0%
3 Supplier G . . . . . . A private company based in
Jiangxi Province with registered
share capital of RMB8.0 million
and principally engages in
provision of labour services
Labour services 2021 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
61,759 13.0%
4 S u p p l i e rA ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB30.0 million
and principally engages in
provision of labour services
Labour services 2015 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
46,202 9.7%
5 S u p p l i e rJ ....... A p r i v a t e c o m p a n y b a s e d i n
Jiangxi Province with registered
share capital of RMB10.0 million
and principally engages in
provision of labour services
Labour services 2022 50% prepayment within 15
days of commencement of
works; 40% within 30 days
of final inspection; and 10%
upon expiry of defect
liability period, bank transfer
32,928 6.9%
Total 294,323 61.8%
Note: The credit term set out herein is for reference only, and i s related only to the individual work orders placed by the
Group to its labour supplier. In practice, according to the framework agreement, the supplier would generally
e x t e n dt ot h eG r o u pac r e d i tp e r i o do f3 0t o4 5d a y sf r o mt h ed a t eo ft h eG r o u p ’s receipt of payments from its
customers.
The Directors confirm that each of the Group ’s five largest suppliers in each year during the
Track Record Period are Independent Third Parties and none of the Directors, or their close
associates or any Shareholder holding more than 5% of the Company ’s issued share capital had
any interests in any of the Group ’s five largest suppliers in each year during the Track Record
Period. T o the best knowledge of the Directors having made all reasonable enquiries, none of
the Group ’s five largest suppliers in each year during the Track Record Period was also its
customers during the Track Record Period.
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OPERATION FLOW
Telecommunications Infr astructure Services
Infrastructure Construction Services
The following flowchart illustrate s the principal stages of the Group ’s business operations
which generally apply in respect of its Infrastructure Construction Services projects:
Pre-tender
stage
Tender
stage
Implementation
stage
Completion stage
Recognition of revenue
and contract assets
based on work progress
Transfer of contract
assets to trade
receivables,
and settlement of
trade receivables by
customers
Transfer of contract
assets to trade
receivables,
and settlement of
trade receivables by
customers
Transfer of contract
assets to trade
receivables,
and settlement of
trade receivables by
customers
Post-completion stage
Infrastructure
Construction Services
Implementation of work orders
Settlement audit
Project identification
Preliminary assessment of project
Formation of a project management team
Preparation and submission of tender
documents
Award of project and the signing of
a framework agreement
Inspection and acceptance
Issuance of VAT
invoice for retention money,
if applicable
Issuance of
VAT invoice for
progress payment
Issuance of VAT
invoice for final payment
(less retention money,
if applicable)
Defect liability period
Practical completion
Engagement of labour suppliers
for provision of labour services and
ancillary construction materials
Approximately
1 to 2 months
(per work order)
Approximately
2 to 3 months
Approximately
3 to 9 months
Approximately
6 to 12 months
Approximately
1 to 1.5 months
Approximately
5 months
Approximately
1 to 10 months
Approximately
6 to 12 months
Approximately
12 to 24 months
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1. Pre-tender stage
Project identification
The Group ’s Infrastructure Construction Services projects during the Track Record
Period were generally awarded by way of open tender and the Group would normally
become aware of the opportunities to tender for projects through the publicly accessible
websites of its customers which would make available the relevant details pertaining to the
projects.
Preliminary assessment of project
Upon identifying the project which may be of relevance and interest to the Group, the
Group ’s tendering team, which consists of project management and sales and marketing
staff would conduct a preliminary assessment of the project ’s details to evaluate its
feasibility. When assessing the feasibility of a project, the Group would typically take into
account a range of factors including but not limited to the nature of the project, timing,
complexity, the Group ’s available resources and the resources required, profitability and
associated risks. As confirmed by the Directors, the timeframe typically required for project
identification and preliminary assessment of the project was approximately one to one and
a half months.
2. T ender stage
Preparation and submission of tender documents
If a project is assessed t o be feasible, the Group ’s tendering team would begin
preparation of the tender documents/quotations which would set out the details of the major
team members, qualifications relevant to the project, project schedule and bid price, and/or
a schedule of rates which contains the rates charged for ancillary construction materials
and labour. In determining the bid price, the Group generally adopts a cost-plus pricing
model after taking into account a range of factors including but not limited to the nature,
scale, complexity and location of the relevant projects as well as the estimated ancillary
construction materials and labour costs. For details regarding the other factors the Group
would consider when determining its bid price, please refer to the paragraph headed ‘‘Sales
and marketing – Pricing policy ’’ in this section. Upon completion of the preparation of the
tender documents, the Group ’s management would then review and make a final
determination as to whether to proceed.
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Award of project and the signing of a framework agreement
Upon reviewing the tender documents submitted, if the potential customer agrees to
engage the Group, the Group would typically enter into a framework agreement with the
customer. The framework agreement would set out the general work scope, price for each
type of work to be carried out and the maximum or estimated contract value (assuming that
all works under the framework agreement will be required to be carried out), which is
typically valid for a period of one to two years. For details, please refer to the paragraphs
headed ‘‘Customers ’’in this section. Where a framework agreement is entered into between
the Group and its customer, and the custome r decides to commence the works stipulated
in the framework agreement, it would generally place individual work orders with the Group.
However, the customer is not obligated to place work orders up to the entire maximum or
estimated contract value and may reduce the work scope as needed by not placing
additional work orders. In certain circumstances, instead of a framework agreement the
Group would directly enter into a formal agreement with the customer that is specific to the
task at hand. As confirmed by the Directors, the timeframe typically required from the
preparation and submission of tender documents up to the award of project and the signing
of a framework agreement was approximately five months.
3. Implementation stage
Formation of a project management team
In preparation for the commencement of the relevant project, the Group would
establish a project management team comprising a project manager responsible for
developing implementation plan, monitoring the work progress, supervising the workforce,
communicating with customers, suppliers and other relevant persons, and allocating
sufficient resources for project implementation. In addition, the project management team
would generally include technical personnel, safety personnel and workers depending upon
the complexity and scale of the overall project. As part of the Group ’s preparatory works,
the Group may also conduct a site survey to better understand the site conditions and the
tasks at hand and would devise an implementation plan to ensure that the project can be
carried out as effectively and efficiently as possible. The implementation plan would
typically contain certain details including but not limited to arrangements with suppliers,
deployment of labour, quality control and general health and safety.
Engagement of labour suppliers for provision of labour services and ancillary construction
materials
At this stage, the Group would engage labour suppliers to ensure the sufficiency of
workforce when the implementation of a project commences. Typically, the Group ’s
customers would provide the telecommunications equipment to be installed by the Group,
while the Group would procure the ancillary construction materials such as cement,
reinforcement steels and screws for the implementation of its projects if such materials are
not provided by the labour suppliers. As confirmed by the Directors, the timeframe typically
required for the formation of a project management team and the engagement of labour
suppliers for provision of labour services and ancillary construction materials was
approximately one to 10 months.
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Implementation of work orders
Once the preparatory works have been completed, the project management team
together with the labour suppliers engaged would begin carrying out the implementation
plan. Throughout this phase, the Group ’s project management team would conduct regular
inspections to ensure that the works done are carried out in accordance with the
implementation plan, that the project is capabl e of being completed within the timeframe as
required and to identify any issues or barriers which may prevent the proper execution of
the implementation plan. In addition to monitoring the work progress, the Group ’sp r o j e c t
management team would also monitor the costs incurred, the sufficiency of resources and
the quality of works performed.
The Group has adopted a number of quality control measures to ensure that the
works being carried out as well as the final deliverables are capable of meeting the strict
requirements of its customers. The project man agement team also conducts regular on-site
inspections on the progress and quality of the work completed by the Group and its labour
suppliers, and arranges for remedial works if necessary. For details relating to the Group ’s
quality control measures, please refer to the paragraphs headed ‘‘Quality control ’’ in this
section. Periodic progress meetings would also be held between the Group ’s management
and the project management team whereby the Group ’s management would be briefed as
to the project ’s status as an additional means by which to ensure that the implementation
plan is being carried out properly. There may also be periodic progress meetings with the
customers to inform them as to the status of the relevant project. The Group would
recognise revenue and corresponding contract assets based on the work progress.
4. Completion stage
Practical completion
Depending on the nature, amount, and progress of works to be carried out, as
confirmed by the Directors, the Group ’s project manager would typically acknowledge the
practical completion of the works (including the on-site labour-intensive works required to
be carried out by the labour provided by the labour suppliers) under the relevant work order
or batches of work orders, upon the receipt of the practical completion report from its
labour suppliers. As confirmed by the Directors, the timeframe generally required for the
project implementation up to and including the practical completion in respect of a work
order is approximately one to two months, whi ch is consistent with the industry norm for
work orders under projects of similar nature and scale in the PRC.
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Inspection and acceptance
After all the works relating to the relevant work order or batches of work orders have
been practically completed, and if no material defects are found, the Group would inform its
customer about the practical completion and request for completion inspection. The
customer and/or its agent, which is usually its construction supervising agent, would
commence on-site inspection so as to acknowledge the works as having been practically
completed. The Group will submit a comprehensive package of materials to the customer
and/or its agent to facilitate the measurement of progress and completion status of the
Group ’s projects, as well as the issuance of inspection reports. This package typically
includes a work progress report indicating the project ’s performance progress and the
documentation related to the relevant technical and construction works including but not
limited to the construction work layout plan, th e variation record (if any), the equipment/
materials used, the implementat ion status and the on-site insp ection record. During the on-
site inspections period, the customer or its agent may notify the Group to conduct certain
rectification works or to make certain modifications to the practical completion report based
on the findings during the on-site inspections. After the works are considered as
satisfactorily completed by the customer and/or its agent, the customer would issue an
inspection report for the relevant work order. Furthermore, in practice, as confirmed by the
Directors, the customer would generally perform an inspection and acceptance for a
number of completed work orders jointly.
T o the best knowledge of the Directors, the timeframe for completion of the inspection
and acceptance is largely driven by the progress of the inspection works and other internal
procedures and processes of the customer and/or its agent, and there may be a substantial
time lapse of around six to 12 months from the p ractical completion to the completion of
the inspection and acceptance.
Upon completion of the inspection and acceptance, the Group would hand over the
relevant portion of the work site to its customer, prepare and issue an interim VAT invoice
for the progress payment corresponding to the relevant work order, and the relevant sum of
contract assets would be transferred to trade receivables accordingly.
The customer generally settles its trade debts within the credit period granted by the
Group. T o the best knowledge of the Directors, the timeframe for the customer ’sp a y m e n t
depends on the progress of internal approval, and the process time for payment approval
generally lasted for two to three months.
Settlement audit
T ogether with the inspection report, the documentation related to the relevant
technical and construction works including but not limited to the construction work layout
plan, the variation record (if any ), the equipment/materials use d, the implementation status
and the on-site inspection record would be presented to its customer for onward review by
its internal audit team or by an external audit agent as bases for the issuance of settlement
audit reports. This process is called ‘‘settlement audit ’’, during which the audit agent will
review the relevant documentation, and it would determine whether any adjustment has to
be noted in the settlement audit account.
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Upon completion of the settlement audit process, a settlement audit report would be
issued. As confirmed by the Directors, the timeframe required for conducting the settlement
audit was generally three to nine months. T o the best knowledge of the Directors,
depending on the scale and nature of works required, there may be a number of different
construction companies/service providers involved in the same development project of the
Group ’s customer, in which case the construction works commissioned by the Group under
its Infrastructure Construction Services may only constitute a certain portion of the whole
development project of its custome r. In such circumstances, the Group ’s customer may wait
until all the different aspects of works under the same development project are completed
before carrying out the settlement audit processes altogether, leading to a significant time
lapse between the recognition of contract assets and its transfer into trade receivables.
Further, and according to the Ipsos Report, state-owned enterprises such as the
Group ’s customers often have lengthy internal approval processes which need to be
performed before they can proceed to settlement audit or approve the final accounts.
Based on the amount set out in the abovementioned settlement audit report, the
Group would prepare and issue a final VAT invoice setting out the amount of final payment
(less retention money (if any)) to its customer, thereby transferring the corresponding
amount of contract assets to trade receivables under the project, and its customer would
arrange for payment accordingly. As confirmed by the Directors, the time interval between
the completion of the settlement audit and the issuance of the final VAT invoice by the
Group in general could be upwards of six to 12 months. T o the best knowledge of the
Directors, the timeframe for the customer ’s payment depends on the progress of their
internal approval processes, which would normally take up to two to three months.
5. Post-completion stage
Defect liability period
Subsequent to the passing of the inspection and settlement audit, the defect liability
period would commence, during which the Group would be responsible for rectifying any
defects in relation to the works/services performed. With respect to the Group ’s labour
suppliers, the Group would also require them to provide a back-to-back defect liability
period to cover any defects arising from their works. Upon the expiry of the defect liability
period, the customer or its agent may conduct additional inspections to ensure that there
are no other follow up works needed, and the retention money or together with any other
sums withheld would be released to the Group. Typically, the defect liability periods granted
by the Group to its customers during the T rack Record Period ranged from 12 to 24
months. Upon the expiry of the defect liability period, the Group would be entitled to issue
a VAT invoice in respect of the retention money to its customer, thereby transferring the
remaining contract assets to trade receivables. As confirmed by the Directors, during the
Track Record Period, the Group did not experience any material claims by its customers in
relation to the works and s ervices provided by it.
T o the best knowledge of the Directors, the average timeframe from the point of
recognition of revenue and contract assets to the subsequent verification by customers is
approximately 400 days.
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Infrastructure Maintenance Services
The principal stages of the Group ’s business operations in relation to its Infrastructure
Maintenance Services projects were similar to that of the Infrastructure Construction Services
projects. During the Track Record Period, the Group ’s Infrastructure Maintenance Services
projects were generally awarded by way of open tender, and after a project was awarded, the
Group would form a project management team which would begin preparation works including
engagement of labour suppliers for the provision of labour and ancillary construction materials.
Throughout the implementation stage of the project, the project management team would also
supervise and ensure the basic maintenance, repairs and restoration works, etc. are properly
carried out. Depending on the nature of works involved, the customer may conduct monthly
reviews to assess the performance of the Group ’s services, and the Group would generally issue
invoices to its customers on a monthly basis, and the customer would arrange payment
accordingly. Typically, the term of the agreement i nr e s p e c to ft h eI n f r a structure Maintenance
Services would last for one to three years.
Digitalisation Solution Services
Integrated Solution Services an d Software Solution Services
The following flowchart illustrate s the principal stages of the Group ’s business operations
which generally apply in respect of its Integrated Solution Services and Software Solution
Services:
Project identification
and contract
negotiation stage
Implementation
stage
Completion stage
Post-completion stage
Software
Solution Services
Integrated
Solution Services
Software system
design and planning
Software system
design and planning
System installation
and integration
System installation
and integration
Inspection and acceptance
After-sales period
Formation of a project team
Project identification
and contract negotiation
Signing of contract
After-sales period/
System Maintenance Services
Inspection and acceptance and
trial operation period (if needed)
Approximately
1 week to
1 month
Approximately
12 months
Approximately
1 to 3 months
Approximately
1 to 12 months
Approximately
4 months
Procurement of
hardware and
third-party software
(if needed)
Approximately
1 month
Approximately
3 to 60 months
Approximately
up to 9 months
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1. Project identification and contract negotiation stage
Project identification and contract negotiation
The customer would generally approach the G roup to seek its Digitalisation Solution
Services by way of single-source procurement or invitation to quote, and the Group would
engage in preliminary discussion in order to understand the customer ’s needs, objectives
and budget. The Group would t hen conduct a feasibility s tudy to assess the nature,
complexity of the works as well as the Group ’s available resources and the costs and
profitability of the project. Further, the Gro up would formulate a customised plan for the
customer which would detail the choice and quantity of hardware as well as the software
required.
Signing of contract
Once a project has been secured, the Group and its customers would enter into a
formal agreement which would incorporate the necessary details such as the contract
price, implementation timeline, payment term, details of services, hardware and/or software
required. As confirmed by the Directors, the timeframe typically required for project
identification and contract negotiation up to the signing of a contract was approximately
four months for Integrated Solution Services projects and approximately up to nine months
for Software Solution Services projects.
2. Implementation stage
Formation of a project team
After the contract is signed, the Group would then form a project team which would
primarily consist of the responsible team members who would be monitoring the
implementation progress and communicating with customers, suppliers and internal staff
for overall project management.
Procurement of hardware and third-party software (if needed)
For the Integrated Solution Services projects, the Group would begin procurement of
the necessary hardware (such as monitors, su rveillance cameras, c ables, data storage
systems) and third-party software systems f rom its hardware and software suppliers.
Depending on the work scope, the Group may also require its suppliers to provide the
requisite installation services.
Software system design and planning
For projects that involve provision of software (other than third-party software), the
Group would review its own portfolio of co re software systems to assess whether any of
them can be applied or adopted for the customer ’s use, and if not depending on the
circumstances, the Group may engage third-party programmers to assist in developing or
customising new core software systems.
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System installation and integration
After completion of the said preparatory stage, the project management team would
begin carrying out the various steps of the implementation plan which would include
matters such as arranging for the installation and integration of the hardware and software
and other matters. During this stage, the Group would also maintain discussions with the
customers, suppliers and/or third-party programmers regarding the system design to ensure
that the architecture and interfaces satisfy the necessary requirements. Further, the
Group ’s project management team would also conduct site visits to monitor the progress of
the project and the costs incurred as well as ensure that the installation works for the
necessary hardware have been carried out properly in accordance with the implementation
plan.
3. Completion stage
Inspection and acceptance and trial operation period (if needed)
After completion of a stage of the project, a comprehensive package of materials will
be submitted to the customer to facilitate the measurement of progress and completion
status of the Group ’s projects, as well as the issuance of inspection reports. This package
typically includes a report summarising the completion status of works specified in the
contract and the documentation related to the relevant works including but not limited to
the trial operation records and operation instructions. The Group ’s customers would inspect
and acknowledge the completion of works and notify the Group of any defects which are
required to be rectified (if any). For some of the Group ’s projects, a trial operation period
w o u l db ep r o v i d e dt oa l l o wt h ec u s t o m e r sfor testing out the systems to ensure the
operational efficacy of the system. The trial ope ration period for the Digitalisation Solution
Services projects typically lasted for 30 days to six months.
When the Group has completed all the works specified in the contract, or after the
expiry of the trial operation period, the customer would conduct a final inspection and issue
to the Group an inspection report to confirm that the works under the agreement are
completed and formally accepted. Depending on the terms of the agreement, the Group
would be entitled to issue invoice for progress payment at this stage. As confirmed by the
Directors, the timeframe typi cally required from the formation of a project team up to the
completion of inspection and acceptance and trial operation period (if needed) was
approximately two to 12 months for Integrated Solution Services projects and
approximately one to four months for Software Solution Services projects.
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4. Post-completion stage
After-sales period
The Group may be required to provide after-s ales services to its customers after the
completion of a project or the expiry of the tr ial operation period. During the after-sales
period, the Group would typically be responsible to rectify any defects for the hardware and
software installed by the Group to ensure the system could operate and perform the
functions as anticipated. The Group may also provide remote and/or on-site technical
support services to cater to the enquiries of its customer or the end user or provide
software and system upgrade, if available. The after-sales period for the Group ’sI n t e g r a t e d
Solution Services projects typically ranged from three to 60 months, and the after-sales
period for the Group ’s Software Solution Services typic ally lasted for 12 months. Upon the
expiry of the after-sales period, the customer would release the retention money to the
Group.
T o the best knowledge of the Directors, the average timeframe (excluding five
Integrated Solution Services Pr ojects) and the average timefram e (including five Integrated
Solution Services Projects) from the point of recognition of revenue and contract assets or
trade receivables to the subsequent verification by customers is approximately 340 days
and 640 days, respectively. Such prolonged average timeframe for the Digitalisation
Solution Services projects (including five Integrated Solution Services projects) was
attributed to the extension of payment terms in relation to those five Integrated Solution
Services projects in view of the temporary liquidity constraints experienced by the end
users (including regulatory authorities and public institution). For details, please refer to the
paragraphs headed ‘‘Financial Information – Analysis of major components of the
consolidated statement of financial position – Trade and other receivables – Trade and
bills receivables ’’in this prospectus.
System Maintenance Services
For some of the Group ’s Integrated Solution Services projects, the Group would provide the
System Maintenance Services to its customers, which would include commissioned technical
support and maintenance services for the har dware and software systems delivered under its
Integrated Solution Services projects to ensure those systems are performing properly.
During the Track Record Period, the System Ma intenance Services projects undertaken by
the Group lasted for appro ximately 48 to 60 months.
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RESEARCH AND DEVELOPMENT
Digitalisation solution services industry is an industry with fast-moving market trends and
technological advancements, therefore, the Group has placed great emphasis on its research
and development capabilities t o keep abreast of and pursue technological innovation. In
recognition of the Group ’s research and development efforts, Zhonggan Communication and
GLP T echnology were initially recognised as High and New T echnology Enterprise* （ 高新技術企
業 ）in 2015 and 2020, respectively. Each of the qualification is valid for three years. For
Zhonggan Communication, the qualification was subsequently renewed in 2018 and 2021,
respectively, and for GLP T echnology, the qualification was subsequently renewed in 2023.
Furthermore, GLP Software qualified as a ‘‘Double-soft Enterprise ’’ in 2023, which is valid for
five years until 2028. As at the Latest Practicable Date, the Group had 82 employees in its
research and development team which is led by Mr. Peng Shengqian, one of the executive
Directors of the Company. For further information of the experience and credentials of Mr. Peng
Shengqian, please refer to the paragraphs headed ‘‘Directors and Senior Management –
Directors – Executive Directors ’’ in this prospectus. The majority of the Group ’s research and
development personnel have a bachelor ’s degree or have received tertiary education in various
fields including but not limited to computer ne twork technology, computer science, computer
communication and computer application.
During the Track Record Period, the Group had incurred research and development
expenses of approximately RMB19.2 million, RMB17.7 million and RMB25.9 million,
respectively, which were used for the development of various technologies and software to be
deployed in the provision of its Digitalisation Solution Services business segment. Such
expenses mainly comprised outsourcing fees and staff costs of the Group ’s research and
development staff. The Directors believe that the Group ’s research and development efforts
have largely driven the increase in significance of its Digitalisation Solution Services business
segment, particularly for those involving the use of the Group ’s self-developed software, to the
Group ’s operational results. The technologies developed as a result of the Group ’s research and
development efforts were applied and/or adopted for developing the software systems required
by its customers under the Group ’s Integrated Solution Services projects and/or Software
Solution Services projects.
Key stages of research and development process
Set out below is a process chart setting out the key stages of the Group ’s research and
development cycle:
Identification
and assessment of
market needs
Design and
development
Testing and
commissioning
Identifying and
defining a research
scope and conducting
feasibility studies
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Identification and assessment of market needs
Prior to considering the development of new technologies, the Group would generally
engage in discussions with its business partners, particularly with the Big Three, in order to stay
ahead of emerging market trends and technologies. Through these discussions, the Group
gained insights into the needs and challenges of its business partners, which can lead to
identifying new opportunities for innovation and gaining a competitive edge through anticipating
the future trends. Additionally, discussing with its business partners enables the Group to gain a
deeper understanding of the particular pain points and challenges that the technology aims to
address. This knowledge could be used to further refine the solution and ensure that it meets
the needs of its intended audience. Furthermore, by collaborating with its business partners, the
Group could determine the essential features and functionalities that are required for the
technology to be effective. This process helped the Group to develop a solution tailored to the
specific needs of its business partners and could ensure a higher likelihood of success in the
market. Due mainly to the short cycle of its Digitalisation Solution Services projects, the Group
would generally develop new technologies in anticipation of future needs, as otherwise, it would
lengthen the project cycle and reduce the Group ’s competitiveness. Further, as software is the
key component in any turnkey solution, without a vast portfolio of software offerings, the Group ’s
ability to offer relevant turnkey solutions would be highly constrained.
Identifying and defining a research sco pe and conducting feasibility studies
After identifying the market opportunities and/or customers ’ needs, the Group would
generally consider the feasibilit y of developing the proposed te chnology or software system by
taking into account factors including the relevant technical requirements, the complexity and
innovativeness of the technology involved, the Group ’s in-house expertise, the available
research and development workforce and resources, the development timeframe and the
financial resources required. The Group may also engage external consultant to advise on the
feasibility and technical requirement of the pro posed development subject. Upon deciding to
undertake in the development of new technology, the Group would prepare a research and
development plan, which would set out the estim ated resources to be deployed, including the
proposed in-house research and development team composition.
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Design and development
The design and development stage would generally commence with the design and
planning of the software architecture including details relating to crucial functions and features,
which serves as the blueprint for developing the underlying algorithms and computer coding.
Depending on the complexity and number of functional modules required, the design and
development stage will typically be conducted in phases. The Group would transform the
potential user requirements into defined technological parameters which would be relied on by
the in-house and/or third-party software programmers for undertaking the programming and
coding tasks. Depending on the cost effectiveness of individual research subjects, the Group
may engage external service providers including third-party software programmers to assist in
the required programming and coding tasks. The Directors confirmed that, even where external
service providers are engaged, the Group would be primarily responsible for the overall
development, design and planning of the relevant software architecture. The ownership of any
intellectual property rights generated therefrom would belong to the Group, and these third-party
software programmers would also be bound by the c onfidentiality obligations when undertaking
programming and coding tasks for the Group pursuant to the written agreement entered into with
the Group.
The Group would also conduct review meetings to monitor the progress of development
and may make modifications and adjustments in the software design where necessary.
Testing and commissioning
Upon completion of the design output, in order to ensure the performance of the individual
software modules as well as software system meet the baseline requirements determined by the
Group, the Group would conduct testing, commissioning and trial runs, which would typically
include bugs fixing, functionality refinement and finetuning of the system performance based on
different operating parameters. Further adjustments and modifications may also be made when
necessary.
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Self-developed core technologies
During the Track Record Period, the Group had applied its self-developed software for use in
different digitalisation related projects focusing on various sectors, such as digital healthcare,
digital government, digital industrial management, d igital management, digital telecommunications
construction and digital grain depots, or for customi sed development specifically tailored for use in
various sector-specific Digitalisation Solution Services projects. Set out below are examples of the
core technologies developed and adopted by the Group as part of its research and developments
efforts:
Nature
Descriptions and potential
applications
Examples of projects undertaken
during the Track Record Period which
had applied the relevant technology
A real-time video
surveillance
analysis
technology
It deployed both cloud computing
monitoring technology and data analytics
for capturing real-time behavioural
characteristics of the monitored subjects
and conducting video analytics around
the clock. Using algorithms to recognise
any spatial or temporal events in video
data, it provides users with instant
responses as well as data report based
on defined criteria. This technology
could be applied to software solutions
focusing on digital urban management
sector.
 A digital surveillance project of
Customer A in Jiangxi Province which
relates to the ‘‘Public security
surveillance project in Honggutan
New District ’’,i . e .aM a j o rP r o j e c to f
the Group
(Note)
 A digital government project of
Customer B in Jiangxi Province which
relates to the ‘‘Digital city
management project (phase 1 –
operation) agreement in Qingshan
Lake District ’’,i . e .aM a j o rP r o j e c to f
the Group
(Note)
 A digital surveillance project of
Customer B in Jiangxi Province which
relates to the ‘‘Digital city
management project (phase 1 –
surveillance system integration
service) agreement ’’,i . e .aM a j o r
Project of the Group
(Note)
A city panorama
display system
It used integrated augmented reality
video linkage technology and tagging
and labelling technology to create a
three-dimensional monitoring system. It
provides multi-facet information in one
single visual display interface by linking
up the management system and other
third-party systems via IoT whereby
users can monitor the scene with
annotated information as well as spatial
positioning and attitude perception. This
technology could be applied to software
solutions focusing on digital urban
management sector.
 A digital surveillance project of
Customer A in Jiangxi Province which
relates to the ‘‘Public security
surveillance project in Honggutan
New District ’’,i . e .aM a j o rP r o j e c to f
the Group
(Note)
 A digital surveillance project of
Customer B in Jiangxi Province which
relates to the ‘‘Digital city
management project (phase 1 –
surveillance system integration
service) agreement ’’,i . e .aM a j o r
Project of the Group
(Note)
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Nature
Descriptions and potential
applications
Examples of projects undertaken
during the Track Record Period which
had applied the relevant technology
A big data
intelligent
analysis
technology
It could conduct trend analysis and
comparison analysis functions by
collecting, screening and analysing the
raw data generated from different
management and operational processes
within a hospital setting, thereby
improving the efficiency of managing the
institution as well as its resources
allocation. This technology could be
applied to software solutions focusing on
digital healthcare sector.
 A digital healthcare project of
Customer B in Jiangxi Province which
relates to the ‘‘Hospital intelligent
informatisation engineering project in
Linchuan District ’’,i . e .aM a j o rP r o j e c t
of the Group
(Note)
 A digital healthcare project of
Customer D in Jiangxi Province which
relates to a 5G distant medical
consultation and visualised data
platform procurement project for a
public hospital
A distant medical
consultation
analysis
technology
It actualised the multi-dimensional
statistical analysis and monitoring of the
information relating to number of
consultations undertaken, basic
information of patients, number of
doctors and hospitals involved, and level
of available medical resources. It
facilitated the continuing supervision and
refinement of the distant medical
consultation services, and enhancement
of the control and prevention of
infectious diseases. This technology
could be applied to software solutions
focusing on digital healthcare sector.
 A digital healthcare project of
Customer D in Jiangxi Province which
relates to a 5G distant medical
consultation and visualised data
platform procurement project for a
public hospital
Note: For further details of the Major Project, please refer to the paragraphs headed ‘‘Projects – Major Projects ’’ in this
section.
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The Directors believe that these technologies developed by the Group could be applied
and customised into various software systems inv olving cloud computing monitoring platforms,
discriminative AI data analysis systems, and blockchain data security systems which have broad
applications across multiple sector-specific technologies. For additional details relating to the
applications of the Group ’s self-developed software, please refer to the paragraphs headed
‘‘Principal services and business model – Digitalisation Solution Services ’’ in this section. With
the concerted efforts of the Group ’s in-house research and development team, together with the
third-party software programmers (if any), the Group had developed and registered over 120
software copyrights in the PRC as at the Latest Practicable Date. For details, please refer to the
paragraphs headed ‘‘B. Further information about the Group ’s business – 2. Intellectual property
rights of the Group ’’ in Appendix V to this prospectus. T o further strengthen its research and
development capabilities, the Group plans to de vote additional resources (including the
utilisation of net proceeds from the Global Off ering) in the year ending 31 December 2024 to
developing 5G-enabled digital technologies w ith two primary objectives: (i) broadening the
applicability of sector-specific dig ital technologies; and (ii) devel oping the underlying capability
of 5G-enabled cloud based technologies particularly on big data analytics and blockchain
technology. For details, please refer to the paragraphs headed "Business – Business strategies"
in this prospectus.
While some of the Group ’s self-developed software systems deployed in its Digitalisation
Solution Services projects may involve data collection including personal data, once the relevant
software systems are installed by the Group accepted by the customers, the Group would
generally have no access to the software systems save in the case of providing technical
support or system upgrade services. As conf irmed by the Directors, when accessing the
software systems for the purpose of providing te chnical support or system upgrade services, the
Group ’s customers would generally need to provide it with the relevant access code and the
Group ’sc u s t o m e r sw o u l db ea b l et om o n i t o rt h ea c t i v i t i e so ft h eG r o u pa n dt h ew o r k s
undertaken by the Group. As confirmed by the PRC Legal Advisers, the Group ’s relevant
business did not involve relevant laws and regulations in the PRC regarding data protection
during the Track Record Period.
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LICENSES AND QUALIFICATIONS
Pursuant to the relevant laws and regulations in the PRC, the Group is required to possess
certain requisite licenses, approvals and permits for conducting its business. Set out below are
details of the licenses, approvals and permits held by the Group as at the Latest Practicable
Date:
License/approval/permit Qualification type/license scope
License/approval/
permit holder Issuing authority/body Validity period
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
First Tier Communications Project
Implementation General Contracting
Enterprises Qualification*
（ 通信工程施工總承包 ）(Class 1)
Zhonggan Communication Ministry of Housing and Urban-
Rural Development of the
People ’s Republic of China* （ 中
華人民共和國住房和城鄉建設部 ）
17 May 2024 to
17 May 2029
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Professional contractor in electronics and
intelligence engineering works*
（ 電子與智能化工程專業承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
30 May 2024 to
30 May 2029
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Professional contractor in urban and road
lighting engineering works*
（ 城市及道路照明工程專業承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
17 May 2024 to
17 May 2029
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Professional contractor in environmental
protection engineering works*
（ 環保工程專業承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
17 May 2024 to
17 May 2029
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證
書 ） ........
Main contractor in power engineering
works* （ 電力工程施工總承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
2 April 2024 to
2 April 2025
(Note)
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Professional contractor in steel structure
construction works*
（ 鋼結構工程專業承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
2 April 2024 to
2 April 2025
(Note)
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Main contractor in general construction
works*（ 建築工程施工總承包 ）(Class 2)
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
2 April 2024 to
2 April 2025
(Note)
Qualification Certificate of
Construction Enterprise*
（ 建築業企業資質證書 ） ........
Filing of construction labour service
enterprise*
（ 施工勞務企業備案 ）
Zhonggan Communication Nanchang Municipal Housing and
Urban-Rural Development
Bureau* （ 南昌市住房和城鄉
建設局 ）
17 May 2024 to
17 May 2029
Work Safety License*
（ 安全生產許可證 ）...........
Building construction* （ 建築施工 ） Zhonggan Communication Department of Housing and Urban-
Rural Development of Jiangxi
Province*
（ 江西省住房和城鄉建設廳 ）
15 March 2024 to
15 March 2027
Jiangxi Province Security
Engineering Enterprise Design and
Construction Maintenance
Capability Certificate*
（ 江西省安防工程企業設計施工維護能
力證書 ）.................
Class 3 Zhonggan Communication Jiangxi Province Security
T echnology to Guard Against
Industry Association （ 江西省安全技
術防範行業協會 ）
14 September 2023
to 13 September
2026
BUSINESS
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License/approval/permit Qualification type/license scope
License/approval/
permit holder Issuing authority/body Validity period
Licenses for Undertaking Installation
(Repair, T esting) of Electric Power
Facilities*
（ 承裝（ 修、試 ）電力設施 ）許可證 ）...
Installation category, repair category, testing
category* （ 承裝類、承修類、承試類 ）
(Class 4)
Zhonggan Communication Central China Energy Regulatory
Bureau of National Energy
Administration of People ’s
Republic of China* （ 中華人民共和
國國家能源局華中監管局 ）
7 August 2023 to
6 August 2029
Engineering Design Qualification
Certificate*
（ 工程設計資質證書 ）..........
Electronic communication, radio and
television industry (wired communication,
wireless communication)* （ 電子通信廣電行
業（ 有線通信、無線通信 ）(Professional
grade B)
Zhonggan Communication Ministry of Housing and Urban-
Rural Development of the
People ’s Republic of China* （ 中
華人民共和國住房和城鄉建設部 ）
19 August 2021 to
19 August 2026
Note: The Group plans to file application to renew these certifica tes well in advance of their e xpiration. As confirmed by
the PRC Legal Advisers, there is no legal impediment for t he Group to renew these certificates as long as there is
no material change in the relevant laws and regulations and the Group complies with the relevant requirements.
As advised by the PRC Legal Advisers, the Group has obtained all requisite licenses,
approvals and permits from the relevant governmental authorities in the PRC that are material to
the Group ’s business and operations during the Track Record Period. Furthermore, such
licenses, approvals and permits remain valid as at the Latest Practicable Date and the Group
has not experienced any material difficulty in obtaining and/or renewing such licenses, approvals
and permits.
INTELLECTUAL PROPERTY
The Group had registered 25 trademarks and over 120 software copyrights and obtained
14 patents in the PRC which are or may be material to the Group ’sb u s i n e s sa sa tt h eL a t e s t
Practicable Date. For details of the Group ’s intellectual property rights, please refer to paragraph
headed ‘‘B. Further information about the Group ’s business – 2. Intellectual Property Rights of
the Group ’’in Appendix V to this prospectus.
During the Track Record Period and up to the Latest Practicable Date, the Group had not
received any claim against it for infringement of any intellectual property rights nor are the
Directors aware of any pending or threatened claims in relation to such infringements and the
Group had not made any claims against any third party with respect to the infringement of any
intellectual property rights owned by it.
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EMPLOYEES
The Directors consider that the employees of the Group are invaluable assets and one of
the key factors to its continued success. The Group has always used its best endeavours to
attract and retain the best talent and its approach is to enhance its employees ’ potential and
contribution to the Group through providing tr aining, competitive compensation and upward
mobility opportunities. As at the Latest Practicable Date, the Group employed a total of 252
employees, all of whom are located in the PRC, and no labour union has been established. The
following table sets out a breakdown of the Group ’s employee by function as at the Latest
Practicable Date:
Function
Number of
employees as
at the Latest
Practicable
Date
M a n a g e m e n t............................................... 1 6
E n g i n e e r i n ga n dt e c h n i c a l ...................................... 1 2 5
R e s e a r c ha n dd e v e l o p m e n t ..................................... 8 2
A d m i n i s t r a t i o n .............................................. 1 1
F i n a n c e ................................................... 9
Q u a l i t yc o n t r o l.............................................. 3
S a l e sa n dm a r k e t i n g .......................................... 6
Total ..................................................... 252
Employee recruitment and remuneration
The Group recruits personnel from open market, mainly based on the a range of factors,
including but not limited to their working experience, technical knowledge and educational
background. T o facilitate the recruitment of emp loyees, the Group strives to offer competitive
salaries and benefits to its employees and has policies in place to sure that the salaries and
bonuses of its employees are reviewed periodically and are competitive and in line with their
performances. Upon hiring of the relevant employee, the Group would enter into a standardised
employment contract with him or her which sets out the principal terms of their employment,
such as remuneration, duties, benefits, paid leaves and grounds for termination. In addition to
their basic remuneration as set out in the e mployment contract, it is also the Group ’sp o l i c yt o
reward employees in the form of bonuses which are given out from time-to-time. Furthermore, in
compliance with applicable statutory requirements in the PRC, the Group participates in social
insurance and the housing provident schemes in the PRC. The Directors confirm that, save as
disclosed in the paragraph headed ‘‘Legal proceedings and compliance ’’ in this section, the
Group was in material compliance of all applicable labour laws of the PRC during the Track
Record Period and up to the Latest Practicable Date.
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The Group is also an equal opportunity employer and it is the Group ’s policy to recruit
talented employees regardless of their gender, orientation, age, ethnicity, family status and any
other personal characteristics. As at the Latest Practicable Date, the Group ’se m p l o y e e s
comprised 192 males and 60 females. The Directors confirm that the Group did not encounter
any material difficulty in the recruitment and retention of its employees or experienced any
material disruption in its operations as a result of labour disputes during the Track Record
Period and up to the Latest Practicable Date.
During the Track Record Period and up to the Latest Practicable Date, the Group had
employed dispatched supporting staff including security guards, chefs and cleaners through an
employment agent. Pursuant to the labour dispatchment agreement, the Group would pay the
employment agent in accordance with the number of workers dispatched and the employment
agent would in turn pay wages to the dispatched workers. As advised by the PRC Legal
Advisers, the Group is not responsible for making contributions for social insurance or housing
provident funds for these dispatched workers under the applicable PRC laws and regulations. As
at the Latest Practicable Date, the Group had employed three dispatched workers, representing
less than 10% of the Group ’s total number of employees.
Employee training
The Group provides its new and existing emplo yees with relevant job training from time to
time which covers health and safety and operational procedures. Where there are new industry
regulations or the Group adopts or amends its policies and operating guidelines which its
employees are required to adhere to, it may also provide supplemental training to its employees.
Work safety
The Group ’s business and operations are subject to various labour and safety laws and
regulations in the PRC, for details, please refer to the section headed ‘‘Regulatory Overview ’’ in
this prospectus. The Group promotes occupational health and safety measures to ensure that it
is in compliance with all applicable laws and regul ations through establishing and implementing
workplace safety guidelines for its employees. Pursuant to the Group ’s occupational health and
safety measures it has formulated a series of guidelines and policies which details work safety
instructions and operating procedures, and has also employed work safety officers to coordinate
and manage all matters related to work safety, thereby strengthening the Group ’sa b i l i t yt o
ensure a safe working environment for its employees. Moreover, when labour suppliers are
involved, the Group will also require them to undertake and ensure that their workers will strictly
comply with the relevant industry related standards, laws and regulations in the PRC, and to
adhere with the Group ’s guidance and policies on work safety in the course of carrying out
construction works and other tasks for the Group ’s projects. When accidents do occur, it is the
Group ’s policy that it will be reported to the relevant department and handled accordingly.
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As advised by the PRC Legal Advisers, the Group was materially in compliance with the
relevant mandatory local and national occupational health and safety laws and regulations, and
no administrative penalty had been imposed on the Group by the relevant PRC authorities in
respect of non-compliance with the relevant local and national occupational health and safety
laws and regulations in the PRC during the Track Record Period and up to the Latest
Practicable Date. There was one fatal accident involving an employee of the Group during the
Track Record Period. The following table sets out the details of the accident:
Accident
date Particulars of accident
Relationship between
the deceased and
the Group Status
1 June 2020 While leaving from work, the
deceased sustained a collision
with a vehicle and died.
The Group ’s employee Settled and fully
covered by
insurance
The Directors confirm that, save as disclosed above, during the Track Record Period and
up to the Latest Practicable Date, the Group did not have any material accidents and fatalities
involving the Group ’s employees, and the Group has not been subject to any material fines,
public criticism or warnings in relation to any safety incidents.
INVENTORY CONTROL
The Group ’s inventory primarily consists of hardware and software to be used mainly in its
Digitalisation Solution Services projects. Typically, the Group ’s project team will plan ahead for
the delivery schedule and place purchase order with its hardware and software suppliers after
securing a project. If the Group is responsible for the procurement of ancillary construction
materials for a particular project, the Group will require its labour suppliers to provide such
ancillary construction material s when placing work orders with them, who would t hen arrange for
the delivery of the materials to the customers ’ storage facilities or the work sites directly. No
provision has been made nor required to be made for the Group ’s inventory during the Track
Record Period.
QUALITY CONTROL
The Group places a strong commitment towards delivering quality service and believes that
such a commitment has been an essential element to its continued success as such it has
established a stringent system of quality control policies and procedures for the projects
undertaken by it. As at the Latest Practicable Date, the Group ’s quality control team comprised
three employees. The Group would also assign designated project managers to monitor the
quality of works in relation to its T elecommunications Infrastructure Services projects.
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T o ensure all works are carried out and completed in accordance with the contract
requirements, the Group ’s project management team conducts regular meetings with customers
to address their requests and concerns. The project management team also conducts regular
on-site inspections on the progress and quality of the work completed by the Group and its
labour suppliers and other service suppliers, arrange for remedial works if necessary and
reports to the Group ’s management on a regular basis. T o achieve consistency in the work
quality, standardised construction techniques and procedures are generally adopted by the
Group across its projects. Periodic trainings are also provided to the Group ’s employees with a
view to maintaining the quality of their work.
A s i d ef r o me n s u r i n gt h eq u a l i t yo fi t sw o r k s ,t h eG r o u p’s quality control policies and
procedures also encompass ancillary construction materials, hardware and third-party software
sourcing. If the Group is required to procure ancillary construction materials, equipment or
software for its projects, it is required to source on ly materials, equipment and software that fulfil
the contract specifications from approved suppliers or suppliers designated by its customers.
Further, the materials will be inspected or tested upon delivery to ensure they comply with the
contract requirements. Ancillary construction materials, hardware and software supplied by the
Group ’s labour suppliers and hardware and software suppliers will also be inspected or tested
by the Group upon delivery to ensure the contract requirements are satisfied.
In recognition of the Group ’s efforts in maintain effective quality control systems, its quality
management system was awarded with GB/T 19001-2016/ISO 9001: 2015 certification. Further,
as confirmed by the Directors, the Group did not experience any material quality issues or
receive any material complaints in relation to the quality of work done and services rendered by
the Group during the Track Record Period and up to the Latest Practicable Date.
AWARDS, RECOGNITIONS AND CERTIFICATIONS
Set out below are the major awards, recognitions and certifications the Group received/
possessed during the Track Record Period:
Year of
issuance Award/recognition Awarding/authorising body
2 0 1 8 ....... H i g ha n dN e wT e c h n o l o g yE n t e r p r i s eC e r t i f i c a t e * （ 高新技術企業證
書 ）for Zhonggan Communication
Science and T echnology Department of Jiangxi
Province* （ 江 西 省 科 學 技 術 廳 ）, Jiangxi Provincial
Finance Department* （ 江 西 省 財 政 廳 ）and Jiangxi
Provincial Bureau of Local T ax of the State T axation
Administration* （ 國家稅務總局江西省稅務局 ）
2 0 2 0 ....... C e r t i f i c a t eo fE n t e r p r i s eC r e d i tG r a d e * （ 企業信用等級證書 ） China International Electronic Commerce Center （ 中國
國際電子商務中心 ）, China National Credit Information
Service Co., Ltd. （ 北京國富泰信用管理有限公司 ）
2 0 2 0 ....... E x c e l l e n tC o o p e r a t i o nU n i t f o rE n g i n e e r i n gC o n s t r u c t i o ni nY e a r
2019*（ 2019 年度工程建設
優秀合作單位 ）
A branch office of a subsidiary of Customer A
2 0 2 0 ....... H i g ha n dN e wT e c h n o l o g yE n t e r p r i s eC e r t i f i c a t e * （ 高新技術企業證
書 ）for GLP T echnology
Science and T echnology Department of Jiangxi
Province* （ 江 西 省 科 學 技 術 廳 ）, Jiangxi Provincial
Finance Department* （ 江 西 省 財 政 廳 ）and Jiangxi
Provincial Bureau of Local T ax of the State T axation
Administration* （ 國家稅務總局江西省稅務局 ）
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Year of
issuance Award/recognition Awarding/authorising body
2 0 2 1 ....... N a n c h a n gH i g h - T e c hI n d u s t r i a lD e v e l o p m e n tZ o n e – Outstanding
Contribution Enterprise of the Park in Year 2020* （ 2020 年度南昌
高新技術產業開發區– 園區突出貢獻企業 ）
Nanchang High-T ech Industrial Development Zone
Management Committee of the Working Committee of
Nanchang High-T ech Industrial Development Zone of
the Communist Party of China* （ 中共南昌高新技術產業
開發區工委南昌高新技術產業開發區管理委員會 ）
2 0 2 1 ....... H i g ha n dN e wT e c h n o l o g yE n t e r p r i s eC e r t i f i c a t e * （ 高新技術企業證
書 ）for Zhonggan Communication
Science and T echnology Department of Jiangxi
Province* （ 江 西 省 科 學 技 術 廳 ）, Jiangxi Provincial
Finance Department* （ 江 西 省 財 政 廳 ）and Jiangxi
Provincial Bureau of Local T ax of the State T axation
Administration* （ 國家稅務總局江西省稅務局 ）
2 0 2 1 ....... S A 8 0 0 0 : 2 0 1 4 C o r p o r a t e S o c i a l R e s p o n s i b i l i t y M a n a g e m e n t
System Certificate* （ 企業社會責任管理體系認證證書 ）
Zhongtian Hongtu International Certification Co., Ltd.*
（ 中天鴻圖國際認證有限公司 ）
2 0 2 2 ....... G B / T 1 9 0 0 1 - 2 0 1 6 / I S O 9 0 0 1 : 2 0 1 5 Q u a l i t y M a n a g e m e n t S y s t e m
Certificate* （ 質量管理體系認證證 書 ）for security engineering
construction, maintenance, communication engineering, power
engineering, electronic and intelligent engineering construction
China Quality Mark Certification Group Co., Ltd.*
（ 方圓標誌認證集團有限公司 ）
2 0 2 2 ....... G B / T 2 4 0 0 1 - 2 0 1 6 / I S O 1 4 0 0 1 : 2 0 1 5 E n v i r o n m e n t a l M a n a g e m e n t
System Certificate* （ 環境管理體系認證證 書 ）for communication
engineering, power engineering, electronic and intelligent
engineering construction, security engineering construction,
maintenance and related management activities
China Quality Mark Certification Group Co., Ltd.*
（ 方圓標誌認證
集團有限公司 ）
2 0 2 2 ....... G B / T 4 5 0 0 1 - 2 0 2 0 / I S O 4 5 0 0 1 : 2 0 1 8 O c c u p a t i o n a l H e a l t h a n d
Safety Management Systems Certificate* （ 職業健康安全管理體系
認證證書 ）for communication engineering, power engineering,
electronic and intelligent engineering construction, security
engineering construction, maintenance and related management
activities
China Quality Mark Certification Group Co., Ltd.*
（ 方圓標誌認證集團有限公司 ）
2 0 2 3 ....... S o f t w a r eE n t e r p r i s eC e r t i f i c a t e * （ 軟件企業證書 ）for GLP Software China Software Industry Association （ 中國軟件行業協會 ）
2 0 2 3 ....... S o f t w a r eP r o d u c tC e r t i f i c a t e * （ 軟件產品證書 ）for GLP Software China Software Industry Association （ 中國軟件行業協會)
2 0 2 3 ....... H i g ha n dN e wT e c h n o l o g yE n t e r p r i s eC e r t i f i c a t e * （ 高新技術企業證
書 ）for GLP T echnology
Science and T echnology Department of Jiangxi
Province* （ 江 西 省 科 學 技 術 廳 ）, Jiangxi Provincial
Finance Department* （ 江 西 省 財 政 廳 ）and Jiangxi
Provincial Bureau of Local T ax of the State T axation
Administration* （ 國家稅務總局江西省稅務局 ）
2 0 2 3 ....... ‘‘Specialised Small and Medium-sized Enterprise ’’ in Jiangxi
Province in 2023* （ 2023 年 江 西 省 ‘‘專 精 特 新 ’’中 小 企 業 ）for
Zhonggan Communication
Jiangxi Provincial Industrial and Information
Department*（ 江西省工業和信息化廳 ）
2 0 2 3 ....... ‘‘Specialised Small and Medium-sized Enterprise ’’ in Jiangxi
Province in 2023* （ 2023 年江西省‘‘專精特新’’中小企業 ）for GLP
T echnology
Jiangxi Provincial Industrial and Information
Department*（ 江西省工業和信息化廳 ）
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MARKET COMPETITION
According to the Ipsos Report, the market value of the T elecommunications Infrastructure
Services industry in the PRC grew at a CAGR of approximately 5.7% from 2019 to 2023 and is
expected to grow at a CAGR of approximately 5.5% from 2024 to 2028 while the market value of
the Digitalisation Solution Services industry in the PRC grew at a CAGR of approximately 12.1%
from 2019 to 2023 and is also expected to grow at a CAGR of approximately 9.0% from 2024 to
2028. The continuous growth in the telecommunications infrastructure services industry and the
digitalisation solution services industry in the PRC will be driven by government policies in
particular The 14th Five-Year Plan for National Informatisation* （ ‘‘十四五’’國家信息化規劃 ）.T h e
14th Five-Year Plan for National Informatisation in China is expected to have a significant
impact on both the development of telecommunications infrastructure services industry and
digitalisation solutions industry in the PRC. For the telecommunications infrastructure services
business, the plan emphasises the need to accelerate the development of 5G networks and
other advanced telecommunications technologies. This will require significant investment in the
telecommunications infrastructure, including the deployment of more base stations and fiber-
optic cables to support the increased demand for data transmission and communication. This
will create opportunities for businesses involved in the construction, operation, and maintenance
of telecommunications infrastructure. For the digitalisation solutions business, the plan
emphasises the need to promote the development of smart cities and the integration of
information technology with urban infrastructure. This will create opportunities for businesses
involved in the design, development, and implementation of digitalisation solutions, such as
sensors, data analytics, and other related technologies. The plan also emphasises the need to
promote the digital transformation of traditional industries, which will increase the demand for
digitalisation solutions. As more businesses adopt digital technologies, they will require solutions
that integrate with their existing infrastructure and provide real-time data analysis and insights.
Despite the ample demand for T elecommun ications Infrastructure Services and
Digitalisation Solution Services in the PRC, multiple entry barriers prevent the rise of new
market players. According to the Ipsos Report, there are multiple entry barriers in the
telecommunications infrastructu re services industry which include (i) a strong capital position as
a typical project involves significant upfront commitment of resources and capital and as the
payment process can be lengthy and delays may occur, (ii) a proven track record as market
players are required to demonstrate their competence and experience in the field during the
tender process and (iii) licenses that are the prerequisites for a company to participate in the
projects of the key market players in the telecommunications infrastructure services industry. For
the digitalisation solution services industry, the entry barriers include (i) high cost of investment
to enhance technologies, develop innovative solutions, train IT talents and obtain intellectual
property and (ii) talent competition for technical talents to conduct research and development of
new solutions that meet users ’ needs. While this may be the case, the telecommunications
infrastructure services industry is also highly fragmented and with approximately 353 companies
that possess the First Tier Communications Pr oject Implementation General Contracting
Enterprises Qualification* （ 通信工程施工總承包（ 一級 ））in 2022. Similarly, the digitalisation
solution services industry is also highly fragmented with top players dominating in different
provinces. Accordingly, the individual strengths of the integrated service provider is paramount
in determining its ability to captu re business opportuni ties and the Directors believe that given
the Group ’s competitive strengths which are set out in ‘‘Competitive strengths ’’ in this section,
the Group will be able to distinguish itself from its competitors and capture new business
opportunities.
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ENVIRONMENT , SOCIETY AND GOVERNANCE
The Board has the collective and overall responsibility for establishing, adopting and
reviewing the ESG strategies and target of the Group, identifying the key performance indicators
and the relevant measurements and evaluating, determining and addressing our ESG-related
risks in accordance with Appendix C2 to the Listing Rules, together with other applicable
recommendations from the Stock Exchange. The Board will assess, evaluate the ESG risks and
review the Group ’s existing strategy, target and internal controls. If necessary, improvement will
be implemented to mitigate the risks that are material to the Group ’s business operation and
Shareholders from time to time. After the Listing, the Group will publish an ESG report annually
in accordance with Appendix C2 to the Listing Rules to qualitatively and quantitatively analyse
and disclose important ESG matters, risk management and the accomplishment of key
performance objectively.
Environmental matters
The Group is subject to a number of environmental laws and regulations in the PRC
including among others, the Law of the PRC on Environmental Protection （《中華人民共和國環境
保護法》）; the Law of the PRC on Prevention and Control of Air Pollution （《中華人民共和國大氣污
染防治法》）; the Law of the PRC on Prevention and Control of Environmental Noise Pollution
（《中華人民共和國環境噪聲污染防治法》）; the Law of the PRC on the Prevention and Control of
Water Pollution （《中華人民共和國水污染防治法》）; and the Law of the PRC on the Prevention
and Control of Environmental Pollution by Solid Waste （《中華人民共和國固體廢物污染環境防治
法》）. As confirmed by the PRC Legal Advisers, during the Track Record Period and up to the
Latest Practicable Date, the Group was in compliance all relevant environmental laws and
regulations in the PRC in all material respects.
The Group ’s core business encompasses T elecommunications Infrastructure Services and
Digitalisation Solution Services. Within T elecommunications Infrastructure Services, the Group
provides Infrastructure Construction Serv ices and Infrastructure Maintenance Services.
Digitalisation Solution Services provided by the Group include Integrated Solution Services,
System Maintenance Services, and Software Sol ution Services. Infrastructure Construction
Services involve construction, adaptation, and installation works such as base station and
auxiliary facilities engineering services, powe r grid connection services, cable installation
services, access network related services and wire less network equipment installation services.
These labour-intensive activities are primarily executed through labour services provided by
labour suppliers and utilising e quipment provided by customer s, such as telecommunications
and wireless devices. The laying of network cables primarily occurs within existing underground
electrical conduit pathways, avoiding the need for road excavation or construction works.
Infrastructure Maintenance Ser vices primarily involve carryin g out routine basic maintenance,
repairs and restoration works and emergency trouble shooting to the telecommunications
infrastructure located across rural and urban are as in the PRC. Digitalisation Solution Services
are primarily delivered by the Group ’s employees, who develop customised solutions tailored to
customer requirements and specific circumstances.
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Given the nature of the Group ’s core business activities described above, it heavily relies
on manpower, telecommunications equipment provided by customers and ancillary construction
materials provided by labour suppliers to deliver the Group ’s services. Going forward, the
Directors do not anticipate that the Group will need to incur any significant costs relating to
compliance with any applicable environmental protection rules and regulations in the PRC.
Nevertheless, the Group recognises the importance of environment conservation and
strives to minimise its environmental impact for example by encouraging its employees to use
public transport where possible, reduce the use of water, use daylight where possible, use
energy efficient appliances and avoid printing hard copies to the extent possible. In 2022, the
Group obtained the GB/T 24001-2016/ISO 14001: 2015 (Environmental Management Systems)
certification which is a testament to its effor ts in promoting environmentally friendly and
sustainable business practices.
ESG and climate related key performance indicators
The Group has assessed quantitative information that reflects its management of ESG-
related risks, which includes greenhouse gas emission and resource consumption. Greenhouse
gas emissions consists of Scope 1, Scope 2 and Scope 3 emissions. Scope 1 direct emissions
include the greenhouse gas emissions from the Group ’s vehicles, Scope 2 indirect emissions
include greenhouse gas emissions from the consumption of electricity. Scope 3 other indirect
emissions include the greenhouse gas emissions from freshwater and sewage processing,
paper waste disposal at landfills, and busine ss air travel. The following table sets out an
analysis of the Group ’s greenhouse gas emissions:
Year ended 31 December
Emission sources 2021 2022 2023
(tonnes) (tonnes) (tonnes)
S c o p e1( d i r e c te m i s s i o n s ).................. 7 . 7 5 . 2 3 . 0
S c o p e2( i n d i r e c te m i s s i o n s ) ................. 3 9 7 . 0 3 9 3 . 1 3 8 5 . 5
Scope 3 (other indirect emissions)
– Paper waste disposed at landfills .......... 1 3 . 4 8 . 8 4 . 7
– Electricity used for processing fresh water and
sewage ............................ 5 . 3 4 . 2 4 . 6
– Business air travel by employees .......... 8 . 8 1 0 . 4 2 0 . 6
Looking ahead, the Group is committed to minimising its greenhouse gas emissions to
reduce its environmental impact. T o decrease direct emissions resulting from vehicle usage, the
Group consistently encourages emp loyees to utilise public transporta tion instead of utilising self-
owned vehicles. Furthermore, the Group anticipates replacing 1 to 2 of the current gasoline and
diesel vehicles with new energy vehicles by 2026, thereby reducing associated emissions. For
indirect emissions, in order to reduce greenhouse gas emissions from consumption of electricity,
the Group has implemented feasible measures to reduce consumption of electricity. The Group
has placed signage in offices to remind employees to switch off unused appliances such as air
conditioning and lighting systems. Office corridors and windows are designed to maximise
natural lighting, and energy-efficient appliances are prioritised in office settings, aiming to
reduce power usage from all aspects. The Grou p also encourages employees to utilise power-
saving modes for their computers, automatically transitioning to standby mode when not in use,
thus reducing electricity consumption.
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Additionally, in July 2023, the Group installed a new air-conditioning control system for the
office located at its headquarter in Nanchang City. This system enables centralised control over
the temperature settings, allowing the Group to efficiently manage power consumption and
prevent electricity wastage caused by excessively low air-conditioning temperatures. T o ensure
effective monitoring of electricity usage, the Group ’s administration team is responsible for
setting the electricity consumption budget and conducting monthly comparative analyses of
actual consumption against the budget. This ongoing monitoring will help the Group identify any
instances of excessive electricity usage, which will be reported to the Group ’s management
team from time to time. Furthermore, the admi nistration team will also inspect the Group ’s
offices regularly to identify and address any instances of excessive or wasteful electricity
consumption.
Further, the Group has also implemented feasible measures to reduce other indirect
emissions. T o address paper w aste disposal at landfills, r ecycling programs have been
implemented by the Group, motivating employees to deposit waste paper in designated
recycling bins. T o decrease electricity usage in water and sewage processing, employees are
encouraged to conserve water when using restroom facilities. Regular inspections of faucets by
administrative staff to ensure there are no leakages causing water waste. Lastly, to reduce
business air travel by employees, the Group encourages the use of video conferencing and
online collaboration tools as alternatives, thereby reducing the need for physical business travel.
The Group will continue promoting resource conservation among its employees and
implementing the abovementioned measures to improve and reduce greenhouse gas emissions.
The Group aims to reduce its total greenhouse gas emissions consisting Scope 1, Scope 2 and
Scope 3 emissions (with Scope 2 indirect emissions being the primary contributor) by 3% by the
end of 2026 as compared to the emission level in 2022.
The following table sets out an analysis of the Group ’s resource consumption:
Year ended 31 December
2 0 2 12 0 2 22 0 2 3
E n e r g yc o n s u m p t i o n( k i l o w a t t ) .................... 7 1 1 , 9 3 6 7 0 8 , 4 4 3 6 8 7 , 5 0 8
W a t e rc o n s u m p t i o n( c u b i cm e t e r ) .................. 8 , 2 9 4 6 , 6 5 1 7 , 2 1 3
As previously stated, the Group actively promotes energy conservation, particularly in
relation to electricity consumption. This is achieved through using signage, maximising natural
lighting, prioritising energy-efficient applianc es, and encouraging power-saving modes. Although
fluctuations in energy consumption are inevitable with the Group ’s business growth and
development, the Group will continue promoting the virtue of energy conservation among
employees. Additionally, the Group will monitor office electricity usage consistently during
operations. By implementing the aforementioned measures consistently, the Group aims to
reduce energy consumption by 3% by the end of 2026 as compared to the consumption level in
2022.
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In terms of reducing water consumption, as previously stated, the Group encourages
employees to conserve water when using restroom facilities and conducts regular inspections of
faucets to ensure there are no leakages that could result in water waste. During the Track
Record Period, the Group did not encounter any material issues concerning the availability of
water supply, as it is sourced from the water department of government. Looking ahead, the
Group will continue to encourage employees to conserve water and minimise wastage. By
implementing the aforementioned measures consistently, the Group aims to reduce water
resource usage by 3% by the end of 2026 as compared to the consumption level in 2022.
After the Listing, the Group will continue to adhere to the relevant regulations and laws
while striving to decrease its greenhouse gas emissions and resource consumption.
T o effectively address environmental risks along the supply chain, the Group has
implemented rigorous quality requirements and standards when selecting suppliers. For labour
suppliers, strict adherence to relevant environmental standards and regulations is a mandatory
criterion. Further, the Group prioritises hardware and software suppliers who have obtained
recognised environmental certifications to d emonstrate a strong commitment to sustainable
practices and strictly requires hardware and software suppliers to comply with relevant
environmental standards and regulations. Moreover, the Group emphasises transparency and
information sharing to effectively manage environmental risks across the supply chain. Open
communication is encouraged among suppliers regarding their environmental practices and
regulatory updates. This collaborative approach fosters a collective effort towards sustainability.
By promoting transparency, the Group ensures suppliers are well-informed and empowered to
make environmentally responsible decisions . By prioritising suppliers that align with
environmental values and promoting transparency, the Group actively manages and mitigates
environmental risks.
While the business operations of the Group do not involve environmentally friendly
products and services, the Group still places a strong emphasis on environmental responsibility.
As mentioned above, the Group strictly requires labour suppliers and hardware and software
suppliers to comply with relevant environmental standards and regulations to strive for resource
conservation and reduction of greenhouse gas emissions.
Social matters
The Group places strong emphasis on promoting diversity and treating all its employees
equally with regards to their recruiting, tr aining, promotion, professional and personal
development and strive to achieve a fair workplace where all employees are treated fairly and
protect them from any discrimination of gender, o rientation, age, ethnicity, family status or any
other personal characteristics. Further, promotion within the Group would be based solely on the
employee ’s performance, experience and capability. For details, please refer to the paragraph
headed ‘‘Employee ’’in this section. As for board diversity, please refer to the paragraph headed
‘‘Directors and senior management – Board diversity policy ’’in this prospectus.
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The Group actively evaluates existing and potential labor suppliers and hardware and
software suppliers with the purpose of ensuring ethical and responsible practices throughout its
supply chain. By thoroughly assessing suppliers ’ compliance with labour laws, safe working
conditions, and non-discrimination policies, the Group aims to create a fair and inclusive
workplace environment. The evaluation process also serves to mitigate social risks and promote
sustainability within the supply chain. Through these assessments, the Group strives to select
suppliers who uphold fair and ethical practices, aligning with its commitment to responsible
business conduct.
T h eG r o u pi sc o m m i t t e dt og i v i n gb a c kt ot h es o c iety. In addition to ma intaining a safe and
sustainable operations environment, the Group actively embodies its core values of serving the
social community. During the Track Record Period, the Group contributed approximately RMB0.5
million in aggregate to different governmental b odies and charitable foundations in the PRC as
donations to support various poverty relief activities and rural revitalisation projects and as
sponsorships for students from low-income families. Furthermore, in August 2022, the Group
participated in a voluntary activity organised by the local government in celebration and
recognition of the contributions of the local firefighters, during which the Group ’s representatives
delivered daily supplies to the local firefighters as a gesture of appreciation and support. The
Group will continue to devote resources to various educational, cultural and social welfare
charitable initiatives, demonstrating its commitment to being a resp onsible corporate.
INSURANCE
During the Track Record Period, the Group maintained insurance that covered property,
motor vehicle and workers compensation. However, the Group did not obtain any business
interruption or litigation insurance policies, which are not mandatory according to the laws and
regulations of the PRC. The Directors consider that the existing insurance coverage is in line
with industry norms and is sufficient for the Group ’s present operations. As confirmed by the
PRC Legal Advisers, save for the failure of Zhonggan Communication, the Shanghai and
Guizhou branch offices of Zhonggan Communications and GLP T echnology to make full
contribution to the social insurance and housing provident funds for some of its employees as
disclosed in the paragraph headed ‘‘Legal proceedings and compliance ’’ in this section, the
Group had duly maintained all insurance policies in compliance with the relevant PRC laws and
regulations. Please refer to the section headed ‘‘Risk Factors – Risks relating to the Group ’s
business – The Group ’s insurance coverage may not be sufficient to cover all losses or potential
claims which would affect the Group ’s business, financial condition and results of operations ’’in
this prospectus for more details. Save for the fatal incident as disclosed in the paragraph
headed ‘‘Employees – Work safety ’’ in this section, the Directors confirm that during the Track
Record Period and up to the Latest Practicable Date, no material claims had been made against
the Group ’s insurance policies.
For the years ended 31 December 2021, 2022 and 2023, the Groups ’ insurance expenses
(excluding social insurance and housing provident fund contributions) were approximately
RMB351,000, RMB327,000 and RMB227,000, respectively.
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PROPERTIES
Owned Property
The Group, through GLP T echnology, owns 28 units located at No.2301-2328, 23/F , 2#
Office Building, Landmark Comme rcial Plaza, No.169 Qianhu Avenue, Honggutan New District,
Nanchang City, Jiangxi Province, the PRC. The total gross floor area of these units is 1371.08
sq.m. As at the Latest Practicable Date, the Group has obtained the valid ownership certificates
for the units. The Group is intended to use the units as offices.
The Group, through Zhonggan Communication, owned one building located at Block 99,
2799 Tianxiang Avenue, Nanchang Jiahai Indus trial Park, Nanchang High-tech Industrial
Development Zone, Nanchang City, Jiangxi Province, the PRC. The gross floor area of this
building is 12,569.06 sq.m.. As at the Latest Pra cticable Date, the Group has obtained the valid
building ownership certificate for the build ing issued by the Nanchang City Real Estate
Registration Bureau （ 南昌市不動產登記局 ）. While the approved use of the owned property is
industrial, the actual uses of the property were for ancillary uses with integrated functions of
training and hospitality. According to the relevant PRC laws and regulations, Zhonggan
Communication might be ordered to rectify the unapproved use of the owned property by the
competent authorities and if it fails to rectify within a prescribed period, Zhonggan
Communication may be subject to a maximum potential penalty of RMB200,000. As advised by
the PRC Legal Advisers, given that (i) the abovementioned actual uses of the Group ’so w n e d
property were approved in the work conferences of the Office of the Management Committee of
the Chinese Communist Party Working Committee of Nanchang High-T ech Zone* （ 南昌高新區黨
工委管委會辦公室 ）(the ‘‘Nanchang High-Tech Zone Management Committee ’’) in November
2017 and May 2021, respectively, and (ii) the Group has obtained the written confirmation letters
dated 16 March 2023 and 25 January 2024 from the High-tech Branch of the Nanchang Natural
Resources and Planning Bureau (the ‘‘Bureau ’’), which is a competent authority, confirming that
Zhonggan Communication were not penalised by the Bureau from 1 January 2020 to 25 January
2024, and (iii) the Group has also obtained a written confirmation dated 1 February 2024 from
the Management Committee of the Urban and Rural Construction Bureau of Nanchang High-tech
Industrial Development Zone （ 南昌高新技術產業開發區管理委員會城鄉建設局 ）,w h i c hi sa
competent authority, confirming that Zhonggan Communication was not in violation of the
relevant laws and regulations relating to housing construction, the risk of Zhonggan
Communication being fined for the non-compliance with the approved use of the self-owned
property is remote. Further, the Controlling Shareholders have undertaken to fully indemnity the
Group all claims, losses, liabilit ies, damages, costs, charges, fees, expenses and fines incurred
by the Group as a result of such non-compliance.
Zhonggan Communication has entered into five lease agreements to lease out part of its
self-owned property. Among the five lease agreements, four were entered into with its
subsidiaries namely GLP T echnology, GLP Software, Gantong Jiangxi and Jiangxi Zhongge,
and the remaining one was entered into with an Independent Third Party. As confirmed by the
PRC Legal Advisers, the abovementioned lease agreements are in compliance with the relevant
laws and regulations.
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Pursuant to Rules 5.01A(1) and 5.01B(1) of the Listing Rules, if the carrying amount (as
defined in Rule 5.01(1) of the Listing Rules) of a property interest (as defined in Rule 5.01(3) of
the Listing Rules) that forms part of property act ivities (as defined in Rule 5.01(2) of the Listing
Rules) is or is above 1% of its total assets (as defined in Rule 5.01(4) of the Listing Rules), the
prospectus must include the full text of a valuation report for such property interest. As at 31
December 2023, being the date of which the most recent audited consolidated statements of the
financial position of the Group, the carrying amount of its property interest that formed part of its
property activities was or was above 1% of its total assets. Thus, a property valuation report in
respect of the Group ’s owned property is included in this prospectus. For further details of the
Group ’s owned property, please refer to the property valuation report issued by HG Appraisal &
Consulting Limited, the text of which is set out in Appendix III to this prospectus.
Leased Properties
As at the Latest Practicable Date, the Group leased four properties in the PRC with an
aggregated lease area of approximately 2,512 sq.m. for use primarily as offices. All leased
properties are leased from Independent Third Parties.
Failure to file lease agreements with the loc al housing administration authorities
The lease agreement of one of the abovementioned leased properties had not been filed
with the local housing administration authorities by the Group and the lessor jointly during the
Track Record Period as required under the applicable PRC law, primarily due to the handling
personnel, who was responsible for property leasing of the Group, being unfamiliar with the
relevant regulatory requirements. As advised by the PRC Legal Advisers, failure to file the lease
agreement would not affect the validity of such lease agreement. According to the relevant PRC
laws and regulations, the Group might be ordered to rectify this failure by the competent
authorities and if it fails to rectify within a prescribed period, a penalty of RMB1,000 to
RMB10,000 per agreement may be imposed on it as a result. As such, the estimated maximum
potential penalties that might be imposed on Zhonggan Communication, in the absence of
rectification, would amount to RMB10,000 for the above non-filing incident. Upon discovery of
such non-filing incident, the Group took immedi ate action to rectify the situation by promptly
completing the required filing with the local housi ng administration authority. As confirmed by the
PRC Legal Advisers, the filing of the lease agreement has been properly completed as at the
Latest Practicable Date.
As at the Latest Practicable Date, the Group had not received any notice from the relevant
regulatory authority with respect to potential administrative penalties or enforcement actions as
a result of its prior failure to file the lease agreements described above. Meanwhile, as at the
Latest Practicable Date, th e filings of these two lease agr eements have been properly
completed. Based on the above, the PRC Legal Advisers, are of the view that the risk of the
Group being fined is remote. Further, the Controlling Shareholders have undertaken to fully
indemnify the Group all claims, losses, liabiliti es, damages, costs, charges, fees, and expenses
incurred by the Group as a result of such non-compliance.
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LEGAL PROCEEDINGS AND COMPLIANCE
As at the Latest Practicable Date, the Group was not engaged in any material litigation,
arbitration or claim and as confirmed by the Directors no material litigation, arbitration or claim is
pending or threatened by or against the Group that would have a material adverse effect on its
results of operations or financial condition. The Directors confirm that the Group had not been
involved in any non-compliance matters which had or may have a material adverse effect on its
results of operations or financial conditions during the Track Record Period and up to the Latest
Practicable Date, save for the following:
Financing Arrangement
Details of non-compliance
In 2019 and 2020, Zhonggan Communication entered into 11 bank loan agreements for
procurement purpose with the Jiangxi Provincial Branch of Bank of Communications Co.,
Limited and Nanchang Xihu Branch of China Construction Bank Corporation (collectively the
‘‘Lending Banks ’’), respectively. According to these agreements, the Lending Banks were
directed to release loans in Scenario 1 and Scenario 2 discussed below (collectively the
‘‘Financing Arrangement ’’). Pursuant to the relevant bank loan agreements, the terms included
a loan term of one year, an interest rate linked to the China Loan Prime Rate set by the People ’s
Bank of China plus an additional basis point determined by the Lending Banks, and a repayment
structure which provided for repayment of the principal at the end of the loan term, with monthly
interest payments. The Directors are of the view that the relevant bank loan agreements were
entered into on normal commercia l terms taking into account tha t the comparability of the terms
with other bank loans of similar size prevailing during the relevant period.
The Financing Arrangement involved Channeling Party A and Channeling Party B. As
confirmed by the Directors, both Channeling Party A and Channeling Party B do not have any
past or present relationship (including famil y, employment, business and financing) with
Zhonggan Communication or its subsidiarie s, their shareholders, directors or senior
management, or any of their respective associates, apart from the Financing Arrangement.
Details of these two scenarios are set out as follows:
Scenario 1
Channeling Party A, a private company established in March 2016 and based in Jiangxi
Province with a registered share capital of RMB5.0 million, was principally engaged in the
provision of labour services. Channeling Party A was deregistered in 25 August 2021. Before its
deregistration, Channeling Party A provided labour services to telecommunications infrastructure
construction companies. The sole shareholder of Channeling Party A, an Independent Third
Party, maintained a longstanding personal relationship with the Controlling Shareholder, Mr. Liu
Haoqiong. Mr. Liu Haoqiong has been in a friendly relationship with the sole shareholder of
Channeling Party A for many years. In 2019, with the aim of diversifying the Group ’s supplier
selection, Zhonggan Communication started collaboration with Channeling Party A by engaging
them as a labour supplier for the Group ’s T elecommunications Infrastructure Services business
segment.
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In the same year, the Group was awarded contracts for several T elecommunications
Infrastructure Services projects. Subsequently, Zhonggan Communication and Channeling Party
A entered into several procureme nt agreements relating to the provision of labour services for
these projects. In order to bolster Zhonggan Communication ’s liquidity for executing these
projects, Zhonggan Communication applied to the Lending Banks for bank loans based on the
procurement agreements with Channeling Party A. Consequently, the Lending Banks released
the loan proceeds to Channeling Party A through entrusted payment arrangements. The
expected contract sum of labour services to be procured by the Group from Channeling Party A
as stipulated in the relevant procurement agre ements was approximate ly RMB292.0 million. The
amount of which was larger than the loan proceeds obtained from the Lending Bank through
entrusted payment in the amount of approxima tely RMB291.1 million. At that time, the Group
recorded the loan proceeds held by Channeling Party A as a prepayment in its financial
statements. Due to financial resources management purposes, Channeling Party A transferred
back the loan proceeds to Zhonggan Communication, and Zhonggan Communication would then
apply the proceeds to settle its trade payables to Channeling Party A as they became due. Upon
remittance of the loan proceeds by Channeling Party A to Zhonggan Communication, the
prepayment was credited, and cash and cash equivalents were debited by Zhonggan
Communication in its fi nancial statements.
However, due to the outbreak of the COVID-19 pandemic in the PRC, the customers did
not place any work order in relation to the projects and therefore Zhonggan Communication did
not in turn place work orders to Channeling Party A accordingly. Subsequently, Channeling Party
A decided to cease its operations due to economic uncertainty within the PRC. Consequently,
there was no underlying transactions between Zhonggan Communication and Channeling Party
A as basis for payment by the Lending Banks to Channeling Party A. The loan proceeds were
used by Zhonggan Communication for its day-to-day operations, including settlement of trade
debts, prepayment, and working capital. Pursuant to Article 19 of the General Lending
Provisions（《貸款通則》）promulgated by the People ’s Bank of China and the Article 9 of the
Interim Measures for the Administration of Working Capital Loans （《流動資金貸款管理暫行辦
法》）, the borrower shall apply the loan in accordance with the stipulated purpose of the loan
agreement. As there was no underlying transaction between Zhonggan Communication and
Channeling Party A to support payment by the Lending Banks to Channeling Party A, as
advised by the PRC Legal Adviser, the Financing Arrangement did not comply with the relevant
loan agreements and the PRC laws and regulations. Further details are set out in the paragraph
below headed ‘‘Opinions of the PRC Legal Advisers ’’in this section.
The following chart illustrates the fund flow of scenario 1:
Remittance of loan
proceeds of
RMB291.1
million
The
Lending
Banks
Zhonggan
Communication
Channeling
Party A Suppliers
Provision of
services and sales
of products
Settlement of trade
debts and making
prepayment
Repayment of loans
of RMB291.1 million
Release of loan
proceeds of
RMB291.1 million
through
entrusted
payment
arrangements
Note: There was no significant time lag between the release of loan proceeds from the Lending Banks to
Channeling Party A and the remittance of the loan proceeds from Channeling Party A to Zhonggan
Communication.
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The Directors confirm that (i) they had no intention to commit the aforementioned non-
compliance under the Financing Arrangement in relation to Channeling Party A, and (ii) the non-
compliance was solely attributable to the fact that they were unaware that such arrangement
with Channeling Party A was in breach of the relevant PRC laws and regulations until they were
adequately advised by professionals on matters pertaining to the Financing Arrangement.
Scenario 2
Channeling Party B, a state-owned enterprise in Jiangxi Province with a registered share
capital of RMB5,000 million, is principally engaged in the provision of financial leasing,
commercial factoring and supply chain management, etc. In 2019 and 2020, Zhonggan
Communication and certain suppliers, who has incurred a significant procurement cost and/or
had relatively long business relationship with Zhonggan Communication, entered into several
procurement agreements related to the provision of labour services for the T elecommunications
Infrastructure Services projects. As for the a mount of procurement costs for each of the years
comprising the Track Record Period of the suppliers, please refer to the paragraphs headed
‘‘Business – Suppliers – Five largest suppliers ’’in this Prospectus regarding transaction amount
of the Supplier A, B and C. In order to bolster Zhonggan Communication ’s liquidity for executing
these projects, Zhonggan Communication applied to the Lending Banks for bank loans based on
the procurement agreements with the suppliers entered into in 2019 and 2020 with aggregated
amount of approximately RMB254.0 m illion served as a basis for the Group ’s applications for
entrusted loans with approximately RMB2 43.9 million. Consequently, the Lending Banks
released the loan proceeds to the suppliers through entrusted payment arrangements. Due to
financial resource management considerations of Zhonggan Communication, the suppliers
transferred the loan proceeds back to Zhonggan Communication. Zhonggan Communication
then used the loan proceeds to settle its trade payables to the suppliers. At that time, the
management of Zhonggan Communication received compliance training from professionals for
the preparation of the previous A-share listing plan. However, there was a misunderstanding
regarding the relevant laws and regulations in the PRC. In particular, the management
mistakenly believed that it was illegal for the suppliers to remit loan proceeds directly to
Zhonggan Communication. In an earnest attempt to ensure compliance, Zhonggan
Communication mistakenly instructed the suppliers to transfer the loan proceeds to Channeling
Party B which then facilitated the transfer of funds back to Zhonggan Communication. At the
time, Zhonggan Communication genuinely believed that this arrangement complied with
applicable laws and regulations. When the loan proceeds were held by Channeling Party B, the
other receivables was debited by the Group in its financial statements, subsequently Channeling
Party B transferred back the loan proceeds to Zhonggan Communication, the other receivables
was credited and cash and cash equivalents were debited by Zhonggan Communication in its
financial statements.
Pursuant to Article 19 of the General Lending Provisions （《貸款通則》）promulgated by the
People ’s Bank of China and Article 9 of the Interim Measures for the Administration of Working
Capital Loans （《流動資金貸款管理暫行辦法》）, the borrower shall apply the loan in accordance
with the stipulated purpose of the loan agreement. As advised by the PRC Legal Adviser, since
the loan proceeds were transferred to Channeling Party B without any underlying transactions
between Zhonggan Communication and Channeling Party B to support the bank loans, the
Financing Arrangement was considered to be non-compliant with the relevant loan agreements
and the laws and regulations of the PRC. This non-compliance persisted even if the loan
proceeds were subsequently used to settle the trade debts owed to the suppliers as stated in
the loan agreements. Further details are set out in the paragraph below headed ‘‘Opinions of the
PRC Legal Advisers ’’in this section.
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The following chart illustrates the fund flow of scenario 2:
Remittance of Repayment of
loans of
RMB243.9
million

Transfer of
RMB177.8
million
Release of loan
proceeds of
RMB243.9 million
through
entrusted
payment
arrangements
 The
Lending
Banks

Channeling
Party B Suppliers

Provision of
services and
sales of products
 Settlement of
trade debts
and make
prepayment Zhonggan
Communication
RMB177.8
million
(1)
(1)
(2)
Notes:
1. The Group ’s suppliers received loan proceeds of approximately RMB243.9 million from the Lending Banks
through entrusted payment arrangement for the period from July 2019 to December 2020. Out of this
amount, RMB177.8 million was related to the Financing Arrangement, while the remaining RMB66.0 million
was used by Zhonggan Communication to pay for labor services.
Of the RMB177.8 million, there was no significant time lag between the release of the loan proceeds of
approximately RMB135.0 million from the Lending Banks to the suppliers and the transfer of the funds from
the suppliers to Channeling Party B. For the remaining approximately RMB42.8 million, there was a
significant time lag of nine to 15 months between the release of loan proceeds to the suppliers and the
transfer of funds to Channeling Party B. As confirmed by t he Directors, the significant time lag was primarily
caused by a lack of effective internal control, resulting in inadequate communication between the Group ’s
project managers and finance department. This resul ted in a significant gap in information exchange,
leading to notable discrepancies between the reported progress of the projects and the advanced payments
made for them. Therefore, the finance department failed to recognise that several Group ’sp r o j e c t sh a d
encountered delays, and as a result, the excess funds made for these projects remained with the suppliers,
resulting in a failure to reconcile the amounts involved. In 2020, as part of the preparation for the previous
plan for A-share listing, the Group c onducted a thorough internal control review. During this review, the
issue was identified and promptly addressed, and the Group took proactive measures to reclaim the excess
fund from the suppliers. However, due to the suppliers ’ procedural requirements, additional processing time
was necessary to facilitate the refunds. This further contributed to the delays in the refund process,
ultimately extending the overall project timeline setback. For details, please refer to paragraphs headed
‘‘Internal control measures ’’in this section.
2. There was no significant time lag between the receipt of funds by Channeling Party B from the Group ’s
suppliers and transfer of the same amount by Channeling Party B to Zhonggan Communication.
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Channeling Party B offered support for the fund transfer primarily based on two factors.
Firstly, there existed a long-standing friendly relationship between a senior executive of
Channeling Party B and the Contr olling Shareholder, Mr. Liu Hao qiong. Secondly , Channeling
Party B assessed that there were no potential legal risks associated with the fund transfer. As
confirmed by the PRC Legal Advisers, (i) Channeling Party B did not violate Article 19 of the
General Lending Provision （《貸款通則》）promulgated by the People ’s Bank of China and the
Article 9 of the Interim Measures for the Administration of Working Capital Loans （《流動資金貸款
管理暫行辦法》）as Channeling Party B was neither the lender nor the borrower as stated in the
loan agreements and; (ii) Channeling Party B did not violate any other rules and legislations in
the PRC in relation to the Financing Arrangemen t. As confirmed by Channeling Party B and the
Directors, Channeling Party B did not (i) obtain any benefits from Zhonggan Communication as
a result of the Financing Arrangement and (ii) have no other fund transaction or special interest
arrangement with the Company or its subsidiaries and its actual controllers, shareholders,
directors, supervisors, senior management, core technical personnel or any of their respective
associates, apart from the Financing Arrangement.
The Directors confirm that they had no intention to commit the aforementioned non-
compliance under the Financing Arrangement in relation to Channeling Party B. The Directors
considered that the occurrence of the Financing Arrangement was solely attributable to the lack
of awareness among senior management regarding its non-compliance with the applicable laws
and regulations of the PRC. As above mentioned, due to a mistaken belief by the Directors that
direct remittance to Zhonggan Communication was illegal, the Channeling Party B was involved
to support the transfer of loan proceeds to Suppliers, resulting in a non-compliant Financing
Arrangement. It was only subsequent to receiving sufficient advice from professionals on
matters relating to the Financing Arrangement that they became aware of its non-compliant
nature.
For the year ended 31 December 2020, the amount involved in the Financing Arrangement
was RMB468,960,000, consisting of approximately RMB291,120,000 and RMB177,840,000,
respectively, as shown in the fund flow charts above. After December 2020, the Financing
Arrangement ceased. Besides, the outstanding amount of bank loans was fully settled in
September 2021.
Reasons for the non-compliance
The Financing Arrangement occurred primarily because of (i) administrative convenience
by maintaining readily available funds, saving time and administrative burden to obtain a bank
loan for each transaction Zhonggan Communication made with its supplier in its daily operation
and (ii) inadvertent oversight of the relevant PRC laws and regulations of some of its employees
and the Directors.
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Impact on operational a nd financial position
The Directors considered, the Sole Sponsor concurred, that the Financing Arrangement
has not had a material adverse impact on the Group ’s operational and financial condition. Their
view is supported by the following factors:
(i) the loans under the Financing Arrangement were fully settled in September 2021 and
no interest expenses were saved as a result of the Financing Arrangement, as the
bank loans under the Financing Arrangement bore interest rates comparable to other
bank loans of similar size prevailing at the time;
(ii) the Lending Banks confirmed that Zhonggan Communication ’s credit worthiness has
not been affected by the Financing Arrangement, Zhonggan Communication has
continued to cooperate with the Lending Banks and has successfully obtained loans
from the Lending Banks since the termination of the Financing Arrangement after
December 2020. As at 31 December 2023, the loans granted to Zhonggan
Communication from the Nanchang Xihu Branch of China Construction Bank
Corporation amounted to approximately RMB127 million. As at 31 December 2023,
the loans granted to Zhonggan Communication from the Jiangxi Provincial Branch of
Bank of Communications Co., Limited amounted to approximately RMB140 million;
and
(iii) the PRC Legal Advisers advised that the risk of Zhonggan Communication being
penalised for the Financing Arrangement by the regulatory authorities and being
subject to civil liabilities arising from civil claims from the Lending Banks is remote.
Further details of which are set out in the paragraph below headed ‘‘Opinions of the
PRC Legal Advisers ’’in this section.
Confirmation from the Lending Banks
The Zhonggan Communication reported the Financing Arrangement to the Lending Banks,
in response, they confirmed that since 1 January 2019 (i) the loan proceeds have been applied
in accordance with the relevant loan agreements; (ii) there is neither illegal use of the funds nor
violation of the relevant loan agreements; and (iii) Zhonggan Communication ’s credit worthiness
has not been affected by the Financing Arrangement.
Confirmation from the regulatory authorities
On 6 June 2022, Zhonggan Communication submitted the ‘‘Application of Zhonggan
Communication (Group) Holdings Limited for Coordination with the People ’s Bank of China on
Matters Relating to Listing ’’ *（《中贛通信（ 集團 ）有限公司關於協調人民銀行對上市有關懇請事項的
申請》）(the ‘‘Coordination Letter ’’) to the Office of the Joint Conference on Listing of Enterprises
in Jiangxi Province* （ 江西省企業上市工作聯
席會議辦公室 ）and the Nanchang Municipal Finance
Office（ 南昌市金融工作辦公室 ）(collectively referred to as the ‘‘Municipal Finance Offices ’’’)t o
report the Financing Arrangement. The Coordination Letter was delivered by the Municipal
Finance Offices to the Nanchang Central Sub-branch of the People ’s Bank of China ( ‘‘PBOC ’’)
and the Jiangxi Office of China Banking and Insurance Regulatory Commission ( ‘‘CBIRC ’’). In
response, PBOC confirmed on 20 June 2022, 8 March 2023 and 11 March 2024, respectively
that no administrative penalties have been imposed on Zhonggan Communication by the PBOC
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from 1 January 2019 to 20 June 2022 and from 1 January 2020 to 7 March 2023 and from 1
January 2019 to 11 March 2024 as a result of any violation of laws or regulations by Zhonggan
Communication. In addition, CBIRC replied on 29 June 2022 that any administrative penalties
imposed by CBIRC would be published on their website and no confirmation as to whether any
administrative penalty has been imposed would be issued. As such, the PRC Legal Advisers
conducted searches on the websites of CBIRC on 5 August 2022, 3 March 2023 and 20 March
2024 in relation to whether any administrative penalty has been imposed on the Zhonggan
Communication, its subsidiaries and the Lending Banks for the Financing Arrangement.
According to the search results, no such re cord has been found since 1 January 2019. In
addition, CBIRC confirmed in an interview on 19 September 2023 that since 1 January 2019 (i)
it was aware of the Financing Arrangement; (ii) Zhonggan Communication did not commit any
material violation of laws and regulations in the banking industry during the Track Record
Period; and (iii) no administrative penalties had been imposed on Zhonggan Communication and
the Lending Banks as a result of the Financing Arrangement; and (iv) Zhonggan Communication
and the Lending Banks will not be held accountable in the future as a result of the Financing
Arrangement. On 11 March 2024, PBOC further provided a confirmation to confirm that (i) no
administrative penalties had been imposed on Zhonggan Communication and the Lending Banks
as a result of the Financing Arrangement; and (ii) Zhonggan Communication and the Lending
Banks will not be held accountable in the future as a result of the Financing Arrangement.
As advised by the PRC Legal Advisers, CBIRC is the regulatory authority responsible for
the supervision and regulation of banking institutions of the PRC and it is empowered to impose
penalties on banking institutions which are in breach of relevant laws and regulations. On the
other hand, the PBOC is the regulatory authority responsible for monitoring lending activities of
banking institutions in the PRC.
Opinions of the PRC Legal Advisers
As advised by the PRC Legal Advisers, pursuant to Article 19 of the General Lending
Provisions（《貸款通則》）promulgated by the PBOC and Article 9 of the Interim Measures for the
Administration of Working Capital Loans （《流動資金貸款管理暫行辦法》）, the borrower shall apply
t h el o a np r o c e e d si na c c o r d a n c ew i t ht h es t i p u l a t e dp u r p o s es t a t e di nt h el o a na g r e e m e n t .A si t
is considered that there is no underlying transactions between Zhonggan Communication and
Channeling Party A and Channeling Party B as basis for the use of bank loans granted by the
Lending Banks, the Financing Arrangement did not comply with the terms of the relevant loan
agreements and the PRC laws and regulations.
The PRC Legal Advisers are of the view that the risk of Zhonggan Communication being
penalised for the Financing Arrangement by the regulatory authorities and being subject to civil
liabilities arising from civil claims from the Le nding Banks is remote fo r the following reasons:
(i) the loans involved were used to pay for engineering, labour procurement and other
daily business operations. They were not used for securities investment, equity
investment or real estate investment. The loans were not used in prohibited areas or
for purposes restricted by the state from production and operation. Furthermore, the
loans were not re-lent to obtain illegal income;
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(ii) the loans involved were not fraudulent loans for the purpose of illegal possession, and
the Financing Arrangement did not jeopardise the rights and interests of state
financial institutions and financial security;
(iii) the principal and interest of such loans had been fully settled in accordance with the
provisions of the loan agreements and did not cause losses to the relevant Lending
Banks, and no penalties were imposed on the Lending Banks by the relevant
regulatory authorities during the Track Record Period;
(iv) Zhonggan Communication has reported the Financing Arrangement to the Lending
Banks and obtained confirmations from them to the effect that (a) the loan proceeds
have been applied in accordance with the relevant loan agreements; (b) there is
neither illegal use of the funds nor violation of the relevant loan agreements; and (c)
Zhonggan Communication ’s credit worthiness has not been affected by the non-
compliance;
(v) Zhonggan Communication has reported the Financing Arrangement to Nanchang
Central Sub-branch of PBOC and CBIRC, bo th of which are regulatory authorities.
PBOC confirmed that no administrative penalties have been imposed on Zhonggan
Communication since 1 January 2019, and CBIRC confirmed its awareness of the
Financing Arrangement and also confirmed that Zhonggan Communication did not
violate significant banking industry laws or regulations. No administrative penalties
were imposed on the Lending Banks and no administrative penalties will be imposed
in the future on Zhonggan Communication and the Lending Banks as a result of the
Financial Arrangement as confirmed by PBOC and CBIRC;
(vi) the Financing Arrangement did not constitute subjective malicious conduct, and
Zhonggan Communication has actively rectified the relevant irregular conduct. It has
also established and effectively implemented a targeted internal control system;
(vii) Zhonggan Communication would also be indemnified by the controlling shareholders if
it is ordered by the Lending Banks or relevant regulatory authorities to pay penalties;
and
(viii) the Directors and Channeling Party A a nd Channeling Party B confirmed that the
Directors and senior management of the Group did not obtained any personal interest
from the Financing Arrangement.
Internal control measures
T o prevent reoccurrence of the non-compliant incident, the Group has adopted the following
major internal control measures:
(i) implementation of internal guidelines and policies for
(a) approving, reporting and monitoring financing activities, and
(b) prohibiting transactional financing ac tivities without underlying transactions;
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(ii) the Group ’s head of finance department shall review regularly all applications for
financing activities together with the relevant underlying transactional agreements and
assess the genuineness of the information contained in the application, and the
application must then be approved by the chairman of the Board;
(iii) the chairman of the Board, the chief executive and the chief financial officer will
review the summary of the transactional fi nancing activities on a monthly basis to
ensure that the financing activities were conducted in compliance with internal
guidelines and policies;
(iv) the accounting staff shall perform ongoing monitoring of the loan proceeds ’ utilisation.
They are also required to verify the reasons for any return of loan proceeds from
suppliers to Zhonggan Communication and cross-check with the corresponding
procurement documents; and
(v) to strengthen internal supervision, the Group ’s audit department will closely monitor
and review financing activities continuously to ensure that the Group ’s internal control
measures are properly carried out.
During the process of preparing for the Listing, Zhonggan Communication had engaged
internal control consultants to perform internal control review of its business procedure. As
advised by the internal control consultants, no material deficiency has been identified during the
follow-up review in the enhanced internal control system in relation to the financing activities.
In order to prevent reoccurence of the non-compliant incident, a training has also been
provided by the PRC Legal Advisers to the Directors and the senior management covering areas
including an introduction to non-compliant financing activities, the relevant PRC laws and
regulations and the associated risks.
Given that (i) the non-compliant incident occurred mainly due to the Directors ’
misunderstanding of the relevant PRC laws and regulations until they were adequately advised
by professionals on matters pertaining to the Financing Arrangement; (ii) the PRC Legal
Advisers are of the view that the risk of Zhonggan Communication being penalised for the
Financing Arrangement by the regulatory authorities and being subject to civil liabilities arising
from civil claims from the Lending Banks is remote ; (iii) the training provided to the Directors and
senior management of the Group by the PRC Legal Advisers; (iv) the cessation of the Financing
Arrangement since December 2020; and (v) the Group has adopted the abovementioned major
internal control measures to prevent reoccurrence of the non-compliant incident, the Directors
and the Sole Sponsor are of the view that the Financing Arrangement do not affect the
Directors ’ suitability to act as directors of a listed issu er under Rules 3.08 and 3.09 of the Listing
Rules or the Group ’s suitability for listing under Rule 8.04 of the Listing Rules.
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Social Insurance Contributions
Details of non-compliance
During the Track Record Period,
(i) Zhonggan Communication did not make social insurance contributions for some of its
employees as required under PRC laws and regulations.
(ii) Zhonggan Communication, its Shanghai and Guizhou Province branch offices, and
GLP T echnology did not make full social insurance contribution based on the
respective employee ’s actual salary level for its employees as required under PRC
laws and regulations.
The aggregate underpaid social insurance contributions for the years ended 31 December
2021, 2022 and 2023 amounted to approximately RMB660,000, RMB140,000 and RMB210,000,
respectively.
Reasons for the non-compliance
These non-compliance incidents occurred primarily because of (i) inadvertent oversight of
the relevant PRC laws and regulations; and (ii) some of its employees chose not to be enrolled
in the social insurance fund as they did not want to bear their portion of the contributions.
Legal consequences and potential liabilities
The PRC Legal Advisers advised that, according to the Social Insurance Law of the PRC*
（《中華人民共和國社會保險法》）and other relevant regulations, the relevant government authority
may order the Group to pay the unpaid amount within a certain period and a late fee that equals
to 0.05% of the total unpaid amount per day. If the Group fails to pay the unpaid amount or the
late fee within the period, it may be subject to a fine ranging between one to three times of the
total unpaid amount of the social insurance contribution.
As advised by the PRC Legal Advisers, pursuant to the Regulation of the Labour Protection
Monitoring* （《勞動 保障監察條例》）, any non-compliance with labour protection laws and
regulations will not be investigated if it is not id entified or reported within two years from the
date when such breach is committed or if such breach is a continuing breach, the date of
cessation of such breach. Part of the outstanding social insurance contribution involved ex-
employees whose employment with Zhonggan Communication has terminated for more than two
years and are time-barred.
Remedial actions, impacts on the Group and i nternal control measures to minimise the
risk of recurrence of non-compliance incidents
During the Track Record Period and up to the Latest Practicable Date, the Group had not
received any orders or demands from the relevant government authorities requesting it to pay
the shortfall in social insurance contributions or any penalties and there had been no complaints
from the Group ’s employees regarding the non-compliance of social insurance contributions.
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The Group has obtained written confirmations from the relevant authorities as follows:
(i) Zhonggan Communication and GLP T echnology
The Group has obtained two written confirmations, both dated 30 January 2024 from
the Nanchang City Human Resources and Social Security Bureau* （ 南昌市人力資源和社會
保障局 ）, which is a competent authority, confirming that, there is no outstanding social
insurance contribution (in respect of pension insurance, unemployment insurance and
work-related injury insurance) due from Zhonggan Communication and GLP T echnology
during the Track Record Period and up to 30 January 2024.
The Group has also obtained two written confirmations, both dated 26 January 2024
from the Nanchang City Healthcare Security Bureau* （ 南昌市醫療保障服務中心 ）,w h i c hi sa
competent authority, confirming that during the Track Record Period and up to 26 January
2024, there was no material violations of laws and regulations in relation to medical
insurance and maternity insurance on the part of Zhonggan Communication and GLP
T echnology, that Zhonggan Communication and GLP T echnology had not been subject to
actual or potential investigation or punishment for violating the provisions of medical
insurance laws, regulations, rules and other normative documents, has no record of being
complained against or reported to, and has no relevant disputes, litigation or controversies
with the bureau.
(ii) Shanghai branch office of Zhonggan Communication
According to the enterprise credit report dated 24 January 2024 issued by Shanghai
Public Credit Information Service Center* （ 上海市公共信用信息服務中心 ）,t h e r ew a sn o
violation of laws and regulations in relation to social insurance on the part of the Shanghai
branch office of Zhonggan Communication during the Track Record Period.
(iii) Guizhou branch office of Zhonggan Communication
According to the enterprise credit report dated 5 March 2024 issued by National
Enterprise Credit Information Publicity System （ 國家企業信用信息公示系統 ）,t h e r ew a sn o
violation of laws and regulations in relation to social insurance on the part of the Guizhou
branch office of Zhonggan Communication during the Track Record Period.
Given the above confirmations from the relevant competent authorities, the PRC Legal
Advisers are of the opinion that the risk of the Group being fined is remote provided that it pays
the unpaid amount, and late fee (if any), for social insurance in full amount within the prescribed
period after receiving notices to rectify such non-compliance from the relevant PRC authorities.
The Group would also be indemnified by the Controlling Shareholders if it is ordered by the
relevant government authority to pay any outstanding social insurance contribution or penalty.
Given the above and taking into consideration that the Controlling Shareholders have
provided an indemnity in favour of the Group in respect of the non-compliance, the Directors
believe that there will not be any material adverse impact on the Group ’s overall business,
financial condition or results of operations.
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The Group will make full social insurance contributions for its employees based on the
respective employee ’s actual salary level according to PRC laws and regulations on or before
the Listing. In order to prevent future potential n on-compliance incidents in relation to social
insurance contributions, the Group has adopted various measures including: (i) designating
personnel of human resources department for calculation and payment of social insurance
contributions; and (ii) providing training to the relevant personnel of the human resources
department.
Housing Provident Fund Contributions
Details of non-compliance
During the Track Record Period,
(i) Zhonggan Communication did not make housing provident fund contributions for some
of its employees as required under PRC laws and regulations.
(ii) Zhonggan Communication, the Shanghai and Guizhou branch offices of Zhonggan
Communication and GLP T echnology did not make full housing provident fund
contribution based on the respective employee ’s actual salary level for its employees
as required under PRC laws and regulations.
The aggregate underpaid housing provident funds for the years ended 31 December 2021,
2022 and 2023 amounted to approximately RMB140,000, RMB160,000 and RMB270,000,
respectively.
Reasons for the non-compliance
These non-compliance incidents occurred primarily because of (i) inadvertent oversight of
the relevant PRC laws and regulations; and (ii) some of its employees chose not to be enrolled
in the housing provident fund as they did not want to bear their portion of the contributions.
Legal consequences and potential liabilities
According to the Regulations on Management of Housing Provident Fund* （《住房公積金管
理條例》）, if a company fails to pay or does not contribute to the housing provident fund within
the prescribed time period, the relevant government authority may order it to make up the
outstanding contributions wi thin the prescribed time limit, a nd failing which, the relevant
authority may apply for compulsory enforcement by the People ’s Court. If the employer fails to
complete the registration formalities within the prescribed time limit, it will be subject to a fine
from RMB10,000 to RMB50,000.
Remedial actions, impacts on the Group and i nternal control measures to minimise the
risk of recurrence of non-compliance incidents
During the Track Record Period and up to the Latest Practicable Date, the Group had not
received any orders or demands from the relevant government authorities requesting it to pay
the shortfall in housing provident fund contributions or any penalties and there had been no
complaints from the Group ’s employees regarding the non-compliance of housing provident fund
contributions.
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The Group has obtained written confirmations from the relevant authorities as follows:
(i) Zhonggan Communication and GLP T echnology
The Group has obtained two written confirmations, both dated 25 January 2024 from
the Nanchang Housing Provident Fund Management Centre* （ 南昌住房公積金管理中心 ）,
which is a competent authority, confirming that there was no violations of laws and
regulations in relation to housing provident fund contribution on the part of Zhonggan
Communication and GLP T echnology.
(ii) Shanghai branch office of Zhonggan Communication
According to the enterprise credit report dated 24 January 2024 issued by Shanghai
Public Credit Information Service Center* （ 上海市公共信用信息服務中心 ）,t h e r ew a sn o
violation of laws and regulations in relation to housing provident fund contribution on the
part of the Shanghai branch office of Zhonggan Communication during the Track Record
Period.
(iii) Guizhou branch office of Zhonggan Communication
According to the enterprise credit report dated 5 March 2024 issued by National
Enterprise Credit Information Publicity System （ 國家企業信用信息公示系統 ）,t h e r ew a sn o
violation of laws and regulations in relation to housing provident fund contribution on the
part of the Guizhou branch office of Zhonggan Communication during the Track Record
Period.
Zhonggan Communication and GLP T echnology have undertaken to make full housing
provident fund contribution on or before Listing.
Given the above confirmations from the relevant competent authorities, the PRC Legal
Advisers are of the opinion that the risk of the Group being fined is remote provided that it
pays the unpaid amount, and late fee (if any), for housing provident fund contribution in full
amount within the prescribed period after receiving notices to rectify such non-compliance
from the relevant PRC authorities. The Group would also be indemnified by the Controlling
Shareholders if it is ordered by the relevant government authority to pay any outstanding
housing provident fund contribution or penalty.
Given the above and taking into consideration that the Controlling Shareholders have
provided an indemnity in favour of the Group in respect of the non-compliance, the
Directors believe that there will not be any material adverse impact on the Group ’so v e r a l l
business, financial condition or results of operations.
The Group will make full housing provident fund contributions for its employees based
on the respective employees ’ salary level accounting to the PRC Laws and regulations on
or before the Listing. In order to prevent future potential non-compliance incidents in
relation to housing provident fund contributions, the Group has adopted various measures
including: (i) designating personnel of human resources department for calculation and
payment of housing provident funds contribution s; and (ii) providing training to the relevant
personnel of the human resources department.
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RISK MANAGEMENT AND INTERNAL CONTROL
With the growth and expansion of the Group ’s operations, potential risks associated with
the business of the Group increases. It is the responsibility of the Board to ensure that the
Group maintains sound and effective internal control measures to safeguard Shareholders ’
investment and the assets of the Group at all tim es. In order to identify, assess and control the
risks that may create impediments to the growth of the business of the Group, the Group has
adopted, or expect to adopt before the Listing, a series of internal control policies, and
procedures designed to provide reasonable assurance for achieving objectives, including
effective and efficient operations, reliable financial reporting and compliance with applicable
laws and regulations and to implement risk management policies to address various potential
risks identified in relation to its operations, including operational risks, credit risks, market risks,
financial risk and legal risks. In particular, the Group has taken certain measures and has
established various structures and policies as follows to strengthen its internal control and to
manage its risks:
 a thorough examination by the Board of any material risks associated with any
material business decision before approving such decision;
 the Directors and senior management are required to keep track of day-to-day
operations and monitor any associated operational risks of the Group and to formulate
policies and resolutions to mitigate or resolve these risks;
 the engagement of an independent internal control consultant to assist the Group in
reviewing and to provide recommendations on improving its internal control system.
T aking into account the recommendation of such review by the independent internal
control consultant, the Group enhanced its internal control system accordingly;
 the establishment of the Audit Committee which will review the Group ’s internal control
system and procedures for compliance wit h the requirements prescribed by the
applicable laws, rules and regulations;
 the appointment of Zhongtai International Capital Limited as the Group ’s compliance
adviser pursuant to Rule 3A.19 of the Listing Rules upon the Listing to advise it on
compliance with the Listing Rules;
 the engagement of external legal advisers to advise the Group on compliance with
and to provide it with updates on the changes in the Listing Rules and the applicable
laws, rule and regulations from time to time and as required;
 the provision of training to relevant employees in order to enhance their industry
knowledge and to encourage an encompassing culture of risk management ensuring
that relevant employees are aware of and responsible for risk management; and
 the establishment of an in-house legal and compliance team which consists of
executive Director of the Company to organise, review and maintain its internal control
system and to provide assistance to the Directors, senior management and
employees with respect to internal control policies (where necessary).
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CONTROLLING SHAREHOLDERS
Immediately following the completion of the Global Offering (assuming that the Over-
allotment Option is not exercised and without taking into account any Shares which may be
issued upon the exercise of any options which may be granted under the Share Option
Scheme), GT & Yangtze, which is owned as to approximately 70.0% by Mr. Liu Haoqiong and as
to 30.0% by his spouse, Ms. T ao Xiulan, will directly own approximately 56.2% of the issued
share capital of the Company. Accordingly, GT & Yangtze, Mr. Liu Haoqiong and Ms. T ao Xiulan
are the controlling shareholders under the Listing Rules.
COMPETITION
Each of the Controlling Shareholders and the Directors confirms that as of the Latest
Practicable Date, neither he/she/it nor any of his/her/its close associates had any interest in a
business, apart from the business of the Group, which competes or is likely to compete, directly
or indirectly, with the Group ’s business, and requires disclosure under Rule 8.10 of the Listing
Rules.
DEED OF NON-COMPETITION
Each of the Controlling Shareholders has undertaken to the Company in the Deed of Non-
Competition that he/she/it will not, and will procure his/her/its close associates (other than
members of the Group) not to directly or indirectly be involved in or undertake any business
(other than the business engaged by the Group) that directly or indirectly competes, or may
compete, with any business engaged by any member of the Group (the ‘‘Restricted Business ’’),
or hold interest in any companies or business that compete directly or indirectly with the
business current or from time to time engaged in by the Group, except where (i) the Controlling
Shareholders and/or their close associates individually or collectively hold less than 10% of the
total issued share capital of any public company (whose shares are listed on the Stock
Exchange or any other stock exchange) which is engaged in any business that directly or
indirectly competes, or may compete with the Restricted Business; and (ii) the Controlling
Shareholders and/or their close associates individually or collectively hold less than 30% of the
total issued share capital of any private company (whose shares are not listed on any stock
exchange) which is engaged in any business that directly or indirectly competes or may
compete with the Restricted Business, provide d that the Controlling Sha reholders and their
close associates do not have the right to nominate 50% or more members or control the voting
rights (including but not limited to control th e casting vote) of the board of directors of such
public or private companies (collectively, the ‘‘Minority-Interest Companies ’’).
Save as any investment opportunities which will make the target companies fall under the
Minority-Interest Companies as set out ab ove, each of the Controlling Shareholders has
undertaken that if any new business/investment op portunity relating to the Restricted Business
(the ‘‘Competing Business Opportunity ’’) is identified by/made available to him/her/it or any of
his/her/its close associates, he/she/it shall, and shall procure that his/her/its close associates
shall, refer such Competing Business Opportunity to the Company on a timely basis and in the
following manner:
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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 refer the Competing Business Opportunity to the Company by giving written notice
(the ‘‘Offer Notice ’’) to the Company of such Competing Business Opportunity within
30 business days of identifying the nature of the Competing Business Opportunity, the
investment or acquisition costs and all other details reasonably necessary for the
Company to consider whether to pursue such Competing Business Opportunity;
 upon receiving the Offer Notice, the Company shall seek approval from a board
c o m m i t t e ec o n s i s t i n go fD i r e c t o r sw h od on o th a v ea ni n t e r e s ti nt h eC o m p e t i n g
Business Opportunity (the ‘‘Independent Board Committee ’’) as to whether to pursue
or decline the Competing Business Opportunity;
 any Director who has actual or potential interest in the Competing Business
Opportunity shall abstain from attending (unless their attendance is specifically
requested by the Independent Board Committee) and voting at, and shall not be
counted in the quorum for, any meeting convened to consider such Competing
Business Opportunity;
 the Independent Board Committee shall consider the financial impact of pursuing the
Competing Business Opportunity offered, whether the nature of the Competing
Business Opportunity is consistent with the Group ’s strategies and development plans
and the general market conditions of the Group ’s business. If appropriate, the
Independent Board Committee may appoint independent financial advisors and legal
advisors to assist in the decision-making process in relation to such Competing
Business Opportunity;
 the Independent Board Committee shall, within 30 business days of receipt of the
written notice referred above, inform the Controlling Shareholders in writing on behalf
of the Company its decision whether to pursue or decline the Competing Business
Opportunity;
 the Controlling Shareholders shall be entitled but not obliged to pursue such
Competing Business Opportunity if he/she/it receives a notice from the Independent
Board Committee declining such Competing Business Opportunity or if the
Independent Board Committee fails to respond within such 30 business days ’ period
mentioned above; and
 if there is any material change in the nature, terms or conditions of such Competing
Business Opportunity pursued by the Contro lling Shareholders, he/she/it shall refer
such revised Competing Business Opportunity to the Company as if it was a new
Competing Business Opportunity.
The Deed of Non-Competition will lapse automatically if the Controlling Shareholders and
their close associates cease to hold individually and/or collectively, whether directly or indirectly,
30% or above of the then issued share capital of the Company or the Shares cease to be listed.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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In order to promote good corporate governance practices and to improve transparency, the
Deed of Non-Competition includes the following provisions:
 the independent non-executive Directors shall review, at least on an annual basis, the
compliance with the Deed of Non-Competition by the Controlling Shareholders;
 each of the Controlling Shareholders has undertaken to the Company that he/she/it
will provide and procure his/her/its close associates to provide on best endeavor
basis, all information necessary for the annual review by the independent non-
executive Directors for the enforcement of the Deed of Non-Competition;
 the Company will disclose the review by the independent non-executive Directors on
the compliance with, and the enforcement of, the Deed of Non-Competition in its
annual report or by way of announcement to the public in compliance with the
requirements of the Listing Rules;
 the Company will disclose the decisions on matters reviewed by the independent non-
executive Directors (including the reasons for not taking up the Competing Business
Opportunity referred to the Company) either through its annual report or by way of
announcement to the public; and
 in the event that any of the Directors and/or their respective close associates has
material interests in any matter to be de liberated by the Board in relation to the
compliance and enforcement of the Deed of Non-Competition, he/she may not vote on
the resolutions of the Board approving the matter and shall not be counted towards
the quorum for the voting pursuant to the applicable provisions in the Articles of
Association.
INDEPENDENCE FROM THE CONTROLLING SHAREHOLDERS
Management Independence
The Board of the Company comprises six executive Directors and three independent non-
executive Directors. Although Mr. Liu Haoqiong is the chairman of the Board, an executive
Director and also a Controllin g Shareholder, the Group ’s management and operational decisions
are made by all the executive Directors and senior management, all of whom have substantial
experience in the industry in which the Group is engaged and/or in their respective fields of
expertise. The balance of power and authority is ensured by the operation of the senior
management team and the Board. See ‘‘Directors and Senior Management ’’for more details.
Each of the Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she must act for the benefit of and in the best interests of the Company
and not allow any conflict between his/her duties as a Director and his/her personal interests.
Further, the Company believes that the independent non-executive Directors will bring
independent judgment to the decision-making process of the Board. In addition, the Directors
shall not vote in any Board resolution approving any contract or arrangement or any other
proposal in which he/she or any of his/her close associates has a material interest and shall not
be counted in the quorum present at the particular Board meeting.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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Based on the above, the Directors are satisfied that the Board as a whole together with the
senior management team is able to perform the managerial role in the Group independently.
Operational Independence
Although the Controlling Shareholders will ret ain a controlling interes t in the Company after
the Global Offering, the Company has full rights to make all decisions regarding, and to carry
out, its own business operations independently. The Company (through its subsidiaries) holds or
enjoys the benefit of all the relevant licenses necessary to carry on its business, and has
sufficient capital, equipment, access to customers and suppliers, and employees to operate its
business independently from the Controlling Shareholders and their respective close associates.
In addition, the Company ’s organisational structure is made up of individual departments, each
with specific areas of responsibilities. The Company has also established a set of internal
control measures to facilitate the effective operation of its business.
The Directors do not expect that any significant transactions will be entered into between
the Group and the Controlling Shareholders upon or shortly after the Global Offering.
Based on the above, the Directors are satisfied that the Company has been operating
independently from the Controlling Shareholders and their r espective close associates during
the Track Record Period and will continue to operate independently.
Financial Independence
During the Track Record Period and up to the Latest Practicable Date, the Group has its
own internal control, accounting and financ ial management system, acc ounting and finance
department and the Group makes financial decisions according to its own business needs. In
addition, the Group does not rely on the Controlling Shareholders and/or their close associates
by virtue of their provision of financial assistance.
During the Track Record Period, the Group had certain amounts due to Mr. Liu Haoqiong, a
Controlling Shareholder, and his associates, de tails of which are set out in Notes 26 and 29 to
the Accountants ’ Report set out in Appendix I to this prospectus. All such amounts will be fully
settled before Listing.
During the Track Record Period, the Group als o received financial assistance from Mr. Liu
Haoqiong and Ms. T ao Xiu lan, each a Controlling Shareholder , and/or their associates by way of
personal guarantees and collateral offered by Mr. Liu Haoqiong, Ms. T ao Xiulan and/or their
associates, details of which are set out in Notes 21 and 29 to the Accountants ’ Report set out in
Appendix I to this prospectus. Confirmations have been obtained from the relevant banks that
the relevant collaterals will be released, and the relevant guarantees will be replaced by
corporate guarantee to be provided by the Company upon Listing.
As such, the Group will be able to obtain bank borrowings in its own name without any
financial assistance from the Controlling Share holders and/or their associates following the
Global Offering. Therefore, the Directors believe that the Group is capable of obtaining financing
from external sources without reliance on the Controlling Shareholders and/or their associates.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
– 291 –


--- page 301 ---
Based on the above, the Directors believe that the Company has the ability to operate
independently of the Controllin g Shareholders and their respective close associates from a
financial perspective and is able to maintain financial independence from the Controlling
Shareholders and their respective close associates.
CORPORATE GOVERNANCE MEASURES
Each of the Controlling Shareholders has confirmed that he/she/it fully comprehends his/
her/its obligations to act in the Shareholders ’ and the Company ’s best interests as a whole. The
Directors believe that there are adequate corporate governance measures in place to manage
existing and potential conflicts of interest. In order to further avoid potential conflicts of interest,
the Company has implemented the following measures:
(a) as part of the preparation for the Global Offering, the Company has amended the
A r t i c l e so fA s s o c i a t i o nt oc o m p l yw i t ht h eL i s t i n gR u l e s .I np a r t i c u l a r ,t h eA r t i c l e so f
Association provide that, unless otherwise provided, a Director with material interests
shall make full disclosure in respect of matters that conflict or potentially conflict with
the Company ’s interest and abstain himself/herself from voting and not be counted
towards the quorum on the resolution in which such Director or his/her close
associates have a material interest;
(b) the Company is committed that the Board should include a balanced composition of
executive and non-executive Directo rs (including independent non-executive
Directors). The Company has appointed three independent non-executive Directors
and the Company believes the independent non-executive Directors possess sufficient
experience, and they are free of any business or other relationship which could
interfere in any material manner with the exercise of their independent judgment and
will be able to provide an impartial, external opinion to protect the interests of the
Shareholders. Details of the independent non-executive Directors are set out in
‘‘Directors and Senior Management – Directors – Independent Non-executive
Directors ’’;
(c) in the event that the independent non-executive Directors are requested to review any
conflicts of interests circumstances between the Company on the one hand and the
Controlling Shareholders and/or the Directors on the other hand, the Controlling
Shareholders and/or the Directors shal l provide the independent non-executive
Directors with all necessary information, and the Company shall disclose the
decisions of the independent non-executive Directors either through the annual report
or by way of announcements; and
(d) the Company has appointed Zhongtai International Capital Limited as its compliance
advisor, which will provide advice and guidance to the Company in respect of
compliance with the applicable laws and the Listing Rules including various
requirements relating to directors ’ duties and corporate governance.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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--- page 302 ---
OVERVIEW
The Board currently consists of nine Directors , including six executive Directors and three
independent non-executive Directors. All Directors are elected by the general meeting for a term
of three years which is renewable upon re-election. The major powers and functions of the
Board include, but are not limited to, convening the general meetings, presenting reports to the
general meetings, implementing the resolutions passed at the general meetings, determining the
operational plans and investment plans of the Group, determining the annual financial budgets
and final accounts of the Group, determini ng the fundamental management systems of the
Group, formulating profit distribution plans and loss recovery plans of the Group, and exercising
other powers and functions as conferred by the Memorandum and Articles of Association.
The following tables set forth information regarding the Directors and senior management.
Directors and Senior Management
The following table sets forth certain information of the Directors:
Name Age Position Major duties
Time of joining
the Group Date of appointment
Relationship with
other Directors and
senior management
Executive Directors
Mr. Liu Haoqiong
（ 劉皓瓊 ）.......
54 Chairman and
executive
Director
Responsible for the overall
management and business strategies
and management of the Group
Since
establishment of
the Group
Appointed as Director on 19 May
2022; redesignated as executive
Director on 28 June 2023
Father of Mr. Liu
Dingli and Mr. Liu
Dingyi
Mr. Peng Shengqian
（ 彭聲謙 ）.......
60 Executive Director Responsible for management of
marketing department, overseeing
research and development and a
member of the Remuneration
Committee
June 2019 Appointed as Director on 19 May
2022; redesignated as executive
Director on 28 June 2023
N/A
Ms. Xie Xiaolan
（ 謝小蘭 ）.......
63 Executive Director Responsible for business development
and project management of the
T elecommunications Infrastructure
Services business segment
October 2003 Appointed as Director on 19 May
2022; redesignated as executive
Director on 28 June 2023
N/A
Mr. Liu Dingli
（ 劉鼎立 ）.......
33 Executive Director Responsible for management of
Digitalisation Solution Services
business segment and a member of
the Nomination Committee
June 2017 Appointed as Director on 19 May
2022; redesignated as executive
Director on 28 June 2023
Son of Mr. Liu
Haoqiong; brother
of Mr. Liu Dingyi
Mr. Liu Dingyi
（ 劉鼎議 ）.......
28 Executive Director
and joint
company
secretary
Responsible for overseeing legal and
compliance activities of the Group
May 2020 Appointed as Director on 19 May
2022; redesignated as executive
Director on 28 June 2023
Son of Mr. Liu
Haoqiong; brother
of Mr. Liu Dingli
Mr. Zhou Zhiqiang
（ 周志強 ）.......
41 Executive Director Responsible for finance and treasury
management
August 2017 Appointed as Director on
13 September 2022;
redesignated as executive
Director on 28 June 2023
N/A
DIRECTORS AND SENIOR MANAGEMENT
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--- page 303 ---
Name Age Position Major duties
Time of joining
the Group Date of appointment
Relationship with
other Directors and
senior management
Independent Non-
executive Directors
Mr. Yu Shiyong
（ 余世勇 ）.......
61 Independent
non-executive
Director
Providing independent opinion and
judgment to the Board; chairman of
the Audit Committee; member of
each of the Nomination Committee
and the Remuneration Committee
October 2020 17 June 2024 N/A
Mr. Li Yinguo
（ 李銀國 ）.......
68 Independent
non-executive
Director
Providing independent opinion and
judgment to the Board; member of
the Audit Committee and the
chairman of the Remuneration
Committee
October 2020 17 June 2024 N/A
Mr. Zhu Yugang
（ 朱玉鋼 ）.......
54 Independent
non-executive
Director
Providing independent opinion and
judgment to the Board; member of
the Audit Committee and chairman
of the Nomination Committee
October 2020 17 June 2024 N/A
The senior management is responsible for the day-to-day management of the Group ’s
business. The following table below sets forth certain information on the senior management of
the Company:
Name Age Position Major duties
Time of joining
the Group
Date of appointment as senior
management
Relationship with
other Directors and
senior management
Mr. T seung Yat Ming
（ 蔣一銘 ）.......
38 Vice president Responsible for overseeing corporate
finance and capital market activities
of the Group
August 2021 17 June 2024 N/A
DIRECTORS
Executive Directors
Mr. Liu Haoqiong （ 劉皓瓊）, 54, is the chairman and an executive Director of the Company.
Mr. Liu is responsible the overall management and business strategies of the Group and serves
as chairman and general manager of the Group ’s principal operating subsidiary, Zhonggan
Communication.
Mr. Liu has over 20 years of experience in the telecommunications infrastructure industry.
From August 2001 to November 2016, Mr. Liu was the legal representative of Nanchang
Changjiang Electric Power Engineering Installation Co., Ltd.* （ 南昌市長江電力工程安裝有限公
司 ）(‘‘Changjiang Electric ’’), a company principally engaged in sale and installation of electronic
equipment. Since May 2002, upon establishment of Zhonggan Communication, Mr. Liu has
served as the general manager of Zhonggan Communication.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 304 ---
In November 2012, Mr. Liu obtained the qualification of engineer in telecommunications
infrastructure from the Office of Competency of Fuzhou* （ 撫州市職稱工作辦公室 ）, Jiangxi
Province, the PRC. Further, in June 2015, Mr. Liu obtained the qualification in lightning
protection work from the China Meteorological Administration （ 中國氣象局 ）.
Mr. Liu graduated from the Nanchang University in July 1992, where he majored in
communication and information systems. In Ja nuary 2020, Mr. Liu graduated from China
University of Petroleum-Beijing, where he majored in computer science and technology through
online courses. In December 2021, Mr. Liu completed the Advanced Business Management
Program at MBA School of Education of Jiangxi University of Finance and Economics.
Mr. Liu was a director, a supervisor and/or a legal representative of the following
companies incorporated in the PRC when they were dissolved due to cessation of business or
had their business license revoked, with details as follows:
Company Position
Place of
incorporation
Principal business activity
immediately before
dissolution/revocation of
business license
Date of
dissolution/
revocation of
business license
Means of
dissolution/
revocation of
business
license
Jiangxi Gantong Communication
Engineering Co., Ltd.*
（ 江西贛通通信工程有限公司
former name 江西省贛達實業發
展有限公司 ） ...........
Legal representative,
executive director, and
general manager
PRC Engineering, maintenance and
technical consultancy services
25 August 2016 Dissolved by
deregistration
Jiangxi Yingdian Investment
Management Co., Ltd.*
（ 江西英琟投資管理有限公司 ）..
Supervisor PRC Investment management 30 October 2017 Dissolved by
deregistration
Nanchang Changjiang Electric
Power Engineering and
Installation Co., Ltd.*
（ 南昌市長江電力工程安裝
有限公司 ）.............
Legal representative PRC Sales of electric power
equipment and devices,
technical consultancy, and
engineering
Business license
r e v o k e do n1 8
October 2007
Deregistration on 4
November 2016
Revocation of
business
licence
Jiangxi Gantong Communication
T echnology Co., Ltd.*
（ 江西贛通通信技術有限公司 ）..
Legal representative,
executive director, and
general manager
PRC Communication engineering,
communication engineering
maintenance, and technical
consultancy services
2 September 2016 Dissolved by
deregistration
Jiangxi Gantong Communication
Service Co., Ltd.*
（ 江西贛通通信服務有限公司 ）..
Legal representative,
executive director, and
general manager
PRC Communication engineering,
communication engineering
maintenance, and technical
consultancy services
29 August 2016 Dissolved by
deregistration
DIRECTORS AND SENIOR MANAGEMENT
– 295 –


--- page 305 ---
Changjiang Electric was established on 20 August 2001, with the intention of engaging in
various business activities, such as providing electric facility services, selling electric equipment,
and conducting indoor pipeline installations. However, it has not commenced business since its
establishment. Due to the lack of knowledge on the relevant laws and regulations of its
responsible persons, the required annual inspection on Changjiang Electric in 2003 and 2004,
respectively, was omitted. According to Nan chang Industry and Commerce Administration
Bureau ’s penalty decision Honggongshanggechuzi [2007] No. 2274 （ 洪工商個處字[2007] 第2274
號 ）on 18 October 2007, the business license of Changjiang Electric was revoked as it had
violated the Regulations on the Administration of Company Registration (2005 amended version)
（《公司登記管理條例》（ 2005 年修訂版 ））due to its failure to carry out the required annual
inspection in 2003 and 2004, respectively, which was an unintentional omission. Pursuant to
Article 146 of the PRC Company Law, for any person (i) being the legal representative of a PRC
company of which the business licence has been revoked and is being ordered to close down
due to the violation of laws or regulations; and (i i) bearing the personal responsibility as a result
of such revocation of business licence, he or she will be prohibited from being a director,
supervisor or senior management in any other PRC companies within three years from the date
of such revocation of business licence.
In 2016, Zhonggan Communication planned to apply for listing of its shares on the NEEQ.
At the time, one of the legal advisers in the NEEQ listing exercise, Beijing Dacheng (Nanchang)
Law Office, noted that Mr. Liu had served as the legal representative of Changjiang Electric and
had its business license revoked in 2007. Accordingly, they suggested that Changjiang Electric
should proceed with an additional deregistration procedure. Subsequently, on 7 September
2016, a shareholders meeting of Changjiang Electric was held, where it was unanimously
resolved to cease operations and initiate the deregistration of Changjiang Electric. Changjiang
Electric ’s liquidation process commenced on 10 September 2016. As of 31 October 2016, its
creditor ’s rights and debts had fully liquidated, and its remaining assets had been completely
distributed.
As confirmed by the PRC Legal Advisers, on 2 November 2016, Changjiang Electric
applied to the Nanchang Market and Quality Supervision Administration Bureau （ 南昌市市場和質
量監督管理局 ）(‘‘NMQSAB ’’) for deregistration. The NMQSAB verified and processed the
deregistration application in accordance to the law on 4 November 2016. Based on the
aforementioned circumstances, Beijing Dacheng (Nanchang) Law Firm issued a legal opinion,
stating that Mr. Liu ’s qualifications to serve as directors, supervisors, and senior managers of the
company will not be affected by the revocation of Changjiang Electric ’s business license.
Subsequently Zhonggan Communication was successfully listed on the NEEQ on 25 January
2017.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 306 ---
The PRC Legal Advisers are of the view that (i) the reason for the revocation of business
licence of Changjiang Electric is an unintentional omission of the required annual inspections,
and it has been more than three years since then, there is no violation of Article 146 of the PRC
Company Law that Mr. Liu act as a director of the Company; (ii) Mr. Liu was not subject to any
administrative penalty for the revocation under the Nanchang Industry and Commerce
Administration Bureau ’s penalty decision [2007] No.2274 （ 洪工商個處字[2007] 第2274 號 ）; (iii) Mr.
Liu has not been subject to any administrative penalty for the revocation as verified by China
Judicial Instruments Network （ 中國裁判文書網 ）, China Market Supervision Administrative
Punishment Network （ 中國市場監管行政處罰網 ）,M r .L i u ’s certificate of no criminal record and
personal credit report; and (iv) the NMQSAB verified and processed the deregistration
application of Changjiang Electric in accordance to the law. For such reasons, as confirmed by
the PRC Legal Advisers, the revocation of the business licence of Changjiang Electric will not
affect Mr. Liu ’s suitability to act as a director of the Company.
Mr. Liu also confirmed that (i) the above companies were solvent immediately prior to their
dissolutions or revocation of business licence; (ii) there was no material wrongful act on his part
leading to the dissolutions or revocation of business licence of the above companies and was
not aware of any actual or potential claim that had been or would be made against him as a
result of the dissolutions or revocation of business licence; and (iii) no misconduct or
misfeasance had been involved in the dissolution or revocation of business licence of the above
companies.
Mr. Peng Shengqian （ 彭聲謙）, aged 60, is an executive Director and a member of the
Remuneration Committee of the Company. He ha s been a director of Zhonggan Communication
since February 2020 and the person-in-charge of the Shanghai branch office of Zhonggan
Communication since January 2020. Mr. Peng is mainly responsible for management of the
marketing development and overseeing research and development of the Group.
From 2001 to 2005, he served as the deputy general manager of Zhejiang Tiantong
Electronics Co., Ltd* （ 浙江天通電子股份有限公司 ）(currently known as TDG Holding Co., Ltd （ 天
通控股股份有限公
司 ）), a company listed on the Shanghai Stock Exchange (Stock Code:
600330). From September 2007 to April 2011, he served as the deputy general manager of
Jiangsu Zhongtian T echnology Co., Ltd.* （ 江蘇中天科技股份有限公司 ）, a Company listed on the
Shanghai Stock Exchange (Stock Code: 600522), as well as the deputy general manager of
technology division and general manager of broadcast and network division. From April 2011 to
February 2012, he served as the sales director of T ongding Interconnection Information Co.,
Ltd.* ( ‘‘Tongding Interconnection ’’)（ 通鼎互聯信息股份公司, a company listed on the Shenzhen
Stock Exchange (Stock Code: 002491) ）. From March 2012 to December 2014, he served as
deputy general manager of T ongding Group Co., Ltd.* （ 通鼎集團有限公司 ）.F r o mM a y2 0 1 5t o
June 2019, he served as the deputy general manager of T ongding Interconnection. Since
February 2020, he has served as a director of Zhonggan Communication.
Mr. Peng obtained the qualification of senior engineer in electronic engineering awarded by
the Department of Human Resources of Zhejiang Province, the PRC, in June 2002. He was
qualified as a registered career manager by the China Enterprise Evaluation Association （ 中國企
業評價協會 ）in January 2007.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 307 ---
Mr. Peng was a director or supervisor of the following companies incorporated in the PRC
when they were dissolved due to cessation of business or had their business license revoked,
with details as follows:
Company Position
Place of
incorporation
Principal business activity
immediately before
dissolution/revocation of
business license
Date of
dissolution/
revocation of
business license
Means of
dissolution/
revocation of
business
license
Zhongtian T echnology
(Shenyang) Optical Cable
Co., Ltd.*
（ 中天科技（ 瀋陽 ）光纜有限公司 ）.
Director PRC Manufacturing, sales and after-
sales service of optical fibers,
optical cables etc. for
communication
15 August 2019 Dissolved by
deregistration
Shanghai Yunjing Electronic
T echnology Co. Ltd.*
（ 上海運晶電子科技有限公司 ）
(‘‘Shanghai Electric ’’).....
Supervisor PRC Development, processing,
manufacturing and sales of
electronic components
27 July 2010 Revocation of
business
licence
Referring to the revocation of its business licence, Shanghai Electric overlooked its annual
inspection requirement, and as a result it violated the ‘‘Regulations on the Administration of
Company Registration ’’ (2005 revision) （《公司登記管理條例》（ 2005 年修訂版 ））.I nl i g h to ft h e
aforementioned violation, the Nanchang Administration for Industry and Commerce （ 南昌市工商
行政管理局 ）revoked the business license of Shanghai Electric in 2010.
As advised by the PRC Legal Advisers, pursuant to Article 146 of the PRC Company Law,
for any person (i) being the legal representative of a PRC company of which the business
licence has been revoked and is being ordered to close down due to the violation of laws or
regulations; and (ii) bearing the personal responsibility as a result of such revocation of
business licence, he or she will be prohibited from being a director, supervisor or senior
management in any other PRC companies within three years from the date of such revocation of
business licence.
The PRC Legal Advisers confirmed that the business licence of Shanghai Electric has been
revoked for more than three years. It is also further confirmed by Mr. Peng and verified by the
PRC Legal Advisers that Mr. Peng ’s oversight did not constitute as a major violation of the
relevant laws and regulations. As advised by the PRC Legal Advisers, the aforesaid revocation
of the business licence had not affected the suitability of Mr. Peng to act as a Director of the
Company.
Mr. Peng confirmed that (i) the above companies were solvent immediately prior to their
dissolution or revocation of business licence; (ii) there was no material wrongful act on his part
leading to the dissolution or revocation of business licence of the above companies and was not
aware of any actual or potential claim that had been or would be made against him as a result of
the dissolution or revocation of business licence; and (iii) no misconduct or misfeasance had
been involved in the dissolution or revocation of business licence of the above companies.
Mr. Peng graduated from China University of Geosciences （ 中國地質大學 ）in Wuhan, the
PRC with a bachelor ’s degree in petrology and a master degree in science, both in June 1997.
DIRECTORS AND SENIOR MANAGEMENT
– 298 –


--- page 308 ---
Ms. Xie Xiaolan （ 謝小蘭）, 63, is an executive Director of the Company, a director of
Zhonggan Communication and the director and general manager of Gantong Jiangxi, and has
served various positions within the Group.
Ms. Xie has over 18 years of experience in the telecommunications infrastructure industry.
From October 2003 to August 2016, she served as the deputy general manager of Zhonggan
Communication. Since January 2014, she also served as director of the production department
of Zhonggan Communication and is responsible for business development of the infrastructure
market and management of production. Further, since August 2016, she has served as the
director and assistant to the general manager of Zhonggan Communication.
Ms. Xie received the certification in enterp rise cadre recruitment from the Ministry of
Human Resources of Nanchang, Jiangxi Province, the PRC in November 1993.
Mr. Liu Dingli （ 劉鼎立）, 33, is an executive Director of the Company, a member of the
Nomination Committee, a director of Zhonggan Communication and the director and general
manager of GLP T echnology and GLP Software, both indirectly wholly-owned subsidiaries of the
Company.
From June 2017 to November 2017, he served as the director of the internet technology
operation department of Zhonggan Communication. From November 2017 to September 2020,
he acted as the general manager of GLP T echnology. Since September 2020 to present, he has
been serving as the executive director, general manager and legal representative of GLP
T echnology. Since February 2020, he has been serving as a director of Zhonggan
Communication, and since February 2022 he has been serving as the executive director,
general manager and legal representative of GLP Software.
Mr. Liu received a bachelor of arts degree in hospitality and tourism management in
December 2011 and a master of science in international hospitality management and leadership
in March 2013, both from Queen Margaret University in Edinburgh, Scotland.
Mr. Liu was a director or a supervisor of the following companies incorporated in the PRC
or Hong Kong when they were dissolved due to cessation of business, with details as follows:
Company Position
Place of
incorporation
Principal business activity
immediately before dissolution
Date of
dissolution
Means of
dissolution
Jiangxi Jixin Communication
Co., Ltd.*
（ 江西吉鑫通信有限公司 ） ....
Legal representative,
executive Director,
and general manager
PRC Network information technology
consultancy services and
communication technology
development
26 August 2016 Dissolved by
deregistration
Jiangxi Gantong Real Estate
Development Co., Ltd.*
（ 江西贛通房地產開發有限公司 ）.
Legal representative,
and executive director
PRC Real estate development and
sales, housing rental, and
architectural design
21 August 2020 Dissolved by
deregistration
Jiangxi Dingli Automobile
T echnology Service Co., Ltd*
（ 江西鼎立汽車科技服務有限公
司 ） ................
Supervisor PRC Motor vehicle maintenance
services, car detailing,
leasing, human resources
information consultancy
31 July 2019 Dissolved by
deregistration
C a s t l eF r o n tL i m i t e d....... D i r e c t o r H o n gK o n g I n v e s t m e n th o l d i n g 2 4J u l y 2020 Dissolved by
deregistration
DIRECTORS AND SENIOR MANAGEMENT
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--- page 309 ---
Mr. Liu confirmed that (i) the above companies were solvent immediately prior to their
dissolutions; (ii) there was no wrongful act on his part leading to the dissolutions of the above
companies and was not aware of any actual or potential claim that had been or would be made
against him as a result of the dissolutions; and (iii) no misconduct or misfeasance had been
involved in the dissoluti on of the above companies.
Mr. Liu Dingyi （ 劉鼎議）, aged 28, is an executive Director and a joint company secretary
of the Company and is responsible for overseeing legal and compliance activities of the Group.
Since May 2020, he has been the assistant to the general manager of the securities and legal
department of Zhonggan Communication. Since March 2022, he has served as a director of
Zhonggan Communication.
Mr. Liu graduated from Monash University, Australia, in May 2020 with a Bachelor of
Business, with a major in banking and finance.
Mr. Zhou Zhiqiang （ 周志強 ）, aged 41, is an executive Director of the Company and the
Group ’s chief financial officer. Mr. Zhou has o ver 17 years of experience in financial
management. From July 2005 to July 2008, Mr. Zhou served as the accountant of Jiangxi
Chenming Paper Co., Ltd. （ 江西晨鳴紙業有限責任公司 ）, a subsidiary of Shandong Chenming
Paper Holdings Co., Ltd.* （ 山東晨鳴紙業集團股份有限公司 ）, a company listed on the Stock
Exchange (Stock Code: 01812) and the Shenzhen Stock Exchange (Stock Code: 000488). From
August 2008 to July 2017, he served as the finance manager of Jiangxi Weidahui Real Estate
Development Co., Ltd.* （ 江西省威達匯房地產開發有限公司 ）. Since August 2017, he has been the
chief financial officer of Zhonggan Communication. He obtained bachelor ’s degree in
accountancy from Jiangxi University of Finance and Economics in June 2005.
Independent Non-Executive Directors
Mr. Yu Shiyong （ 余世勇）, aged 61, was appointed as an independent non-executive
Director of the Company on 17 June 2024. He is also the chairman of the Audit Committee and
a member of each of the Nomination Committee a nd the Remuneration Committee. He has been
an independent director of Zhonggan Communication since October 2020.
Mr. Yu has more than 12 years of experience in accounting and financial management.
From September 1999 to October 2002, he served as the finance director of Fujian Mindong
Electric Power Co., Ltd.* （ 福建閩東電力股份有限公司 ）, a company listed on the Shenzhen Stock
Exchange (Stock Code: 000993). During his tenure, he was mainly responsible for accounting,
financial information disclosure and comprehensive financial management of the listed company.
In particular, he was responsible for the company ’s restructuring, initial public offering and A-
share issuance. From January 2003 to September 2006, he served as the chief financial director
of Shandong Chenming Paper Holdings Co., Ltd.* （ 山東晨鳴紙業集團股份有限公司 ）, a company
listed on the Stock Exchange (Stock Code: 01812) and the Shenzhen Stock Exchange (Stock
Code: 000488), where he was mainly responsible for internal control and fiscal and taxation
management of the listed company. In light of his corporate management and financial
management expertise, he served as the financial person in charge in relation to compliance for
the company ’s quarterly, semi-annual and annual financial information disclosure. From May
2010 to June 2013, he was the vice president of Xtep (China) Co., Ltd.* （ 特步（ 中國 ）有限公司 ）,
a subsidiary of XT ep International Holdings Limited （ 特步國際控股有限公司 ）, a company listed
on the Stock Exchange (Stock Code: 01368), where he was primarily responsible for the
DIRECTORS AND SENIOR MANAGEMENT
– 300 –


--- page 310 ---
financial and capital management of the listed company and its PRC subsidiaries. Since April
2020, he has been serving as the executive director and general manager of Xiamen Litu
Enterprise Management Consulting Co., Ltd.* （ 廈門利兔企業管理諮詢有限公司 ）,w h e r eh ei s
responsible for the business operation and financial management of the company. Given his
professional experience, he has been crucial in establishing the company ’sf i n a n c i a l
management and tax planning system. As part of his role at the company, he has been working
with central state-owned listed companies and both large and medium-sized private enterprises
as their business training instructor, where he provided training courses regarding investment
and financing, internal control, risk management, and financial and taxation management. His
training courses aimed to enhance the corporate, fiscal and taxation management of the client
companies. From November 2016 to the present, he has also served as a guest lecturer at the
School of Accountancy of the Central University of Finance and Economics* （ 中央財經大學 ）.
In December 1997, Mr. Yu qualified as a senior accountant by Personnel and Labour
Department of Ningxia Hui Autonomous Region* （ 寧夏回族自治區人事勞動廳 ）. In October 2020,
Mr. Yu received the Certificate for Strategic Financial Management issued by the Enterprise
Financial Management Association of China. In 2006, Mr. Yu obtained the Sino-British
Vocational Qualifications Cooperation Project Ce rtificate issued by the Occupation Skill T esting
Authority（ 職業技能鑒定中心 ） and the China Employmen t Training T echnical Instruction Centre
（ 中國就業培訓技術指導中心 ）, which certified that Mr. Yu has skill of Cambridge International
Diploma in Management – Financial Management (Module Certificate) in Higher Professional
Level. He was also awarded the certificate of qualification of independent director issued by the
Shanghai Stock Exchange in April 2017. In June 2013, Mr. Yu obtained certification as taxpay
strategist by the Chinese Society of Educational Development Strategy. Mr. Yu received the
Certificate of Qualification for CFO Enterprise Management Post issued by China Enterprise
Confederation in September 2006. In August 2006, Mr. Yu obtained qualification as Chief
Financial Officer (CFO) for managerial position of China Enterprise Confederation from the CTA
Te s t i n g A u t h o r i t y.
Mr. Yu obtained a master ’s degree in business administration from Stratford University in
June 2005. Mr. Yu obtained a PhD in business administration from the Business School at
Beijing Normal University （ 北京師範大學經濟與工商管理學院 ）in October 2013.
Mr. Yu was the sole proprietor of the follow ing individual industrial and commercial
household*（ 個體工商戶 ） in the PRC when it was dissolved due to cessation of business with
details as follows:
Company Position
Place of
incorporation
Principal business activity
immediately before dissolution
Date of
dissolution
Means of
dissolution
Shenzhen Longhua District Tu
Ge Management Consulting
Department*（ 深圳市龍華區兔哥
管理諮詢部 ） ...........
Sole proprietor PRC Corporate management
consultancy; cultural event
planning
19 April 2022 Deregistration
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Mr. Yu confirmed that (i) the above individual industrial and commercial household was
solvent immediately prior to its dissolution; (ii) there was no wrongful act on his part leading to
the dissolution of the above individual industrial and commercial household and was not aware
of any actual or potential claim that had been or would be made against him as a result of the
dissolution; and (iii) no misconduct or misfeasance had been involved in the dissolution of the
above individual industrial and commercial household.
M r .L iY i n g u o（ 李銀國）, aged 68, was appointed as an independent non-executive Director
of the Company on 17 June 2024. He is also a member of the Audit Committee and the
chairman of the Remuneration Committee. He has been an independent director of Zhonggan
Communication since October 2020.
Mr. Li has more than 10 years of experience in higher education. From January 2004 to
April 2016, he worked in Chongqing University of Posts and T elecommunications （ 重慶郵電大
學 ）, serving as vice president and president. From April 2018 to August 2021, Mr. Li was an
independent director of Chongqing Chuanyi Automation Co.,Ltd.* （ 重慶川儀自動化股份有限公
司 ）, the shares of which are listed on the Shanghai Stock Exchange (Stock Code: 603100).
Mr. Li obtained a master ’s degree in science from Chongqing University in December 1989.
Mr. Li graduated from Chongqing University with a doctorate degree in automatic control theory
and application in July 1996.
Mr. Zhu Yugang （ 朱玉鋼）, aged 54, was appointed as an independent non-executive
Director of the Company on 17 June 2024. He is also a member of the Audit Committee and the
chairman of the Nomination Committee. He has been an independent director of Zhonggan
Communication since October 2020.
From May 2009 to June 2014, he served as the chief lawyer of Jiangxi Hua Gan Law Firm*
（ 江西華贛律師事務所 ）. Since June 2014, he served as the senior partner of Jiangxi Hua Gan
Law Firm*（ 江西華贛律師事務所 ）.
Mr. Zhu is currently a practicing lawyer in the PRC and a member of the Chinese People ’s
Political Consultative Conference National Committee of Xihu District, of Nanchang Municipal.
Mr. Zhu received an bachelor of laws degree from China Central Radio and TV University
（ 中央廣播電視大學 ）(currently known as The Open University of China
（ 國家開放大學 ）)i n
Beijing, the PRC in November 2004.
Disclosure required under Rule 13.51(2) of the Listing Rules
Save as disclosed above, to the best knowledge, information and belief of the Directors
having made all reasonable enquiries, there are no other matters in respect of the Directors that
are required to be disclosed pursuant to Rule 13.51(2)(a) to (v) of the Listing Rules, and there is
no other material matter relating to the Directors that needs to be brought to the attention of the
Shareholders.
DIRECTORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
Mr. Liu Haoqiong （ 劉皓瓊）, aged 53, is the Chairman and an executive Director of the
Company. Please see ‘‘Directors – Executive Directors ’’ in this section for his biographical
details.
Mr. Tseung Yat Ming （ 蔣一銘）, aged 38, is the Group ’sv i c ep r e s i d e n t .F r o mA u g u s t2 0 1 0
to June 2011, Mr. T seung worked as an analyst in Shanghai Mingyu Xiaoyang Investment
Management Co., Ltd.* （ 上海明渝霄陽投資管理有限公司 ）. From August 2011 to May 2021, he
worked in Shanghai Panhou Capital Management Co., Ltd.* （ 上海磐厚投資管理有限公司 ）as the
investment director. In June of 2021, he served as the secretary of the board of directors and
director of investor relations in Suzhou Basecare Medical Corporation Limited （ 蘇州貝康醫療股份
有限公司 ）, a company listed on the Stock Exchange (Stock Code: 02170). Mr. T seung joined
Zhonggan Communication in August 2021 as the vice president and is responsible for
overseeing corporate finance and capital market activities of the Group.
Mr. T seung graduated from East China Normal University （ 華東師範大學 ）in July 2007 with
a bachelor ’s degree in computer science and technology. He later obtained master ’sd e g r e ei n
economics from East China Normal University in June 2010.
JOINT COMPANY SECRETARIES
Mr. Liu Dingyi （ 劉鼎議
）was appointed as a joint company secretary of the Company by
the Board on 28 June 2023. Please see “Directors – Executive Directors ” in this section for Mr.
Liu’s biography.
Ms. Wong Wai Yee, Ella （ 黄慧兒） (‘‘Ms. Wong ’’) was appointed as a joint company
secretary of the Company on 28 June 2023. Ms. Wong is a director of Corporate Services
Division of Tricor Services Limited, a global professional services provider specialising in
integrated business, corporate and investor services.
Ms. Wong has over 20 years of experience in the corporate secretarial field and has been
providing professional corporate services to Hong Kong listed companies as well as
multinational, private and offshore companies. Ms. Wong is currently acting as the company
secretary or joint company secretary of a few listed companies on the Stock Exchange.
Ms. Wong is a Chartered Secretary, a Chartered Governance Professional and a Fellow of
both The Hong Kong Chartered Governance Institute (formerly known as (The Hong Kong
Institute of Chartered Secretaries) ( ‘‘HKCGI ’’) and The Chartered Governance Institute (formerly
known as The Institute of Chartered Secretaries a nd Administrators) in the United Kingdom. Ms.
Wong is a holder of the Practitioner ’s Endorsement from HKCGI. Ms. Wong obtained her
bachelor ’s degree in Economics from The University of Hong Kong and a Postgraduate Diploma
in Corporate Administration from the City University of Hong Kong.
DIRECTORS AND SENIOR MANAGEMENT
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BOARD COMMITTEES
The Company has established three board committees in accordance with the relevant
laws and regulations and the corporate governance practice under the Listing Rules, including
the Audit Committee, the Remuneration C ommittee and the Nomination Committee.
Audit Committee
The Audit Committee of the Company consists of three independent non-executive
Directors of the Company, namely Mr. Yu Shiyong, Mr. Zhu Yugang and Mr. Li Yinguo. Mr. Yu
Shiyong currently serves as the chairman of t he Audit Committee. The primary duties of the
Audit Committee are as follows:
1. to review significant financial policies o f the Group and their implementation, and
supervise the financial activities of the Group;
2. to review the financial information and relevant disclosures of the Group;
3. to consider and approve the risk management and internal control evaluation proposal
of the Group, and supervise and evaluate the risk management and internal control of
the Group;
4. to consider and approve the audit budget, remuneration of staff and appointment and
dismissal of major officers of the Group, supervise and evaluate the work of internal
audit of the Group and formulate the medium to long-term audit plan, annual working
plan and internal audit system setting plan of the Group as authorised by the Board,
and report to the Board;
5. to make recommendations to the Group, on the appointment, re-appointment and
removal of external auditor, and evaluate the report of the external auditor to ensure
that it undertakes its audit responsibilities;
6. to facilitate communications and monitor t he relationship between the internal audit
department and the external auditor;
7. to monitor the non-compliance of the Group in respect of the financial reports and the
risk management and internal control; and
8. other matters required by laws, regulations, regulatory documents, the rules of the
securities regulatory authority of the place where the Shares of the Company are
listed and the requirements of the Memorandum and the Articles of Association, and
as authorised by the Board.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 314 ---
Nomination Committee
The Nomination Committee of the Company consists of two independent non-executive
Directors, namely Mr. Yu Shiyong and Mr. Zhu Yugang and an executive Director, Mr. Liu Dingli.
Mr. Zhu Yugang currently serves as the chair man of the Nomination Committee. The primary
duties of the Nomination Committee are as follows:
1. to formulate procedures and standards for the election of Directors and senior
management and make recommendations to the Board on the proposed procedures
and standards;
2. to make recommendations to the Board on the nomination of candidates for Directors,
senior management and secretary of the Board;
3. to preliminarily examine the eligibil ity of candidates for Directors and senior
management;
4. to make recommendations to the Board on the nomination of candidates for chairmen
and members of the board committees; and
5. other matters required by laws, regulations, regulatory documents, the rules of the
securities regulatory authority of the place where the Shares of the Company are
listed and the requirements of the Memorandum and the Articles of Association, and
as authorised by the Board.
Remuneration Committee
The Remuneration Committee of the Company consists of two independent non-executive
Directors, namely Mr. Yu Shiyong and Mr. Li Yinguo and an executive Director, Mr. Peng
Shengqian. Mr. Li Yinguo currently serves as th e chairman of the Remuneration Committee. The
primary duties of the Remunera tion Committee are as follows:
1. to organise and formulate the remuneration policy and plan of Directors and senior
management and submit to the Board for approval, and propose the remuneration
distribution plan according to the performance evaluation of the Directors and senior
management and submit to the Board for approval; and
2. other matters required by laws, regulations, regulatory documents, the rules of the
securities regulatory authority of the place where the Shares of the Company are
listed and the requirements of the Memorandum and the Articles of Association, and
as authorised by the Board.
REMUNERATION AND COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
The Group offers the executive Directors and senior management, as its employees, with
remuneration in the form of salaries, allowances, benefits in kind, performance-related bonuses,
pensions, and other social insurance benefits. Independent non-executive Directors receive
compensation according to their duties (including serving as members or chairmen of the board
committees).
DIRECTORS AND SENIOR MANAGEMENT
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--- page 315 ---
For the years ended 31 December 2021, 2022 and 2023, the aggregate remuneration
before tax paid to the Directors (including of fees, salaries, discretionary bonuses, pension plan
contributions, welfare, heal thcare and other expenses) was approximately RMB2.3 million,
RMB2.5 million and RMB1.5 million, respectively. Under the arrangements currently in force, it is
estimated that the aggregate amount of remuneration of the Directors (including of fees,
salaries, discretionary bonuses, pension plan contributions, welfare, healthcare and other
expenses) for the year ending 31 December 2024 will be approximately RMB2.6 million.
The five highest paid individuals of the Group for the years ended 31 December 2021,
2022 and 2023 include three, three and two Directors respectively, whose emoluments are
included in the aggregate amount of fees, salaries, discretionary bonuses, pension plan
contributions, welfare, healthcare and other expenses paid to the relevant Directors as set out
above. For the years ended 31 December 2021, 2022 and 2023, the aggregate amount of fees,
salaries, discretionary bonuses, pension plan contributions, welfare, healthcare and other
expenses paid to the rem aining two, two and three individ uals were RMB0.5 million, RMB1.1
million and RMB0.9 million, respectively. Further details on the remuneration of the five highest
paid individuals during the Track Record Period are set out in the Accountants ’ Report in
Appendix I to this prospectus.
During the Track Record Period, none of the Di rectors waived any remuneration. Save as
disclosed above, during the Track Record Period, there were no other payments paid or payable
to the Directors or five highest paid individuals by the Company or any of its subsidiaries (i) as
an inducement to join or upon joining the Group o r (ii) for the loss of any office in connection
with the management of the affairs of any member of the Group.
For the details of the service contracts and appointment letters that entered into with the
Directors, Please refer to the section headed ‘‘C. Further Information about the Directors and
substantial shareholders – 1. Directors – (b) Particulars of service contracts agreements and
letters of appointment ’’in Appendix V to this prospectus.
BOARD DIVERSITY POLICY
The Company has adopted a board diversity policy which sets out the approach to achieve
and maintain diversity in the Board. Pursuant to the Company ’s board diversity policy, selection
of Board candidates will be based on a range of diversity perspectives, including but not limited
to gender, age, cultural and educ ational background, industry ex perience, technical capabilities,
professional qualifications and skills, knowledge, length of service and other related factors. The
Company will also consider its business model and special needs. The ultimate selection of
Director candidates will be based on merits of the candidates and contribution that the
candidates will bring to the Board.
The Nomination Committee is responsible for the implementation of the board diversity
policy. Upon completion of the Listing, the Nomi nation Committee will review the board diversity
p o l i c yf r o mt i m et ot i m et oe n s u r ei t sc o n t i n u e de f f e c t i v e n e s sa n dt h eC o m p a n yw i l ld i s c l o s et h e
implementation of the board diversity policy in its corporate governance report on an annual
basis.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 316 ---
COMPLIANCE ADVISER
The Company has appointed Zhongtai International Capital Limited as its compliance
adviser (the ‘‘Compliance Adviser ’’) upon the Listing in compliance with Rule 3A.19 of the
Listing Rules.
The Compliance Adviser will provide the Company with guidance and advice as to
compliance with the requirements under the Listing Rules. Pursuant to Rule 3A.23 of the Listing
Rules, the Company will consult with and, if necessary, seek advice from the Compliance
Adviser 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
different from that detailed in this prospectus or where the business activities,
development or results of the Group deviates from any forecast, estimate or other
information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry to the Company regarding unusual
movements in the price or trading volume of the Shares.
The term of appointment of the Compliance Adviser shall commence on the Listing Date
a n di se x p e c t e dt oe n do nt h ed a t eo nw h i c ht h eC o m p a n yc o m p l i e sw i t hR u l e1 3 . 4 6o ft h e
Listing Rules in respect of its financial results for the first full financial year commencing after
the Listing Date.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 317 ---
The following is a description of the authorised and issued share capital of the Company in
issue and to be issued as fully paid or credited as fully paid immediately before and following
the completion of the Capitalisation Issue and the Global Offering (without taking into account
any Shares which may be issued upon the exercise of the Over-allotment Option or any options
which may be granted under the Share Option Scheme):
Nominal value
(HK$)
Authorised share capital:
1 , 0 0 0 , 0 0 0 , 0 0 0 S h a r e so fH K $ 0 . 1e a c h ........................... 1 0 0 , 0 0 0 , 0 0 0
Issued and to be issued, fully paid or credited as fully paid:
1,011,251 Shares in issue as of the date of this prospectus . . . . . . . . 101,125.1
478,988,749 Shares to be issued pursuant to the Capitalisation Issue . . . 47,898,874.9
160,000,000 Shares to be issued under the Global Offering . . . . . . . . . . 16,000,000
640,000,000 Shares in total ................................ 6 4 , 0 0 0 , 0 0 0
ASSUMPTIONS
The above table assumes that the Global Offering becomes unconditional and the issue of
Shares pursuant to the Capitalisation Issue and the Global Offering are made. It takes no
account of any Shares which may be allotted and issued pursuant to the exercise of the Over-
allotment Option or any option which may be granted under the Share Option Scheme or any
Shares which may be issued or bought back by the Company pursuant to the general mandates
granted to the Directors to issue or buy back Shares as described below.
RANKINGS
The Offer Shares will be ordinary shares in the share capital of the Company and will carry
the same rights in all respects with all Shares in issue or to be issued as mentioned in this
prospectus and, in particular, will rank in full for all dividends or other distributions declared,
made or paid on the Shares in respect of a record date which falls after the date of this
prospectus save for the entitlement under the Capitalisation Issue.
MINIMUM PUBLIC FLOAT
According to Rule 8.08 of the Listing Rules, at the time of the Listing and at all times
thereafter, at least 25% of the total issued share capital of the Company shall be held by the
public (as defined in the Listing Rules).
SHARE CAPITAL
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--- page 318 ---
As each of Rui Da BVI (which is wholly-owned by Rui Da Xin T ao), Shu Zhi Cayman (which
is wholly-owned by Shu Zhi Shen Kong), Ying Hua BVI (which is wholly-owned by Ying Hua
Investment), You Po BVI (which is wholly-owned by You Po Investment) and Ms. Yeung will hold
less than 10% of the total issued share capital of the Company immediately following the
completion of the Capitalisation Issue and the Global Offering and each of them is independent
from and not connected with each other, they will not be considered as a substantial
shareholder of the Company upon completion of the Capitalisation Issue and the Global
Offering. Accordingly, the Shares held by each of Rui Da BVI, Shu Zhi Cayman, Ying Hua BVI,
You Po BVI and Ms. Yeung shall be considered as part of the public float for the purpose of
Rule 8.08 of the Listing Rules. Approximately 32.4% of the total issued capital of the Company
upon the Listing will be held by the public (as defined in the Listing Rules).
SHARE OPTION SCHEME
The Company has conditionally adopted the Share Option Scheme. The principal terms of
the Share Option Scheme are summarised in ‘‘Statutory and General Information – D. Share
Option Scheme ’’in Appendix V to this prospectus.
GENERAL MANDATE TO ALLOT AND ISSUE NEW SHARES
Subject to the Global Offering becoming unconditional, the Directors have been granted a
general mandate to allot, issue and deal with Shares in the share capital of the Company with a
total number of issued shares of not more than the sum of:
(1) 20% of the total number of Shares in issue immediately following the completion of
the Capitalisation Issue and the Global Offering (excluding Shares which may be
allotted and issued pursuant to the exercise of the Over-allotment Option or any
options which may be granted under the Share Option Scheme); and
(2) the total number of Shares bought back by the Company (if any) pursuant to the
general mandate to buy back Shares granted to the Directors referred to below.
The Directors may, in addition to the Shares which they are authorised to issue under this
general mandate, allot, issue or deal with Shares under a rights issue, scrip dividend scheme or
similar arrangement or on the exercise of any options which may be granted under the Share
Option Scheme.
This general mandate will remain in effect until the earliest of:
(i) the conclusion of the next annual general meeting of the Company; or
(ii) the expiration of the period within the next annual general meeting of the Company is
required by the Articles or any applicable laws to be held; or
(iii) the date on which such general mandate is varied or revoked by an ordinary
resolution of the Shareholders in general meeting.
Further information on this general mandate is set out in ‘‘Statutory and General
Information – A. Further Information about The Company – 5. Written resolutions of the
Shareholders passed on 17 June 2024 ’’in Appendix V to this prospectus.
SHARE CAPITAL
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--- page 319 ---
GENERAL MANDATE TO BUYBACK SHARES
Subject to the Global Offering becoming unconditional, the Directors have been granted a
general mandate to exercise all the powers of the Company to buy back Shares with a total
number of Shares of not more than 10% of the total number of Shares in issue immediately
following the completion of the Capitalisation Issue and the Global Offering (excluding Shares
which may be allotted and issued pursuant to th e exercise of the Over-allotment Option or any
options which may be granted under the Share Option Scheme).
This mandate only relates to buybacks made on the Stock Exchange or any other stock
exchange on which the Shares are listed (and which is recognised by the SFC and the Stock
Exchange for this purpose), and which are in accordance with the Listing Rules. A summary of
the relevant Listing Rules is set out in ‘‘Statutory and General Information – A. Further
Information about The Company – 7. Buyback by the Company of its own securities ’’ in
Appendix V to this prospectus.
This general mandate will remain in effect until the earliest of:
(i) the conclusion of the next annual general meeting of the Company; or
(ii) the expiration of the period within which the next annual general meeting of the
Company is required by the Articles or any applicable laws to be held; or
(iii) the date on which such general mandate is varied or revoked by an ordinary
resolution of the Shareholders in general meeting.
Further information on this general mandate is set out in ‘‘Statutory and General
Information – A. Further Information about The Company – 5. Written resolutions of the
Shareholders passed on 17 June 2024 ’’in Appendix V to this prospectus.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING ARE
REQUIRED
The Company has only one class of Shares, namely ordinary shares, each of which carries
the same rights as the other Shares.
As a matter of the Cayman Islands Companies Act, an exempted company is not required
by law to hold any general meeting or class meeting. The holding of general meeting or class
meeting is prescribed under the articles of association of a company. Accordingly, the Company
will hold general meetings as prescribed under the Articles, a summary of which is set out in
‘‘Summary of the constitution of the Company and Cayman Islands Companies Act ’’in Appendix
IV to this prospectus.
SHARE CAPITAL
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--- page 320 ---
So far as the Directors are aware, the following persons will, immediately prior to and
following the completion of the Capitalisation Issue and the Global Offering (without taking into
account any Shares which may be issued pursuant to the exercise of the Over-allotment Option
or any options which may be granted under the Share Option Scheme), have interests or short
positions in the Shares or underlying Shares which would be required to be disclosed under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested
in 10% or more of the issued voting shares of the Company:
Name of Shareholder Nature of interest
Shares held as of the date of
this prospectus and
immediately prior to the
completion of the
Capitalisation Issue and the
Global Offering (1)
Shares held immediately
following the completion of
the Capitalisation Issue and
the Global Offering (1)
Number of
Shares (1)
Approximate
percentage
(%)
Number of
Shares (1)
Approximate
percentage
(%)
GT & Yangtze . . . . . . . . Beneficial owner 757,268 (L) 74.88 359,444,530 (L) 56.16
Mr. Liu Haoqiong . . . . . . Interest in controlled
corporation (2)
757,268 (L) 74.88 359,444,530 (L) 56.16
M s .T a oX i u l a n ........ I n t e r e s ti nc o n t r o l l e d
corporation (2)
757,268 (L) 74.88 359,444,530 (L) 56.16
Notes:
(1) The letter ‘‘L’’denotes the person ’s long position in the Shares.
(2) GT & Yangtze is owned as to 70.0% by Mr. Liu Haoqiong and 30.0% by Ms. T ao Xiulan, the spouse of Mr.
Liu Haoqiong. By virtue of the SFO, Mr. Liu Haoqiong and Ms. T ao Xiulan are deemed to be interested in
the Shares held by GT & Yangtze.
If the Over-allotment Option is fully exercised, the interest of GT & Yangtze in the Shares
will be approximately 54.13%.
Except as disclosed in this prospectus, the Directors are not aware of any person who will,
immediately following the completion of the Capitalisation Issue and the Global Offering (without
taking into account any Shares which may be issued pursuant to the exercise of the Over-
allotment Option or any options which may be granted under the Share Option Scheme), have
beneficial interests or short positions in any Shares or underlying Shares, which would be
required to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who
is, directly or indirectly interested in 10% or more of the issued voting shares of any member of
the Group. The Directors are not aware of any arrangement which may at a subsequent date
result in a change of control of the Company.
SUBSTANTIAL SHAREHOLDERS
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You should read this section in conjunction with the historical financial
information of the Group, including the notes thereto, as set out in the Accountants ’
Report set out in Appendix I to this prospectus (the ‘‘Historical Financial Information ’’).
The Historical Financial Information has been prepared in accordance with the HKFRSs.
You should read the entire Accountants ’ Report and not merely rely on the information
contained in this section.
The following discussion and analysis conta ins certain forward-looking statements
that reflect the current views with respect to future events and financial performance.
These statements are based on assumptions and analyses made by the Group in light
of the experience and perception of histori cal trends, current conditions and expected
future developments of the Group, as well as other factors the Group believes are
appropriate under the circumstances. However, whether actual outcomes and
developments will meet the expectations a nd projections depend on a number of risks
and uncertainties over which the Group does not have control. Please refer to the
section headed ‘‘Risk Factors ’’for details.
Discrepancies between totals and sums o f amounts listed herein in any table or
elsewhere in this prospectus may be due to rounding.
OVERVIEW
Established in 2002, the Group is a reputable integrated service provider and software
developer in Jiangxi Province with particular focus on the provision of T elecommunications
Infrastructure Services and Digitalisation Solution Services. Since its founding, it has established
long and stable business relationships with the key players in the telecommunications industry
including the Big Three, being the three largest telecommunications network operators in the
PRC, and the largest telecommunications tower infrastructure service provider in the world.
According to the Ipsos Report, the Group ranked third amongst all telecommunications network
infrastructure construction and maintenance services companies in Jiangxi Province in terms of
revenue in 2023, with a market share of approximately 3.1%.
T elecommunications Infrastructure Services p rovided by the Group comprise Infrastructure
Construction Services and Infrastructure Mai ntenance Services and are mainly provided to
telecommunications network operators. Infrastructure Construction Services mainly involve the
construction of telecommunications networks and the supporting infrastructure including the
construction of base stations, the configuration of telecommunications equipment, the laying of
cables, the construction of electricity generatio n facilities and foundation works. Infrastructure
Maintenance Services mainly involve routine basic maintenance and repairs and restoration
works for the telecommunications networks as well as emergency troubleshooting in the event of
network failure in order to ensure the reliability and stability of the overa ll telecommunications
network. These services are essential for telecommunications operators to ensure their business
to run smoothly while also improving the service quality and user experience of the
telecommunications network.
FINANCIAL INFORMATION
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Since 2018, the Group has been providing Digitalisation Solution Services to customers
including telecommunications network operators and local governments, quasi-government
institutions, state-owned enterprises and private companies in the PRC. The Digitalisation
Solution Services provided by the Group comprise Integrated Solution Services, System
Maintenance Services and Software Solution Services. The Digitalisation Solution Services
provided by the Group generally involve the provision of turnkey and other solutions
encompassing system design, software developm ent, installation, implementation and
commissionings for use in infrastructure digitalisation related projects which cover various
sectors such as digital healthcare, digital educ ation, digital surveillance, digital government,
digital industrial management and digital urban management, etc. For Integrated Solution
Services, the Group provides and integrates hardware and software, while for Software Solution
Services, the Group provides and integrates software only. T o complement the Integrated
Solution Services, the Group also provides commissioned System Maintenance Services to
ensure the proper functioning of the hardware and software systems.
BASIS OF PRESENTATION AND PREPARATION
The Company was incorporated in the Cayman Islands on 20 April 2022 as an exempted
company with limited liability under the Cayma n Islands Companies Act. The Company is an
investment holding company and has not carried on any business since the date of its
incorporation save for the group reorganisation mentioned below.
Prior to the incorporation of the Company and completion of the group reorganisation
mentioned below, the principal activities of the Group were carried out by Zhonggan
Communication and its subsidiaries. T o rationalise the corporate structure in preparation of the
Listing, the Group underwent the group reorganisation, as detailed in the section headed
‘‘History and Reorganisation ’’in the Prospectus (the ‘‘Reorganisation ’’). On 25 August 2022, the
Company became the holding company of the companies now comprising the Group.
The Reorganisation only involved inserting newly formed investment entities with no
substantive operations as holding companies of Zhonggan Communication, and there were no
changes in the economic substance of the ownership, business and operations of the Group
before and after the Reorganisation. Accordingly, the Historical Financial Information has been
prepared and presented as a continuation of the consolidated financial statements of Zhonggan
Communication with the assets and liabilitie s of Zhonggan Communication recognised and
measured at their historical carrying amounts prior to the Reorganisation. Intra-group balances,
transactions and unrealised gains/losses on intra-group transactions are eliminated in full in
preparing the Historical Financial Information.
FINANCIAL INFORMATION
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CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
The consolidated financial information of the Group has been prepared in accordance with
all applicable HKFRSs accounting policies. The material accounting policy information adopted
b yt h eG r o u pa r es e tf o r t hi nn o t e2o ft h eA c c o u n t a n t s ’ Report set out in Appendix I to this
prospectus. Some of the accounting policies involve judgments, estimates and assumptions
made by the Group ’s management. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant, please refer to note 3
of the Accountants ’ Report for details. When reviewing the Group ’s financial statements, the
prospective investors should consider: (i) the Group ’s selection of material accounting policies;
(ii) the judgments and other uncertainties affecting the application of such policies; and (iii) the
sensitivity of reported results to changes in conditions and assumptions.
The HKICPA has issued a number of new and revised HKFRSs. For the purpose of
preparing this Historical Financial Information, the Group has adopted all applicable new and
revised HKFRSs to the Track Record Period consistently throughout the Track Record Period.
The revised and new accounting standards and interpretations issued but not yet effective for
the accounting period beginning on 1 January 2023 are set out in note 31 of the Accountants ’
Report in Appendix I to this prospectus.
Critical account ing policies
Set out below are details related to certain material accounting policy information of the
Group:
1. Revenue recognition
Revenue is recognised when the Group satisfies a performance obligation in a contract. A
performance obligation represents a distinct good or service that is transferred by the Group to
the customer, and is satisfied when the custome r obtains control over that distinct a good or
service. The Group recognises revenue at the amount of promised consideration to which the
Group is expected to be entitled, excluding those amounts collected on behalf of third parties.
Revenue excludes value added tax or other sales taxes and is after deduction of any trade
discounts.
Revenue is recognised over time by reference to the progress towards complete
satisfaction of the relevant performance obligation if one of the following conditions is met: (i)
the customer simultaneously receives and consumes the benefits provided by the Group ’s
performance as the Group performs; (ii) the customer is able to control goods in the progress
during the Group ’s performance; (iii) the Group ’s performance does not create an asset with an
alternative use to the Group and the Group has an enforceable right to payment for performance
completed to date. Otherwise, revenue is recognised at a point of time when the customer
obtains control over the relevant goods or services.
FINANCIAL INFORMATION
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Where the contract contains a financing component which provides a significant financing
benefit to the customer, the Group adjusts the promised amount of consideration for the effects
of time value of money by using a discount rate that would be reflected in a separate financing
transaction with the customer and interest income is accrued separately under the effective
interest method. Where the contract contains a financing component which provides a significant
financing benefit to the Group, revenue recognised under that contract includes the interest
expense accreted on the contract liability under the effective interest method. The Group takes
advantage of the practical expedient in paragraph 63 of HKFRS 15 and does not adjust the
consideration for any effects of a significant financing component if the period of financing is 12
months or less.
Further details of the Group ’s revenue recognition policies are as follows:
(a) Provision of Infrastruc ture Construction Services
The Group recognises revenue from provision of Infrastructure Construction Services
over time because the Group ’s construction activities creat e or enhance assets controlled
by the customers. The Group adopts the input method to measure performance progress
and revenue is recognised based on the proportion of the actual costs incurred relative to
the estimated total costs. Where the performance progress cannot be determined
reasonably, revenue is recognised based on the amount of cost that is expected to be
compensated based on the cost already incurred, until the performance progress can be
reasonably determined.
The likelihood of the Group suffering settlement amount adjustments resulting from
final completion inspection and project settlement audit are taken into account in making
these estimates, such that revenue is only recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not
occur. The Group applies the most likely amount approach to estimate such variable
consideration by considering the single most likely amount in a limited range of possible
consideration amounts, taking into account the Group ’s current progress and adjustment
rates over historical periods.
(b) Provision of Digitalisation Solution Services
In this business model, the Group provides the following three types of services based
on customers ’ needs:
(i) Integrated Solution Services
The Group designs and provides integrated IT solutions for the customers by
integrating different hardware and software based on the service specifications of the
customers. The Group develops the integrated IT solutions at the sites designated by
the customers. As the Group ’s performance creates or enhances assets that the
customers control as the Group performs, the Group recognises revenue over time.
The Group adopts the input method to measure performance progress and revenue is
recognised based on the proportion of the actual costs incurred relative to the
estimated total costs. Where the performance progress cannot be determined
FINANCIAL INFORMATION
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reasonably, revenue is recognised based on the amount of cost that is expected to be
compensated based on the cost already incurred, until the performance progress can
be reasonably determined.
(ii) System Maintenance Services
The Group offers optional System Maintenance Services to provide on-site
support to the customers of the Integrated Solution Services. If the customer chooses
to purchase System Maintenance Services, the Group allocates the transaction price
to the Integrated Solution Services and System Maintenance Services based on their
relative stand-alone selling prices. As the Group does not sell the System
Maintenance Services separately, it uses expected cost plus a margin approach to
estimate the stand-alone selling price of the System Maintenance Services. Revenue
from the System Maintenance Services is r ecognised over time on a straight-line
basis as the customer simultaneously receives and consumes the benefits as the
Group performs and the Group ’s efforts are expended evenly during the on-site
support period.
(iii) Software Solution Services
In this service type, the Group grants a licence to customers which allows them
to use the software developed by the Group. As the software has standalone
functionality and the Group will not undertake future activities that will significantly
change the functionality of the software, the Group recognises revenue from the
software licensing at a point in time when th e customers are able to use the software.
(c) Provision of Infrastruc ture Maintenance Services
The Group provides maintenance and repair to fix and rectify technical issues of
infrastructure owned by third parties within contracted period. Revenue from maintenance
and repair service is recognised over the scheduled period on a straight-line basis because
the customer simultaneously receives and consumes the benefits provided by the Group.
Additionally, the Group provides emergency and sporadic repair and maintenance
service for customers case by case, the Group recognises revenue upon the completion of
the emergency and sporadic service because the service is completed within one day.
FINANCIAL INFORMATION
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2. Contract assets and contract liabilities
A contract asset is recognised when the Group recognises revenue before being
unconditionally entitled to the consideration under the payment terms set out in the contract.
Contract assets are assessed for ECLs and are transferred to trade receivables when the right
to the consideration has become unconditional. For Infrastructure Construction Services
projects, the Group generally recognises contract assets and corresponding revenue based on
work progress. Upon issuance of invoices for the progress payment, the relevant portion of
contract assets is transferred to trade receivables. Upon completion of settlement audit by its
customers, the entitlement to the remaining consideration for the projects becomes
unconditional. Meaning that the Group has fulfilled its obligations under the contract and is
entitled to receive payment from its customers. A t this point, the remaining portion of contract
assets is transferred to trade receivables.
A contract liability is recognised when the customer pays consideration before the Group
recognises the related revenue. A contract liab ility would also be recogn ised if the Group has an
unconditional right to receive consideration before the Group recognises the related revenue. In
such cases, a corresponding receivable would also be recognised.
For a single contract with the customer, either a net contract asset or a net contract liability
is presented. For multiple con tracts, contract assets and contract liabilities of unrelated
contracts are not presented on a net basis.
Critical accounting estimates and judgements
Set out below are details related to certain critical accounting estimates and judgements of
the Group:
1. Loss allowances of trade receivables and contract assets
Loss allowances for trade receivables and contract assets is estimated by the Group
through assessing the ECLs. This requires th e use of estimates and judgements. ECLs are
b a s e do nt h eG r o u p’s historical credit loss experience, adjusted for factors that are specific to
the debtors and an assessment of both the current and forecasted general economic conditions
at the end of each Track Record Period. The Group keeps assessing the expected credit loss of
trade receivables and contract assets during their expected lives.
2. Recognition of deferred tax assets
Deferred tax assets are recognised in respect of deductible temporary differences. As
those deferred tax assets can only be recognised to the extent that it is probable that future
taxable profits will be available against which the deductible temporary differences can be
utilised, management ’s judgement is required to assess the probability of future taxable profits.
The Group ’s management ’s assessment is revised as necessary and additional deferred tax
assets are recognised if it becomes probable that future taxable profits will allow the deferred
tax asset to be recovered.
FINANCIAL INFORMATION
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KEY FACTORS AFFECTING RESULTS OF OPERATIONS
The Group ’s results of operations and financial condition have been and will continue to be,
affected by a number of factors, which primarily include the following:
Market conditions and trends in the telecommunications industry and overall economy in
the PRC
The Group ’s operations and management are currently located in the PRC as such its
business is subject to the overall macro-economic conditions in the PRC as well as other factors
which drive the growth in demand for T eleco mmunications Infrastr ucture Services and
Digitalisation Solution Services such as the rate of urbanisation and rural development, end
consumer demand for mobile services and technology and demand for digitalisation and IoT
devices. The aforementioned facto rs together with the PRC Government ’s spending patterns will
likely affect the availability of T elecommunicati ons Infrastructure Services and Digitalisation
Solution Services projects in th e PRC as well as the future growth a nd level of profitability of the
Group. Aside, policy changes by the PRC Government whether they relate to taxation, interest
rates or otherwise may also affect the level of act ivity in the industry as well as the availability of
capital. An occurrence of recession in the PRC, deflation or any changes in the PRC ’sc u r r e n c y
policy may also have an adverse effect upon the Group ’s business, financial condition and
results of operations.
Non-recurring nature of the Group ’sp r o j e c t s
The services provided by the Group during the Track Record Period were generally offered
on a project-by-project basis with no long term commitments from its customers to further
engage the Group for similar related types of work and the Group had a total of 78 On-going
Projects and 52 Pre-revenue Projects as at the Latest Practicable Date. Accordingly, the Group ’s
projects were non-recurring in nature and upon completion of these projects on hand, there is no
guarantee that the Group ’s existing customers will award any further projects to the Group.
Given the non-recurring nature of the Group ’s projects, in order for the Group to maintain
its level of revenue or achieve revenue growth, the Group would have to obtain new projects.
There is no guarantee that the Group will be able to secure new projects from its current
customers or attract new customers. In the event that there is a significant decrease in the
number of projects or scale in terms of contract value of the projects awarded by the Group ’s
customers, the Group ’s revenue or profit may decrease and its business, financial condition and
results of operations may be adversely affected.
FINANCIAL INFORMATION
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Accuracy in the estimation of project time an d costs at the project identification stage
The Group ’s projects are typically awarded by the Group ’s customers vi a a competitive
tender process. In determining the offer price, the Group would conduct a feasibility study
having taken into account the possible costs and time required based on the information
specified in the tender invitation documents as well as the Group ’s own required margins.
However, the actual time and costs incurred in the Group ’s projects may be adversely affected
by a series of factors, some of which may be beyond its control, such as: (i) unanticipated
geological conditions; ( ii) unfavourable weather conditions; (iii) availability of workers; and (iv)
unforeseen disputes with customers, suppliers and other relevant parties. Accordingly, the
Group cannot guarantee that the actual cost and time incurred for any given project would be
consistent with its initial estimates and where t he Group has inaccurately estimated the costs
and time required for any project, it may be required to bear the costs of such cost increases
and delays which in turn would affect its profitability and expose it to claims from customers. In
the event that the Group ’s actual costs significantly exceeds its estimated costs and any price
adjustments is not adequate to cover the increased costs, the Group ’s financial condition and
results of operations could be materially and adversely affected.
Fluctuations in the Group ’s labour procurement costs
During the Track Record Period, the Group would generally engage labour suppliers to
supply workers and to perform or to assist the Group in performing labour intensive works in
respects of its projects. The Group employs the use of labour suppliers as its projects are
located across different areas of the PRC and thus the use of labour suppliers alleviates the
need by the Group to maintain a large pool of workers and allows the Group to achieve greater
cost savings and increase its profitability.
The Group ’s labour procurement costs represented the largest component of the its cost of
sales for the years ended 31 December 2021, 2022 and 2023 accounting for approximately
78.4%, 91.5% and 89.5% respectively. Accordingly, fluctuations in the Group ’s labour
procurement costs directly impact the Group ’s operational and financial results. In general, the
Group would enter into framework agreements with its labour suppliers which would be valid for
one year, however these framework agreements merely set out the basic terms of their
engagement. Rather, a separate work order would be required to engage the relevant labour
suppliers and the fees charged by the Group ’s labour suppliers would vary based on the nature
and complexity of the work involved, duratio n and number of as well as the availability of
workers.
FINANCIAL INFORMATION
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The following sensitivity analysis illustrates t he impact of hypothetical fluctuations in the
Group ’s labour procurement costs on its profit before tax during the Track Record Period,
assuming all other variables, including the Group ’s revenue remains constant. Fluctuations in
the Group ’s labour procurement costs are included in the Group ’s total cost of sales and are set
at 5%, 10% and 15% having taken into account historical fluctuations.
Hypothetical fluctuations -15% -10% -5% +5% +10% +15%
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Change in labour procurement costs
Y e a re n d e d3 1D e c e m b e r2 0 2 1.............. ( 4 5 , 6 0 4 ) ( 3 0 , 4 0 3 ) ( 1 5 , 2 0 1 ) 1 5 , 2 0 1 3 0 , 4 0 3 4 5 , 6 0 4
Y e a re n d e d3 1D e c e m b e r2 0 2 2.............. ( 4 2 , 4 6 7 ) ( 2 8 , 3 1 2 ) ( 1 4 , 1 5 6 ) 1 4 , 1 5 6 2 8 , 3 1 2 4 2 , 4 6 7
Y e a re n d e d3 1D e c e m b e r2 0 2 3.............. ( 6 1 , 7 6 5 ) ( 4 1 , 1 7 7 ) ( 2 0 , 5 8 8 ) 2 0 , 5 8 8 4 1 , 1 7 7 6 1 , 7 6 5
Change in profit before tax
Y e a re n d e d3 1D e c e m b e r2 0 2 1.............. 4 5 , 6 0 4 3 0 , 4 0 3 1 5 , 2 0 1 ( 1 5 , 2 0 1 ) ( 3 0 , 4 0 3 ) ( 4 5 , 6 0 4 )
Y e a re n d e d3 1D e c e m b e r2 0 2 2.............. 4 2 , 4 6 7 2 8 , 3 1 2 1 4 , 1 5 6 ( 1 4 , 1 5 6 ) ( 2 8 , 3 1 2 ) ( 4 2 , 4 6 7 )
Y e a re n d e d3 1D e c e m b e r2 0 2 3.............. 6 1 , 7 6 5 4 1 , 1 7 7 2 0 , 5 8 8 ( 2 0 , 5 8 8 ) ( 4 1 , 1 7 7 ) ( 6 1 , 7 6 5 )
Fluctuations in the Group ’s finance costs
The Group ’s operations were mainly financed by bank borrowings during the Track Record
Period. The Group ’s finance costs during the Track Record Period mainly comprised interest
expenses on borrowings and finance leases. For the years ended 31 December 2021, 2022 and
2023 the Group ’s finance costs amounted to approxima tely RMB11.5 million, RMB15.3 million
and RMB16.7 million, respectively.
The following sensitivity analysis illustrates t he impact of hypothetical fluctuations in the
Group ’s finance costs on its profit before tax during the Track Record Period, assuming all other
variables remain constant. Fluctuations in the Group ’s finance costs are set at 5%, 10% and
15% having taken into account the historical fluctuations.
Hypothetical fluctuations -15% -10% -5% +5% +10% +15%
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Change in finance cost
Y e a re n d e d3 1D e c e m b e r2 0 2 1.............. ( 1 , 7 2 2 ) ( 1 , 1 4 8 ) ( 5 7 4 ) 5 7 4 1 , 1 4 8 1 , 7 2 2
Y e a re n d e d3 1D e c e m b e r2 0 2 2.............. ( 2 , 3 0 0 ) ( 1 , 5 3 3 ) ( 7 6 7 ) 7 6 7 1 , 5 3 3 2 , 3 0 0
Y e a re n d e d3 1D e c e m b e r2 0 2 3.............. ( 2 , 5 0 2 ) ( 1 , 6 6 8 ) ( 8 3 4 ) 8 3 4 1 , 6 6 8 2 , 5 0 2
Change in profit before tax
Y e a re n d e d3 1D e c e m b e r2 0 2 1.............. 1 , 7 2 2 1 , 1 4 8 5 7 4 ( 5 7 4 ) ( 1 , 1 4 8 ) ( 1 , 7 2 2 )
Y e a re n d e d3 1D e c e m b e r2 0 2 2.............. 2 , 3 0 0 1 , 5 3 3 7 6 7 ( 7 6 7 ) ( 1 , 5 3 3 ) ( 2 , 3 0 0 )
Y e a re n d e d3 1D e c e m b e r2 0 2 3.............. 2 , 5 0 2 1 , 6 6 8 8 3 4 ( 8 3 4 ) ( 1 , 6 6 8 ) ( 2 , 5 0 2 )
FINANCIAL INFORMATION
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RESULTS OF OPERATIONS
The following table summarises the Group ’s consolidated statements of profit or loss for the
Track Record Period, extracted from the Accountants ’ Report in Appendix I to this prospectus.
Year ended 31 December
2021 2022 2023
RMB’000 RMB ’000 RMB ’000
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,118 413,091 609,301
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (387,930) (309,453) (459,982)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,188 103,638 149,319
O t h e rn e ti n c o m e .................................... 5 , 8 5 0 4 , 7 5 0 5 , 0 1 8
S e l l i n ge x p e n s e s .................................... ( 5 , 0 8 0 ) ( 3 , 4 3 6 ) ( 3 , 2 9 8 )
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,351) (33,000) (38,474)
Research and development expenses. . . . . . . . . . . . . . . . . . . . . . (19,208) (17,680) (25,873)
Profit from operations ............................... 5 2 , 3 9 9 5 4 , 2 7 2 8 6 , 6 9 2
F i n a n c ec o s t s ...................................... ( 1 1 , 4 8 0 ) ( 1 5 , 3 3 2 ) ( 1 6 , 6 8 2 )
Profit before taxation ................................ 4 0 , 9 1 9 3 8 , 9 4 0 7 0 , 0 1 0
I n c o m et a x ........................................ ( 4 , 7 4 6 ) ( 3 , 9 6 5 ) ( 1 , 3 3 9 )
Profit for the year .................................. 36,173 34,975 68,671
Attributable to:
Equity shareholders of the Company . . . . . . . . . . . . . . . . . . . . . . 36,173 34,473 68,592
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 502 79
36,173 34,975 68,671
FINANCIAL INFORMATION
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DESCRIPTION OF SELECTED ITEMS IN THE CONSOLIDATED STATEMENTS OF PROFIT
OR LOSS
Revenue
The following table sets forth a breakdown of the Group ’s revenue by business segments
during the Track Record Period:
Year ended 31 December
2021 2022 2023
Revenue % of total Revenue % of total Revenue % of total
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ........................ 3 4 4 , 6 3 1 7 1 . 9 % 3 0 9 , 2 7 6 7 4 . 9 % 4 6 3 , 3 6 7 7 6 . 0 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ........................ 2 5 , 1 6 0 5 . 3 % 3 3 , 2 2 4 8 . 0 % 3 7 , 9 9 0 6 . 2 %
S u b - t o t a l ........................................... 369,791 77.2% 342,500 82.9% 501,357 82.2%
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s ............................. 1 0 7 , 3 6 4 2 2 . 4 % 1 0 , 1 4 8 2 . 5 % 4 1 , 2 5 8 6 . 8 %
– S y s t e mM a i n t e n a n c eS e r v i c e s ............................ 1 , 9 6 3 0 . 4 % 2 , 0 4 4 0 . 5 % 4 7 0 0 . 1 %
– S o f t w a r eS o l u t i o nS e r v i c e s .............................. –– 58,399 14.1% 66,216 10.9%
S u b - t o t a l ........................................... 109,327 22.8% 70,591 17.1% 107,944 17.8%
Total ............................................. 479,118 100.0% 413,091 100.0% 609,301 100.0%
During the Track Record Period , the revenue from the T elecommunications Infrastructure
Services business segment, comprising the In frastructure Construction Services and
Infrastructure Maintenance Services busines s sub-segments, accounted for approximately
77.2%, 82.9% and 82.2% of the Group ’s total revenue for the years ended 31 December 2021,
2022 and 2023, respectively. The revenue from the Digitalisation Solution Services business
segment, comprising Integrated Solution Services, System Maintenance Services and Software
Solution Services business sub-segments, accounted for approximately 22.8%, 17.1% and
17.8% of the Group ’s total revenue for the years ended 31 December 2021, 2022 and 2023,
respectively.
The Group ’s revenue decreased from approximately RMB479.1 million for the year ended
31 December 2021 to approxim ately RMB413.1 million for the year ended 31 December 2022
and increased to approximately RMB609.3 m illion for the year ended 31 December 2023.
Overall for the period from the year ended 31 December 2021 to the year ended 31 December
2023, the Group ’s revenue grew at a CAGR of approximately 12.8%.
FINANCIAL INFORMATION
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Cost of sales
The Group ’s cost of sales during the Track Record Period primarily comprised labour
procurement costs, direct material costs and direct labour costs. The following table sets out a
breakdown of the Group ’s cost of sales during the Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
L a b o u rp r o c u r e m e n tc o s t s ................................ 3 0 4 , 0 2 6 7 8 . 4 % 2 8 3 , 1 1 7 9 1 . 5 % 4 1 1 , 7 6 7 8 9 . 5 %
D i r e c tm a t e r i a lc o s t s................................... 5 6 , 6 0 9 1 4 . 6 % 7 , 9 5 2 2 . 6 % 2 9 , 1 8 3 6 . 3 %
D i r e c tl a b o u rc o s t s.................................... 1 2 , 9 9 7 3 . 4 % 1 1 , 6 1 8 3 . 8 % 9 , 3 9 6 2 . 0 %
T e c h n i c a ls e r v i c ef e e s.................................. 4 , 2 1 7 1 . 1 % 1 , 6 5 1 0 . 5 % 2 , 8 2 6 0 . 6 %
I n s t a l l a t i o ns e r v i c ef e e s................................. 4 , 1 1 0 1 . 1 % –– 917 0.2%
O f f i c ee x p e n s e s...................................... 1 , 9 2 4 0 . 5 % 1 , 6 5 7 0 . 5 % 1 , 7 8 7 0 . 4 %
F u e le x p e n s e s....................................... 1 , 7 5 8 0 . 4 % 1 , 9 8 4 0 . 6 % 3 , 1 4 0 0 . 7 %
T a xa n ds u r c h a r g e s .................................... 1 , 3 4 3 0 . 3 % 4 9 5 0 . 2 % 8 5 7 0 . 2 %
O t h e r s............................................ 9 4 6 0 . 2 % 9 7 9 0 . 3 % 1 0 9 0 . 1 %
Total ............................................. 387,930 100.0% 309,453 100.0% 459,982 100.0%
Labour procurement costs mainly represented charges and fees paid to labour suppliers
who provided the necessary labour for the completion of the Group ’s T elecommunications
Infrastructure Services projects located across different areas of the PRC. By engaging labour
suppliers that are based in different regions across the PRC, the Group can streamline and
minimise its labour force and reduce the burden in maintaining significant labour force. Further,
through the use of labour suppliers for labour intensive works, the Group can focus its resources
on more complex tasks, such as project management and quality control, thus improving its
operational efficiency. The Group ’s labour procurement cost represented the largest component
of the Group ’s cost of sales and accounted for approximately 78.4%, 91.5% and 89.5% of its
total cost of sales for the years ended 31 December 2021, 2022 and 2023, respectively.
Direct material costs primarily represented the hardware and software used in the Group ’s
Digitalisation Solution Services business segment. The direct material costs represented the
second largest component of the Group ’s cost of sales and accounted for approximately 14.6%,
2.6% and 6.3% of its cost of sales for the years ended 31 December 2021, 2022 and 2023,
respectively. The significant decrease in the contribution from direct material costs to the total
cost of sales in 2022 was mainly due to the Group ’s prioritisation of Software Solution Services
projects over Integrated Solution Services projects, considering the customers ’ demand and the
limited resources available during that period. Therefore, no significant costs for hardware were
incurred for the projects.
Direct labour costs primarily represented the salaries, discretionary bonus, allowance and
contributions to defined contributio n plans paid to the members of the Group ’sp r o j e c t
management team who were involved in the Group ’s T elecommunications Infrastructure
Services projects. The direct labour costs represented the third largest component of the
Group ’s cost of sales and accounted for approximately 3.4%, 3.8% and 2.0% of its cost of sales
for the years ended 31 December 2021, 2022 and 2023, respectively.
FINANCIAL INFORMATION
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--- page 333 ---
The following table sets out a breakdown of the Group ’s cost of sales during the Track
Record Period by business segments:
Year ended 31 December
2021 2022 2023
Cost of
sales % of total
Cost of
sales % of total
Cost of
sales % of total
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
Infrastructure Construction Services
L a b o u rp r o c u r e m e n tc o s t s ................................ 2 9 2 , 0 4 7 7 5 . 3 % 2 6 4 , 5 4 9 8 5 . 4 % 3 9 1 , 0 9 8 8 5 . 0 %
D i r e c tl a b o u rc o s t s.................................... 6 , 2 9 5 1 . 6 % 5 , 3 9 2 1 . 7 % 4 , 7 1 2 1 . 0 %
O f f i c ee x p e n s e s...................................... 1 , 7 6 2 0 . 5 % 1 , 1 8 7 0 . 4 % 1 , 6 8 6 0 . 4 %
D i r e c tm a t e r i a lc o s t s................................... 1 , 0 7 6 0 . 3 % 2 0 6 0 . 1 % ––
F u e le x p e n s e s....................................... 8 8 – 185 0.1% 39 –
O t h e r s............................................ 1 , 4 7 6 0 . 4 % 8 0 9 0 . 3 % 8 1 4 0 . 2 %
S u b - t o t a l ........................................... 302,744 78.1% 272,328 88.0% 398,349 86.6%
Infrastructure Maintenance Services
L a b o u rp r o c u r e m e n tc o s t s ................................ 1 1 , 9 8 0 3 . 1 % 1 8 , 5 6 7 5 . 9 % 2 0 , 6 7 0 4 . 5 %
D i r e c tl a b o u rc o s t s.................................... 6 , 7 0 2 1 . 7 % 5 , 7 3 6 1 . 9 % 4 , 6 8 3 1 . 0 %
F u e le x p e n s e s....................................... 1 , 6 7 0 0 . 4 % 1 , 7 9 9 0 . 6 % 3 , 1 0 1 0 . 7 %
O f f i c ee x p e n s e s...................................... 1 6 2 – 470 0.2% 101 –
D i r e c tm a t e r i a lc o s t s................................... 8 7 – 185 0.1% 288 0.1%
O t h e r s............................................ 1 6 7 – 583 0.2% ––
S u b - t o t a l ........................................... 20,768 5.2% 27,340 8.9% 28,843 6.3%
Digitalisation Solution Services
Integrated Solution Services
D i r e c tm a t e r i a lc o s t s( H a r d w a r e ) ........................... 4 9 , 1 1 7 1 2 . 7 % 5 , 9 3 9 1 . 9 % 2 3 , 6 4 1 5 . 1 %
D i r e c tm a t e r i a lc o s t s( S o f t w a r e ) ............................ 6 , 3 2 8 1 . 6 % 1 , 6 2 2 0 . 5 % 1 , 0 4 8 0 . 2 %
I n s t a l l a t i o ns e r v i c ef e e s................................. 4 , 1 1 0 1 . 1 % –– 917 0.2%
T e c h n i c a ls e r v i c ef e e s.................................. 2 , 5 6 6 0 . 7 % –– 2,535 0.5%
O t h e r s............................................ 6 4 0 0 . 2 % 1 2 – 59 0.0%
S u b - t o t a l ........................................... 62,761 16.3% 7,573 2.4% 28,200 6.0%
System Maintenance Services
T e c h n i c a ls e r v i c ef e e s.................................. 1 , 6 5 1 0 . 4 % 1 , 6 5 1 0 . 5 % 2 9 1 0 . 1 %
O t h e r s............................................ 6 – 2 – 1 –
S u b - t o t a l ........................................... 1,657 0.4% 1,653 0.5% 292 0.1%
Software Solution Services
D i r e c tl a b o u rc o s t s.................................... –– 489 0.2% ––
O t h e r s............................................ –– 70 – 92 –
D i r e c tm a t e r i a lc o s t s( S o f t w a r e ) ............................ –––– 4,207 1.0%
S u b - t o t a l ........................................... –– 559 0.2% 4,299 1.0%
Total ............................................. 387,930 100.0% 309,453 100.0% 459,982 100.0%
FINANCIAL INFORMATION
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The Group ’s labour procurement costs was not only the largest component of its overall
cost of sales but also was the largest component of its cost of sales for the sub-segments
comprising its T elecommunications Infrastructure Services business segment during the Track
Record Period. For the years ended 31 December 2021, 2022 and 2023, the labour procurement
costs for the Group ’s Infrastructure Construction Servi ces and Infrastructure Maintenance
Services business sub-segments, accounted for approximately 96.5%, 97.1% and 98.2%, and
57.7%, 67.9% and 71.7% of the cost of sales for each of the aforementioned business sub-
segments respectively. In general, T elecommunications Infrastructure Services projects are
labour intensive, particularly for Infrastructure C onstruction Services projects where the principal
type of work involved is base station and auxiliar y facilities engineering services or power grid
connection services. In order to streamline its operations and focus on more complex work such
as project management and quality control, the Group engaged labour suppliers to take up
substantial labour intensive works during the Track Record Period. This strategic move allowed
the Group to optimise its resources and concentrate on its core competencies. By delegating the
labour intensive tasks to labour suppliers, the Group could enhance its efficiency and
productivity, while ensuring that all works were completed to meet the customers ’ standards.
This approach enables the Group to better meet the needs of its customers and continue to
thrive in a competing market.
While the Group ’s direct material costs during the Track Record Period was substantially
less than its labour procurement costs, it represented the largest component of the Group ’sc o s t
of sales for its Digitalisation Solution Services business segment. For the years ended 31
December 2021, 2022 and 2023, the Group ’s direct material costs accounted for approximately
86.1%, 77.3% and 88.1% of the cost of sales for its Digitalisation Solution Services business
segment, respectively. Hardware and software are integral to any digitalisation solution and
hence accounted for a significant portion of the cost of sales. The direct material costs was not
substantial in the T elecommunications Infrastructure Services business segment, since the
substantial part of the direct material applied to its T elecommunications Infrastructure Services
projects was supplied by its labour suppliers and the relevant material costs were included in
the labour procurement costs.
FINANCIAL INFORMATION
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Gross profit and gross profit margin
The following table sets out a breakdown of the Group ’s gross profit and gross profit margin
during the Track Record Period by business segments:
Year ended 31 December
2021 2022 2023
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
– I n f r a s t r u c t u r eC o n s t r u c t i o nS e r v i c e s ......................... 4 1 , 8 8 7 1 2 . 2 % 3 6 , 9 4 8 1 2 . 0 % 6 5 , 0 1 8 1 4 . 0 %
– I n f r a s t r u c t u r eM a i n t e n a n c eS e r v i c e s ......................... 4 , 3 9 2 1 7 . 5 % 5 , 8 8 4 1 7 . 7 % 9 , 1 4 7 2 4 . 1 %
S u b - t o t a l ............................................ 46,279 12.5% 42,832 12.5% 74,165 14.8%
Digitalisation Solution Services
– I n t e g r a t e dS o l u t i o nS e r v i c e s .............................. 4 4 , 6 0 3 4 1 . 5 % 2 , 5 7 5 2 5 . 4 % 1 3 , 0 5 9 3 1 . 7 %
– S y s t e mM a i n t e n a n c eS e r v i c e s ............................. 3 0 6 1 5 . 6 % 3 9 1 1 9 . 1 % 1 7 8 3 7 . 9 %
– S o f t w a r eS o l u t i o nS e r v i c e s ............................... –– 57,840 99.0% 61,917 93.5%
S u b - t o t a l ............................................ 44,909 41.1% 60,806 86.1% 75,154 69.6%
Total gross profit and overall gross profit margin ............... 91,188 19.0% 103,638 25.1% 149,319 24.5%
The Group ’s gross profit for the years ended 31 December 2021, 2022 and 2023 was
approximately RMB91.2 million , RMB103.6 million and RMB149.3 million, respectively and its
gross profit margin for the corresponding years was approximately 19.0%, 25.1% and 24.5%,
respectively.
The Group ’s gross profit was largely contributed by i ts Infrastructure Construction Services
business sub-segment and Digitalisation Solution Services business segment, which in
aggregate contributed more than 85% of the Group ’s total gross profit during the Track Record
Period. The gross profit margin of the Group ’s Digitalisation Solution Services business segment
was relatively higher than that of the T elecommunications Infrastructure Services business
segment during the Track Record Period. The relatively higher gross profit margin of the Group ’s
Digitalisation Solution Services projects was mainly due to the fact that (i) the cost of sales was
generally lower as a result of such projects being less labour intensive and having a relatively
shorter project life cycle; and (ii) the projects were generally obtained via single-source
procurement and/or by responding to invitation to quote and required a higher degree of
customisation by the Group thus leaving more room for the Group to charge at a higher price.
FINANCIAL INFORMATION
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Conversely, the gross profit margin of the Group ’s Infrastructure Construction Services
business sub-segment was generally the lowest during the Track Record Period as the projects
were (i) labour intensive and (ii) mainly obtained by way of open tender which would restrict the
Group ’s ability in setting a high tender price due to the competitive nature of open tenders as
they would be made available to all of the Group ’s competitors. Notwithstanding the above,
certain types of works of the Infrastructure Construction Services may carry relatively higher
gross profit margins, though the difference will ultimately depend on a variety of factors
including, the market conditions when the tender is made/awarded, location of the relevant
project as well as complexity of works involved. For example, where the principal type of work
required for a Infrastructure Construction Services project is wireless network equipment
installation services, its gross profit margin would generally be higher than others as (i) this type
of work is relatively less labour intensive, (ii) requires more sk illed labour and (iii) the number of
integrated service providers who possess the requisite licenses undertake projects of
comparable size are comparatively less, thus the Group ’s competitiveness is comparatively
greater. Where the principal type of work required for the project is base station and auxiliary
facilities engineering services, its gross profit margins would be lower than others as (i) this type
of work is highly labour intensive, (ii) only requir es a limited number of skilled labour and (iii) the
requisite licenses are commonly held by integrated service providers.
T elecommunications Infrastructure Services
The gross profit margin of the Group ’s T elecommunications Infrastructure Services
business segment remained relatively stable at approximately 12.5% and 12.5% for the year
ended 31 December 2021 and 2022, respectively.
The gross profit margin of the Group ’s T elecommunications Infrastructure Services
business segment experienced a slight increase from approximately 12.5% for the year ended
31 December 2022 to approximately 14.8% for the year ended 31 December 2023. This
increase can be attributed to i) the commencement of a wireless network equipment installation
project in Guangxi Zhuang Autonomous Region, which started generating revenue in the latter
half of 2022; and ii) two broadband construction projects in Jiangxi Province, which started
generating revenue in the early 2023, where these particular projects had a relatively higher
gross profit margin primarily due to their complex nature and specialised skills required.
Digitalisation Solution Services
The gross profit margin of the Group ’s Digitalisation Solution S ervices business segment
increased from approximately 41.1% for the year ended 31 December 2021 to approximately
86.1% for the year ended 31 December 2022. Such increase was mainly attributable to the
Group ’s prioritisation of Software Solution Services projects over Integrated Solution Services
projects, leading to higher gross profit margins due to minimal project costs, as most of the
software applied in Software Solution Services was developed by the Group. Additionally, the
Group recognised and classified the research and development costs for the software as
research and development expenses, further boosting the gross profit margin. The gross profit
margin of the Group ’s Digitalisation Solution Services business segment decreased from
approximately 86.1% for the year ended 31 December 2022 to approximately 69.6% for the year
ended 31 December 2023. This decrease was mainly attributed to the increased contribution of
the Integrated Solution Services business sub-segment, which is a sub-segment within the
Digitalisation Solution Services business segment that has a relatively lower gross profit margin.
FINANCIAL INFORMATION
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The gross profit margin of the Group ’s Integrated Solution Services business sub-segment
fluctuated during the Track Record Period. Speci fically, it decreased from approximately 41.5%
for the year ended 31 December 2021 to approximately 25.4% for the year ended 31 December
2022, but rebounded to approximately 31.7% for the year ended 31 December 2023. These
fluctuations were attributable to the varying utilisation of the Group ’s self-developed software in
the Integrated Solution Services projects during this period. In 2022, the Group had a limited
number of Integrated Solution Services projects, including a relatively large digital healthcare
project. However, this project contributed to a relatively low gross profit margin due to high costs
associated with purchase of hardware and software from third-party suppliers. As a result, the
higher cost of sales led to a decrease in the gross profit margin of the Integrated Solution
Services business sub-segment compared to 2021. Nevertheless, there was an improvement in
the gross profit margin of the Integrated Solution Services business sub-segment in 2023,
reaching approximately 31.7%. This positive development was primarily driven by another
sizable digital healthcare proj ect. The utilisation of the Group ’s self-developed software in this
project contributed to a higher gross profit margin. During the Track Record Period, the Group ’s
generated limited gross profit from its System Maintenance Services business sub-segment due
to its reliance on a small number of projects. Consequently, the fluctuation in the gross profit
margin of this sub-segment was primarily influenced by a limited number of projects. The gross
profit margin of the System Maintenance Services business sub-segment increased from
approximately 15.6% for the year ended 31 December 2021 to approximately 19.1% for the year
ended 31 December 2022. This increase was primarily driven by an increase in the revenue
contribution of a digital healthcare project with a high gross profit margin. Further, the gross
profit margin of the System Maintenance Services business sub-segment continued to improve,
reaching approximately 37.9% for the year ended 31 December 2023. This increase in the gross
profit margin was mainly attributed to the further increase in revenue contribution of the
abovementioned digital healthcare project, coupled with the contribution from a relatively high
gross profit margin reservoir project. The gross profit margin of the Group ’s Software Solution
Services remained stable for the year ended 31 December 2022 and 2023.
Please refer to the paragraphs headed ‘‘Review of historical results of operations ’’ in this
section for analysis of the fluctuation of the Group ’s gross profit margin during the Track Record
Period.
FINANCIAL INFORMATION
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Other net income
The Group ’s other net income primarily comprised government grants and interest income
during the Track Record Period. The following table sets out a breakdown of the Group ’so t h e r
net income during the Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
G o v e r n m e n tg r a n t s................................ 3 , 2 5 4 5 5 . 6 % 8 6 9 1 8 . 3 % 3 , 2 4 8 6 4 . 7 %
I n t e r e s ti n c o m ef r o mf i n a n c i n gc o m p o n e n t................. 2 , 0 4 3 3 4 . 9 % 3 , 0 1 6 6 3 . 5 % 1 , 3 5 4 2 7 . 0 %
R e n t a li n c o m ef r o mi n v e s t m e n tp r o p e r t y .................. 6 4 2 1 1 . 0 % 6 4 2 1 3 . 5 % 6 4 2 1 2 . 8 %
B a n kd e p o s i ti n t e r e s ti n c o m e .......................... 1 1 2 1 . 9 % 1 1 9 2 . 5 % 1 8 0 3 . 6 %
( L o s s ) / g a i no nd i s p o s a lo fp r o p e r t y ,p l a n ta n de q u i p m e n t ....... ( 2 5 ) ( 0 . 4 % ) ( 1 0 3 ) ( 2 . 2 % ) 2 –
N e tf o r e i g ne x c h a n g eg a i n / ( l o s s ) ....................... –– 344 7.2% (732) (14.6%)
S h a r eo fp r o f i t so fa s s o c i a t e s......................... –––– 74 1.5%
O t h e r s........................................ ( 1 7 6 ) ( 3 . 0 % ) ( 1 3 7 ) ( 2 . 8 % ) 2 5 0 5 . 0 %
Total ......................................... 5,850 100.0% 4,750 100.0% 5,018 100.0%
Government grants granted to the Group was a non-recurring income which was mainly (i)
in recognition of the Group ’s efforts in reducing corporate costs and optimising development
environment, (ii) in support for Zhonggan Communication ’s previous A-Share listing plan and
equity financing activities, (iii) in recognition of the Group ’s contribution to the development of
high tech industries in Nanchang and (iv) as subsidies for the Group ’s research and
development activities, during the Track Record Period. The government grants were provided
t ot h eG r o u pb a s e do n( i )t h eG r o u p ’s eligibility for the governmen t grant through an internal
verification process conducted by the government authorities, confirming that the Group met the
criteria for receiving the government grant; and (ii) the government policies aimed at granting
subsidies to companies in specific industries. Government grants accounted for approximately
55.6%, 18.3% and 64.7%, respectively, of the Group ’s other net income for the years ended 31
December 2021, 2022 and 2023.
The Group ’s interest income from financing component is an income arising from the
agreement that provides a significant financing benefit to its customer for more than 12 months.
It is recognised separately from the Group ’s revenue using the effective interest method. During
the Track Record Period, it generally fluctuated along with the amortised cost of the trade
receivables of the Group ’s five Integrated Solution Services projects, where there would be a
period of more than one year would elapse between the satisfactory performance of the Group ’s
obligation and the settlement of payment for that performance obligation in accordance with the
terms of the agreements. Interest income from financing component accounted for
approximately 34.9%, 63.5% and 27.0%, respectively of the Group ’s other net income for the
years ended 31 December 2021, 2022 and 2023.
FINANCIAL INFORMATION
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Selling expenses
The Group ’s selling expenses primarily comprise d tender related fees, entertainment
expenses and staff costs during the Track Record Period. The following table sets out a
breakdown of the Group ’s selling expenses during t he Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
E n t e r t a i n m e n te x p e n s e s ................................. 1 , 8 2 2 3 5 . 8 % 1 , 0 7 1 3 1 . 1 % 1 , 0 0 9 3 0 . 6 %
T e n d e rr e l a t e df e e s .................................... 1 , 6 1 2 3 1 . 7 % 1 , 4 4 8 4 2 . 1 % 1 , 3 0 8 3 9 . 7 %
S t a f fc o s t s .......................................... 8 6 9 1 7 . 1 % 5 0 1 1 4 . 6 % 7 3 3 2 2 . 2 %
T r a v e le x p e n s e s ...................................... 3 7 0 7 . 3 % 3 4 1 . 0 % 5 9 1 . 8 %
D e p r e c i a t i o n ........................................ 2 4 8 4 . 9 % 1 3 6 4 . 0 % 3 0 0 . 9 %
O f f i c ee x p e n s e s...................................... 1 0 5 2 . 1 % 5 7 1 . 7 % 2 9 0 . 9 %
O t h e r s............................................ 5 4 1 . 1 % 1 8 9 5 . 5 % 1 3 0 3 . 9 %
Total ............................................. 5,080 100.0% 3,436 100.0% 3,298 100.0%
Entertainment expenses mainly represented expenses incurred for the cost of meals
provided to the Group ’s customers. For the years ended 31 December 2021, 2022 and 2023, the
Group incurred entertainment expenses of ap proximately RMB1.8 million, RMB1.1 million and
RMB1.0 million, accounting for approximately 3 5.8%, 31.1% and 30.6%, respectively, of the
Group ’s total selling expenses.
T ender related fees mainly represented service fees paid to third party agents engaged by
the Group ’s customers when the Group won the tenders in the tendering process. For the years
ended 31 December 2021, 2022 and 2023 the Group incurred tender related fees of
approximately RMB1.6 million, RMB1.4 m illion and RMB1.3 million, accounting for
approximately 31.7%, 42.1% and 39.7%, respectively, of the Group ’s total selling expenses.
Staff costs mainly comprised salaries, discretionary bonus, allowance and contributions to
defined contribution retirement plan incurred for the Group ’s sales and marketing staff. For the
years ended 31 December 2021, 2022 and 2023, the staff costs incurred by the Group was
relatively stable and amounted to approxima tely RMB0.9 million, RMB0.5 million and RMB0.7
million, accounting for approximately 17.1% , 14.6% and 22.2%, respectively, of the Group ’s total
selling expenses.
FINANCIAL INFORMATION
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Administrative expenses
The Group ’s administrative expenses primarily co mprised staff costs, credit impairment
losses, listing expenses and professional service and consulting fees during the Track Record
Period. The following table sets out a breakdown of the Group ’s administrative expenses during
the Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
S t a f fc o s t s .......................................... 6 , 5 4 8 3 2 . 2 % 6 , 7 1 1 2 0 . 3 % 7 , 3 2 4 1 9 . 0 %
C r e d i ti m p a i r m e n tl o s s e s ................................ 3 , 7 5 9 1 8 . 5 % 1 0 , 8 4 3 3 2 . 8 % 1 1 , 6 9 4 3 0 . 3 %
P r o f e s s i o n a ls e r v i c ea n dc o n s u l t i n gf e e s...................... 2 , 0 9 1 1 0 . 3 % 1 , 6 4 9 5 . 0 % 9 2 4 2 . 4 %
E n t e r t a i n m e n te x p e n s e s ................................. 1 , 2 8 4 6 . 3 % 2 , 1 0 1 6 . 4 % 3 , 1 7 8 8 . 3 %
D e p r e c i a t i o n ........................................ 1 , 2 7 1 6 . 2 % 1 , 3 1 3 4 . 0 % 1 , 2 3 0 3 . 2 %
O f f i c ee x p e n s e s...................................... 1 , 2 5 3 6 . 2 % 9 8 7 3 . 0 % 1 , 8 8 4 4 . 9 %
F i n a n c ea d m i n i s t r a t i v ee x p e n s e s ........................... 1 , 1 8 0 5 . 8 % 6 8 3 2 . 1 % 4 6 0 1 . 2 %
T r a v e le x p e n s e s ...................................... 1 , 0 2 8 5 . 1 % 2 3 1 0 . 7 % 3 9 5 1 . 0 %
L i s t i n ge x p e n s e s ...................................... 5 5 7 2 . 7 % 6 , 6 0 9 2 0 . 0 % 8 , 5 6 6 2 2 . 3 %
M o t o rv e h i c l ee x p e n s e s................................. 3 7 6 1 . 8 % 1 8 7 0 . 6 % 5 9 0 . 2 %
O t h e r s............................................ 1 , 0 0 4 4 . 9 % 1 , 6 8 6 5 . 1 % 2 , 7 6 0 7 . 2 %
Total ............................................. 20,351 100.0% 33,000 100.0% 38,474 100.0%
Staff costs mainly comprised salaries, discretionary bonus, allowance and contributions
paid to defined contribut ion plans for the Group ’s management, finance and administrative staff.
For the years ended 31 December 2021, 2022 and 2023, the Group incurred staff costs of
approximately RMB6.5 million, RMB6.7 million and RMB7.3 million, accounting for approximately
32.2%, 20.3% and 19.0%, re s p e c t i v e l y ,o ft h eG r o u p’s total administrative expenses. The
increase in staff costs was mainly due to the increase in number of management, finance and
administrative employees. As at 31 December 2021, 2022 and 2023, the Group ’s total number of
management, finance and administrative employees was 49, 43 and 48, respectively.
Credit impairment losses represented the expected credit losses on trade and other
receivables and contract assets for which the Group would conduct an impairment analysis at
the end of each year during the Track Record Period using a provision matrix to measure their
expected credit losses. For the years ended 31 December 2021, 2022 and 2023, the credit
impairment losses of the Group amounted to approximately RMB3.8 million, RMB10.8 million
and RMB11.7 million, accounting for approximate ly 18.5%, 32.8% and 30.3%, respectively, of
the Group ’s total administrative expenses. The following table sets out the details of impairment
losses on trade and other receivables and con tract assets during the Track Record Period:
Professional service and consulting fees mainly represented the professional fees incurred
in respect of Zhonggan Communication ’s previous A-share listin g plan and the operation
advisory fee. For the years ended 31 December 2021, 2022 and 2023, the professional service
and consulting fees incurred by the Group amoun ted to approximately RMB2.1 million, RMB1.6
million and RMB0.9 million, accounting for approxi mately 10.3%, 5.0% and 2.4%, respectively, of
the Group ’s total administrative expenses.
FINANCIAL INFORMATION
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For the years ended 31 December 2021, 2022 and 2023, the listing expenses incurred by
the Group amounted to approximately RMB0. 6 million, RMB6.6 million and RMB8.6 million,
accounting for approximately 2.7%, 20.0% and 22.3%, respectively, of the Group ’s total
administrative expenses.
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
Impairment losses on
– T r a d er e c e i v a b l e s .................................... 3 , 1 6 5 8 4 . 2 % 8 , 3 7 3 7 7 . 2 % 1 2 , 4 2 6 1 0 6 . 3 %
– O t h e rr e c e i v a b l e s .................................... 4 9 6 1 3 . 2 % 9 7 8 9 . 0 % 4 2 6 3 . 6 %
– C o n t r a c ta s s e t s ..................................... 9 8 2 . 6 % 1 , 4 9 1 1 3 . 8 % ( 1 , 1 5 8 ) ( 9 . 9 % )
Total ............................................. 3,759 100.0% 10,842 100.0% 11,694 100.0%
T h ei n c r e a s ei nt h eG r o u p ’s impairment losses during the Track Record Period was
generally in line with the increase in the balance of trade and other receivables and contract
assets. The Group experienced a significant increase in impairment losses on trade receivables
for the year ended 31 December 2022 compared to the previous year. This was primarily due to
substantial impairment losses incurred for trad e receivables associated with five Integrated
Solution Services projects, resulting from the extension of payment terms. The Group reported a
reversal of impairment losses on contract assets for the year ended 31 December 2023
amounted to approximately RMB1.2 million. The reversal was primarily driven by a decrease in
the balance of contract a ssets related to projects ’ retention money as at 31 December 2023,
compared to the previous year.
Research and development expenses
The Group ’s research and development expenses mainly comprised outsourcing fees and
staff costs of the Group ’s research and development staff during the Track Record Period. The
following table sets out a breakdown of the Group ’s research and development expenses during
the Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
O u t s o u r c i n gf e e s ..................................... 8 , 9 5 9 4 6 . 7 % 5 , 4 8 4 3 1 . 0 % 1 4 , 5 8 5 5 6 . 4 %
S t a f fc o s t s .......................................... 8 , 6 6 0 4 5 . 1 % 1 0 , 4 0 0 5 8 . 8 % 1 0 , 8 3 6 4 1 . 9 %
D e p r e c i a t i o n ........................................ 6 0 . 0 % ––––
M a t e r i a la n dd e s i g nc o s t s ................................ –––– 19 0.1%
O t h e r s............................................ 1 , 5 8 3 8 . 2 % 1 , 7 9 6 1 0 . 2 % 4 3 3 1 . 6 %
Total ............................................. 19,208 100.0% 17,680 100.0% 25,873 100.0%
FINANCIAL INFORMATION
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The staff costs mainly represented salaries, discretionary bonus, allowance and
contributions to defined contribution plans paid to the staff of the Group ’s research and
development team and outsourcing fees mainly represented the fees paid to third party
programmers for software development services. For the years ended 31 December 2021, 2022
and 2023, the Group ’s staff costs accounted for approxi mately 45.1%, 58.8% and 41.9% while
the Group ’s outsourcing fees accounted for appro ximately 46.7%, 31.0% and 56.4% of its
research and development expenses, respectively. During the Track Record Period, the Group
strived to expand its in-house research and development capa bilities, in particular for the
development of technologies to be applied for i ts Digitalisation Solution Services business
segment.
Finance costs
The Group ’s finance costs mainly comprised interest on bank borrowings during the Track
Record Period. The following table sets out a breakdown of the Group ’s finance costs during the
Track Record Period:
Year ended 31 December
2021 2022 2023
Amount % of total Amount % of total Amount % of total
RMB ’000 RMB ’000 RMB ’000
I n t e r e s to nb a n kb o r r o w i n g s .............................. 1 0 , 9 2 0 9 5 . 1 % 1 5 , 0 9 3 9 8 . 4 % 1 6 , 6 6 0 9 9 . 9 %
I n t e r e s to nf i n a n c i n gc o m p o n e n t ............................ 5 5 2 4 . 8 % 2 3 4 1 . 5 % 7 –
Interest on lease liabilities ............................... 8 0 . 1 % 5 0 . 1 % 1 5 0 . 1 %
Total ............................................. 11,480 100.0% 15,332 100.0% 16,682 100.0%
The changes in the Group ’s finance costs during the Track Record Period were primarily
driven by fluctuations of the Group ’s interest on bank borrowings, which were generally affected
by the Group ’s average balance of short-term borrowing s and interest rates thereon during the
years.
For details relating to the Group ’s bank borrowings, please refer to the paragraph headed
‘‘Indebtedness ’’in this section.
Income tax
The Group ’s income tax comprised current tax and movements in deferred tax assets and
liabilities. Current tax is an expected tax payable on taxable income for the year, using tax rates
enacted or substantively enacted at the end of the reporting period, and any adjustment to tax
payable in respect of previous ye ars. Deferred tax assets and lia bilities arise from deductible
and taxable temporary differences respectively, being the differences between the carrying
amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred
tax assets also arise from unused tax losses and unused tax credits.
FINANCIAL INFORMATION
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Under the EIT Law, the Group ’s PRC subsidiaries are subject to an income tax at the
statutory rate of 25%. The PRC Enterprise Income T ax Law allows enterprises to apply for
certificate of High and New T echnology Enterprise* （ 高新技術企業 ）which entitles the qualified
companies to a preferential income tax rate of 15%, subject to fulfilment of the recognition
criteria. Zhonggan Communication initially qua lified as a High and New T echnology Enterprise in
2015 and the qualification was subsequently renewed in 2018 and 2021 and the valid period
was extended to 2024. GLP T echnology qualified as a High and New T echnology Enterprise in
2020 and the qualification was subsequently renewed in 2023 and the valid period was
extended to 2026. For the years ended 31 December 2021, 2022 and 2023, the Group ’s
recorded income tax e xpenses of approximately RMB4.7 million, RMB4.0 million and RMB1.3
million and the effective tax rates were approxima tely 11.6%, 10.2% and 2.0%, respectively. The
significant decrease in the effective tax rate for the year ended 31 December 2023, in
comparison to previous years, can be p rimarily attributed to GLP Software ’s qualification as a
‘‘Double-soft Enterprise ’’ in 2023. This qualification granted GLP Software full exemption from
corporate income tax, leading to a significantly lower tax burden for the Group. As a result, the
Group benefited from a considerably reduced effective tax rate during the aforementioned
period.
REVIEW OF HISTORICAL RESULTS OF OPERATIONS
Year ended 31 December 2022 compared to the year ended 31 December 2021
Revenue
The Group experienced a decrease in revenue of approximately RMB66.0 million or 13.8%
from RMB479.1 million for the year ended 31 December 2021 to approximately RMB413.1
million for the year ended 31 D ecember 2022. The decrease was primarily driven by the
Digitalisation Solution Services business segment. For the year ended 31 December 2022, the
Group prioritised Software Solution Services projects over Integrated Solution Services projects
t oa l i g nw i t hc u s t o m e r s’ demand and to alleviate the need for substantial capital requirements
for the purchase of hardware and equipment applied in Integrated Solution Services projects,
thereby enhancing the Group ’s liquidity. As a result, the Group recorded a significant decrease
in revenue from Integrated Solution Services, decreasing by approximately RMB97.3 million
from approximately RMB107.4 million for the year ended 31 December 2021 to approximately
RMB10.1 million for the year ended 31 December 2022. However, the decrease was partially
offset by the increase in the number of Software Solution Services projects, resulting in a
significant increase in revenue from nil for the year ended 31 December 2021 to approximately
RMB58.4 million for the year ended 31 December 2022.
Also, the Group ’s total revenue decreased to a certain extent due to the decrease in
number of Infrastructure Construction Services projects. The decrease in revenue from the
Infrastructure Construction Services business sub-segment was primarily caused by the
completion of a substantial portion of the p rovincial transmission pipeline engineering
construction project in Jiangxi Province in the previous year. As a result, the revenue generated
from this project decreased significantly b y RMB73.1 million for the year ended 31 December
2022. However, the decrease was partially offset by the aggregate revenue of approximately
RMB65.0 million generated from a transmission and wireline enhancement project in Yunnan
Province.
FINANCIAL INFORMATION
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Cost of sales
The Group ’s cost of sales decreased by approximately 20.2% from approximately
RMB387.9 million for the year ended 31 Decembe r 2021 to approximately RMB309.5 million for
the year ended 31 December 2022. The decrease was primarily due to a significant decrease in
the Group ’s direct material costs in its Digitalisatio n Solution Services business segment and
labour procurement costs in its T elecommunications Infrastructure Services business segment.
The Group experienced a significant decrease of approximately RMB48.7 million in direct
material costs for the year ended 31 December 2022. The decrease was primarily due to the
Group ’s prioritisation of Software Solution Services projects over Integrated Solution Services
projects, taking into account the customers ’ demand and the limited resources available during
that period. The interim measure enabled the Group to avoid occupying substantial capital
requirements for the purchase of hardware for the projects. The Group ’s interim measure to
reduce its involvement in the Integrated Solution Services projects was due to the fact that the
purchase of hardware would have tied up a significant portion of its working capital, reducing its
liquidity and potentially limiting its ability to ca rry out its new projects. As a result, the Directors
considered that its prioritisation of Software Solutions Services projects would provide greater
efficiencies.
S i m i l a r l y ,t h ed e c r e a s ei nt h eG r o u p’s labour procurement costs of approximately RMB20.9
million was mainly due to the completion of the significant part of the sizable provincial
transmission pipeline engineering construction project in Jiangxi Province in the previous year.
The decrease in demand for labour procurement resulted in a corresponding decrease in labour
procurement costs in line with the revenue contributed by the Group ’s Infrastructure
Construction Services projects.
Gross profit and Gross profit margin
The Group ’s total gross profit increased by approximately RMB12.5 million or 13.7% from
approximately RMB91.2 million for the year e nded 31 December 2021 to approximately
RMB103.6 million for the year ended 31 December 2022, and the Group ’so v e r a l lg r o s sp r o f i t
margin increased from approximate ly 19.0% to approximately 25.1%.
The Group ’s overall gross profit margin increased primarily due to an increase in the gross
profit margins of its Digitalisation Solution Services business segment. The increase reflected
the Group ’s prioritisation of Software Solution Services projects over Integrated Solution
Services projects, taking into account the customers ’ demand and the limited resources
available during that period. This interim measure of the Group to focus on Software Solution
Services projects has resulted in higher gross profit margin due to the minimal costs involved in
t h ep r o j e c t s ,a sm o s to ft h es o f t w a r ea p p l i e di nS o f t w a r eS o l u t i o nS e r v i c e sw a sd e v e l o p e db y
the Group. Furthermore, the Group recognised and classified the cost of research and
development for the software as research and development expenses for the relevant years,
which has helped to further enhance its gross profit margin.
FINANCIAL INFORMATION
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Other net income
The Group ’s other net income decreased by approx imately RMB1.1 million or 18.8% from
approximately RMB5.9 million for the year ended 31 December 2021 to approximately RMB4.8
million for the year ended 31 December 2022. The decrease was mainly contributed by a
decrease in government grants by approximately RMB2.4 million, which was offset by an
increase in interest income from financing component by approximately RMB1.0 million.
Selling expenses
The Group ’s selling expenses decreased by appro ximately RMB1.6 million or 32.4% from
approximately RMB5.1 million for the year ended 31 December 2021 to approximately RMB3.4
million for the year ended 31 December 2022. Th e decrease was primarily due to a decrease in
staff costs, entertainment expenses and tender related fees. Specifically, the decrease in staff
costs of approximately RMB0.4 million was main ly due to the reallocation of certain marketing
staffs to the project management team, resulting in the corresponding staff costs being treated
as cost of sales in 2022. The decrease in entertainment expenses of approximately RMB0.8
million was mainly due to the implementation of e nhanced cost control measures in 2022 as well
as a decrease in marketing activities necessitated by the COVID-19 pandemic. Similarly, the
decrease in tender related fees of approxima tely RMB0.2 million was mainly due to a decrease
in the number of successful tenders resulting from the slowdown of tendering process by its
clients resulting from the impact of the COVID-19 pandemic.
Administrative expenses
The Group ’s administrative expenses increased by approximately RMB12.6 million or
62.1% from approximately RMB20.4 million for the year ended 31 December 2021 to
approximately RMB33.0 million for the year ended 31 December 2022. The increase was
primarily due to an increase in credit impairment losses and listing expenses. Specifically, the
increase in credit impairment losses of appr oximately RMB7.1 million was mainly due to the
continuous increase in the balance of trade receivables and contract assets. Further, the
increase in listing expenses of approximately RMB6.1 million was mainly due to incurrence of
additional professional fees related to the Listing.
Research and development expenses
The Group ’s research and development expenses decreased slightly by approximately
RMB1.5 million or 8.0% from approximately RMB 19.2 million for the year ended 31 December
2021 to approximately RMB17.7 million for th e year ended 31 Decemb er 2022. The decrease
was primarily due to a decrease in outsourcing fees for research and development of
approximately RMB3.5 million, which was mainly due to a decrease in the scale of research
and development projects outsourced compared to the previous year. However, the decrease
was partially offset by an increase in the staff costs of the Group ’s research and development
team of approximately 20.1%, which was mainly due to the Group ’s intention to enhance its self-
development capability.
FINANCIAL INFORMATION
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Finance costs
The Group ’s finance costs increased by approximately RMB3.9 million or 33.6% from
RMB11.5 million for the year ended 31 December 2021 to approximately RMB15.3 million for the
year ended 31 December 2022. The increase was primarily due to an increase in interest on
bank borrowings, resulting from an increase in the average bank borrowing balance in 2022.
Income tax
The Group ’s income tax decreased by approximately RMB0.8 million or 16.5% from
approximately RMB4.7 million for the year ended 31 December 2021 to approximately RMB4.0
million for the year ended 31 December 2022. Th e decrease was primarily due to a decrease in
profit before taxation by approximately 4.8% compared to the previous year.
Profit for the year and net profit margin
As a result of the foregoing, the Group ’s net profit decreased by approximately RMB1.2
million or 3.3% from approximately RMB36.2 m illion for the year ended 31 December 2021 to
approximately RMB35.0 million for the year ended 31 December 2022. The Group ’s net profit
margin increased from approximately 7.5% for the year ended 31 December 2021 to
approximately 8.5% for the year ended 31 December 2022, mainly due to the increase in the
Group ’s overall gross profit margin from approxima tely 19.0% to approximately 25.1%, and offset
by the increase in administrative expen ses of approximately RMB12.6 million.
Year ended 31 December 2023 compared to the year ended 31 December 2022
Revenue
The Group experienced a significant increase in revenue of approximately RMB196.2
million or 47.5% from RMB413.1 million for the yea r ended 31 December 2022 to approximately
RMB609.3 million for the year ended 31 Decemb er 2023. The growth can be attributed to both
the T elecommunications Infrastructure Serv ices business segment and the Digitalisation
Services business segment. In 2023, there was an uptick in work orders placed by customers
for the Infrastructure Constructi on Services projects, following the lifting of restrictions imposed
by the COVID-19 pandemic. Moreover, the progress of the Infrastructure Construction Services
projects accelerated, leading to increased revenue recognition for the Group in this business
sub-segment. The combined effect of heightened work orders and improved project progress
f a c i l i t a t e dt h er e v e n u eg r o w t hf o rt h eG r o u p’s Infrastructure Construction Services business sub-
segment for the year ended 31 December 2023. The growth observed in the Digitalisation
Solution Services business segment was primarily driven by an increase in the number of
Integrated Solution Services projects and Software Solution Services projects. This expansion
resulted in a significant increase in revenue f rom approximately RMB70.6 million for the year
ended 31 December 2022 to approximately RMB107.9 million for the year ended 31 December
2023.
FINANCIAL INFORMATION
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Cost of sales
The Group ’s cost of sales increased significantly by approximately RMB150.5 million or
48.6% from approximately RMB309.5 million for the year ended 31 December 2022 to
approximately RMB460.0 million for the year ended 31 December 2023. The increase was
primarily due to a significant increase in the Group ’s labour procurement costs in its
T elecommunications Infrastructure Services business segment and direct material costs in its
Integrated Solution Services business sub-segment. The increase in the Group ’s labour
procurement costs was generally in line with the increase in revenue contributed by the Group ’s
Infrastructure Construction Serv ices projects. The increase in direct material costs (hardware) of
the Integrated Solution Services business sub-segment for the year ended 31 December 2023
was primarily due to the fact that more hardware was used for implementation of its Integrated
Solution Services projects. The increase in demand for direct material costs (hardware) of the
Integrated Solution Services business sub-segment was generally in line with the revenue
growth of this business sub-segment.
Gross profit and Gross profit margin
The Group ’s total gross profit increased by approximately RMB45.7 million or 44.1% from
approximately RMB103.6 million for the year ended 31 December 2022 to approximately
RMB149.3 million for the year ended 31 December 2023, and the Group ’so v e r a l lg r o s sp r o f i t
margin decreased slightly fro m approximately 25.1% to app roximately 24.5%. The Group ’s
overall gross profit margin decreased primarily due to a decrease in the gross profit margins of
its Digitalisation Solution Services business segment. This decrease was mainly attributed to the
increased contribution of the Integrated Solution Services business sub-segment, which is a
sub-segment within the Digitalisation Solution S ervices business segment that has a relatively
lower gross profit margin.
Other net income
The Group ’s other net income slightly increased b y approximately RMB0.2 million or 4.2%
from approximately RMB4.8 million for the ye ar ended 31 December 2 022 to approximately
RMB5.0 million for the year ended 31 December 2023. This increase can be primarily attributed
to a combination of factors, including an increase in government grants of approximately
RMB2.4 million and a decrease in interest income f rom financing components of approximately
RMB1.7 million.
Selling expenses
The Group ’s selling expenses amoun ted to approximately RMB3.3 million for the year
ended 31 December 2023, remaining stable compared to the amount for the year ended 31
December 2022.
FINANCIAL INFORMATION
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Administrative expenses
The Group ’s administrative expenses increased by approximately RMB5.5 million or 16.6%
from approximately RMB33.0 million for the year ended 31 December 2022 to approximately
RMB38.5 million for the year ended 31 December 2023. The increase was primarily due to an
increase in listing expenses and entertainment expenses. Specifically, the increase in listing
expenses of approximately RMB2.0 millio n was mainly due to incurrence of additional
professional fees related to the Listing. Further, the increase in entertainment expenses of
approximately 1.1 million which is in line with the growth the Group ’s businesses.
Research and development expenses
The Group ’s research and development expenses increased significantly by approximately
RMB8.2 million or 46.3% from approximately RMB 17.7 million for the year ended 31 December
2022 to approximately RMB25.9 million for th e year ended 31 December 2023. The increase
was primarily due to an increase in outsourcing fees for research and development of
approximately RMB9.1 million, which was partially offset by a decrease in other research and
development expen ses of approximately RMB1.4 million. T he increase in outsourcing fee was
mainly due to an increase in the scale of research and development projects outsourced
compared to the previous year.
Finance costs
The Group ’s finance costs increased by approximately RMB1.4 million or 9.2% from
RMB15.3 million for the year ended 31 December 20 22 to approximately RMB16.7 million for the
year ended 31 December 2023. The increase was primarily due to an increase in interest on
bank borrowings, resulting from an increase in the average bank borrowing balance in 2023.
Income tax
The Group ’s income tax decreased by approximately RMB2.7 million or 67.5% from
approximately RMB4.0 million for the year ended 31 December 2022 to approximately RMB1.3
million for the year ended 31 December 2023. Th e decrease was primarily due to the fact that
GLP Software was qualified as ‘‘Double-soft Enterprise ’’ in 2023 to enjoy full exemption from
corporate income tax during the year.
Profit for the year and net profit margin
As a result of the foregoing, the Group ’s net profit increased by approximately RMB33.7
million or 96.3% from approximately RMB35.0 million for the year ended 31 December 2022 to
approximately RMB68.7 million for the year ended 31 December 2023. The Group ’s net profit
margin increased from approximately 8.5% for the year ended 31 December 2022 to
approximately 11.3% for the year ended 31 December 2023. The increase in net profit margin
can be primarily attributed to the decrease in the effective tax rate resulting from GLP Software ’s
qualification as a ‘‘Double-soft Enterprise ’’in 2023, leading to a full exemption from its corporate
income tax. This favorable tax treat ment positively impacted the Group ’s net profit margin,
allowing for a higher portion of revenue to contribute towards the Group ’s net profit.
FINANCIAL INFORMATION
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--- page 349 ---
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, the Group principally funded its working capital and other
liquidity requirements through a combination of cash inflow from its operations and bank
borrowings.
Cash flows
The following table sets out a summary of the Group ’s consolidated statements of cash
flows for the Track Record Period, extracted from the Accountants ’ Report in Appendix I to this
prospectus.
Year ended 31 December
2021 2022 2023
RMB’000 RMB ’000 RMB ’000
Operating cash flow before changes in
w o r k i n gc a p i t a l .................................... 5 8 , 0 7 7 6 7 , 1 5 5 1 0 0 , 4 8 1
Changes in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67,896) (100,719) (42,250)
Cash (used in)/generated from operations . . . . . . . . . . . . . . . . . . . . (9,819) (33,564) 58,231
I n c o m et a xp a i d ..................................... ( 2 , 4 2 7 ) ( 3 , 1 2 3 ) ( 9 , 7 9 3 )
Net cash (used in)/generated from operating activities ......... (12,246) (36,687) 48,438
Net cash used in investing activities ...................... (7,497) (8,404) (706)
Net cash generated from/(used in) financing activities ......... 50,604 73,887 (34,807)
Net increase in cash and cash equivalents
d u r i n gt h ey e a r .................................... 3 0 , 8 6 1 2 8 , 7 9 6 1 2 , 9 2 5
Cash and cash equivalents at the beginning of the year . . . . . . . . . . 8,989 39,850 68,646
E f f e c to ff o r e i g ne x c h a n g e .............................. –– (31)
Cash and cash equivalents at the end of the year ............ 39,850 68,646 81,540
Operating activities
The Group ’s net cash used in operating activities for the year ended 31 December 2021
was approximately RMB12.2 million and was prima rily attributable to its profit before tax of
approximately RMB40.9 million as adjusted for non-cash and non-operating items of
approximately RMB17.2 million, net cash out flows from changes in working capital of
approximately RMB67.9 million and income tax paid of approximately RMB2.4 million.
Adjustments for non-cash and non-operating items primarily included interest expenses of
approximately RMB10.9 million, depreciatio n charges of approximately RMB2.6 million and
impairment losses recognised of approximately RMB3.8 million. Net cash outflows from changes
in working capital primarily resulted from increase in contract assets of approximately RMB73.8
million and increase in non-current trade and other receivables of ap proximately RMB21.6
million, as a result of the growth of the Group ’s business, and was partially offset by the
increase in trade and other payables of appro ximately RMB100.8 million, as a result of the
growth of the Group ’s business.
FINANCIAL INFORMATION
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--- page 350 ---
The Group ’s net cash used in operating activities for the year ended 31 December 2022
was approximately RMB36.7 million and was prima rily attributable to its profit before tax of
approximately RMB38.9 million as adjusted for non-cash and non-operating items of
approximately RMB28.2 million, net cash out flows from changes in working capital of
approximately RMB100.7 million and income tax paid of approximately RMB3.1 million.
Adjustments for non-cash and non-operating items primarily included interest expenses of
approximately RMB15.1 million, depreciatio n charges of approximately RMB2.3 million and
impairment losses recognised of approximat ely RMB10.8 million. Net cash outflows from
changes in working capital primarily resulted from (i) increase in contract assets of
approximately RMB27.7 million, as a result of the delay of final inspecti ons conducted by the
Group ’s customers, (ii) increase in t rade and other receivables of a pproximately RMB17.2 million
as a result of the delayed settlement of customers ’ account, and (iii) decrease in trade and other
payables of approximately RMB6.0 million, whi ch was in line with the decrease in the Group ’s
revenue.
The Group ’s net cash generated in operating activities for the year ended 31 December
2023 was approximately RMB48.4 million and was pri marily attributable to its profit before tax of
approximately RMB70.0 million as adjusted for non-cash and non-operating items of
approximately RMB30.5 million, net cash inflows from changes in working capital of
approximately RMB42.3 million and income tax paid of approximately RMB9.8 million.
Adjustments for non-cash and non-operating items primarily included depreciation charges of
approximately RMB2.3 million and interest expenses of approximately RMB16.7 million. Net
cash outflows from changes in working capital primarily resulted from increase in contract assets
of approximately RMB186.0 million and the inc rease in non-current trade receivables of
approximately RMB11.9 million, which was g enerally in line with growth of the Group ’s business,
and was partially offset by decrease in trade and other payables of approximately RMB120.0
million, which was generally in line with the growth of the Group ’s businesses.
Investing activities
The Group ’s net cash used in investing activities for the year ended 31 December 2021
was approximately RMB7.5 million and was primarily attributable to the combined effects of cash
outflows of approximately RMB7.6 million resulting from payments for the purchase of property,
plant and equipment which was offset by cash i nflows of approximately RMB0.1 million from
interest income received.
The Group ’s net cash used in investing activities for the year ended 31 December 2022
was approximately RMB8.4 million and was primarily attributable to the combined effects of cash
outflows of approximately RMB8.5 million resulting from payments for the purchase of property,
plant and equipment which was offset by cash i nflows of approximately RMB0.1 million from
interest income received.
The Group ’s net cash used in investing activities for the year ended 31 December 2023
was approximately RMB0.7 million and was primarily attributable to the combined effects of cash
outflows of approximately RMB0.9 million resulting from payments for the purchase of property,
plant and equipment which was offset by cash i nflows of approximately RMB0.2 million from
interest income received.
FINANCIAL INFORMATION
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--- page 351 ---
Financing activities
The Group ’s net cash generated from financing activities for the year ended 31 December
2021 was approximately RMB50.6 million and was p rimarily attributable to the combined effects
of cash inflows from bank borrowings of approximately RMB311.0 million, which was offset by
cash outflows from (i) repayment of bank borro wings of approximately RMB205.0 million, (ii)
share repurchases of approximately RMB41.6 million and (iii) interest payments of
approximately RMB13.2 million.
The Group ’s net cash generated from financing activities for the year ended 31 December
2022 was approximately RMB73.9 million and was p rimarily attributable to the combined effects
of cash inflows from (i) bank borrowings of approximately RMB407.0 million and (ii) capital
injections from shareholders of approximately RMB27.7 million, which was offset by cash
outflows from (i) repayment of bank borrowing s of approximately RMB343.0 million and (ii)
interest payments of appr oximately RMB15.3 million.
The Group ’s net cash used in financing activities for the year ended 31 December 2023
was approximately RMB34.8 million and was prim arily attributable to the combined effects of
cash outflows from (i) repayment of bank borrowing s of approximately RMB425.0 million and (ii)
interest payments of approximately RMB16.4 million, which was offset by cash inflows from
bank borrowings of approximately RMB397.0 million.
Net current assets
The following table sets out the Group ’s current assets and current liabilities as at the
dates indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB ’000 RMB ’000 RMB ’000 RMB ’000
(unaudited)
Current assets
Inventories and other contract costs . . . . . . . . 20,295 20,195 11,240 10,808
C o n t r a c ta s s e t s ..................... 5 1 3 , 4 6 2 5 3 9 , 6 4 5 7 2 6 , 8 2 9 7 0 1 , 7 6 9
T r a d ea n do t h e rr e c e i v a b l e s............. 2 1 9 , 7 5 3 3 0 4 , 9 6 9 2 4 4 , 6 0 1 2 3 9 , 0 5 2
O t h e rf i n a n c i a la s s e t s ................. 6 9 3 4 3 4
P l e d g e db a n kd e p o s i t s ................. 5 , 2 8 1 5 , 3 6 6 3 , 1 9 3 3 , 1 9 3
C a s ha n dc a s he q u i v a l e n t s .............. 3 9 , 8 5 0 6 8 , 6 4 6 8 1 , 5 4 0 1 6 , 5 9 2
T o t a lc u r r e n ta s s e t s ................... 798,647 938,830 1,067,437 971,448
FINANCIAL INFORMATION
– 342 –


--- page 352 ---
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB ’000 RMB ’000 RMB ’000 RMB ’000
(unaudited)
Current liabilities
T r a d ea n do t h e rp a y a b l e s ............... 4 4 3 , 5 4 0 4 3 7 , 5 5 1 6 7 7 , 5 1 4 4 7 8 , 6 3 3
Contract liabilities . . .................. 5 , 1 0 2 7 , 6 4 4 4 , 7 9 5 6 8 0
Lease liabilities . . . .................. 1 1 1 4 5 1 4 5 1 4 2
B a n kb o r r o w i n g s ..................... 3 1 1 , 4 4 9 3 7 5 , 1 9 8 3 4 7 , 4 5 8 3 3 9 , 0 0 0
C u r r e n tt a x a t i o n..................... 9 , 1 9 5 2 4 , 9 0 3 1 , 2 5 8 –
T otal current liabilities . . . .............. 769,397 845,341 1,031,170 818,455
Net current assets ................... 29,250 93,489 36,267 152,994
During the Track Record Period, the Group ’s current assets primarily comprised contract
assets, trade and other receivables, and cash and cash equivalents, which collectively
accounted for more than 90% of the Group ’s current assets during the period. Meanwhile, its
current liabilities primarily comprised trade an d other payables and bank borrowings, which
collectively accounted for more than 95% of the Group ’s current liabilities during the period. The
Group maintained a net current asset position throughout the Track Record Period.
The Group ’s net current assets increased from app roximately RMB29.3 million as at 31
December 2021 to approximately RMB93.5 million as at 31 December 2022. The increase was
mainly due to the increase in curr ent assets, which outweighed the increase in current liabilities
during the period. The increase in current assets was primarily driven by an increase in contract
assets, trade receivables and cash and cash equivalents. The increase in contract assets and
trade receivables was attributed to the growth of the Group ’s business and was also impacted
by delayed settlement by its customers due to the prolonged inspection processes. The increase
in cash and cash equivalents was mainly due to the fund raised through short-term bank
borrowings. However, the increase in current liabilities was mainly due to an increase in short-
term bank borrowings to enhance liquidity of the Group.
The Group ’s net current assets decreased from approximately RMB93.5 million as at 31
December 2022 to approximately RMB36.3 m illion as at 31 December 2023. The decrease was
mainly due to the increase in current liabilities, which outweighed the increase in current assets
during the year. The increase in current liabilities was primarily driven by a significant increase
of amounts due to shareholders as a result of the inclusion of the consideration payable by
Jiangxi Zhongge for the acquisition of approximately 90.1% of Zhonggan Communication ’s
equity interest in aggregate from Mr. Liu, Ms. T ao Xiulan, Mr. Liu Dingyi, Mr. Liu Dingli and Ms.
Yeung.
FINANCIAL INFORMATION
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--- page 353 ---
The Group ’s net current assets increased from app roximately RMB36.3 million as at 31
December 2023 to approximately RMB153.0 milli on as at 30 April 2024. The major reason was
that in early 2024, the shareholders of Zhonggan Communication provided approximately
RMB127.7 million as a gift in order to facilitate the transfer payment from Jiangxi Zhongge to the
relevant shareholders as part of the Reorganisation. As at the 30 April 2024, approximately
RMB127.7 million of the amounts due to sharehol ders as at 31 December 2023 has been settled
upon completion of the transfer payment.
WORKING CAPITAL
The Directors are of the opinion that, after due and careful enquiry by the Company and
the Directors in relation to the financial resources available to the Group, particularly the funds
generated internally from its operations, the ava ilability of banking facilities and the estimated
net proceeds from the Global Offering, the Group has sufficient working capital for its present
requirements and for the next 12 months from the date of this prospectus.
The Directors confirmed that there were breaches of covenants under loan agreements
during the Track Record Period. As at 31 December 2021, 2022 and 2023, the agreements with
respect to the Group ’s borrowings with Nanchang Xihu Branch of China Construction Bank
Corporation which amounted to approxim ately RMB155.2 million, RMB155.1 million and
RMB127.2 million, were subject to loan covenants relating to certain financial ratios based on
the borrower ’s balance sheet that are commonly found in lending arrangements with financial
institutions, one of which requires that the gearing ratio of the Group shall not be more than 65%
for a period of three consecutive months or more. However, during the Track Record Period, the
Group ’s gearing ratio fell short of such requirement of the loan covenant under the loan
agreements. As advised by the PRC Legal Advisers, according to the terms of the loan
agreements, if the Company were to breach such covenants, the relevant bank borrowings may
become repayable on demand. However, according to the PRC Legal Advisers, the Company
has obtained a waiver from the relevant principal bank in which the bank has confirmed that
despite the breach of certain loan covenants, the Group ’s bank borrowings granted will remain
valid for the remaining term of the bank borrowings, which are set to expire between the period
from October 2024 to April 2025. Based on the above, the PRC Legal Advisers are of the view
that the possibility for the relevant principal bank to demand immediate repayment of the bank
borrowings by the Group is low.
Additionally, the Group is also subject to other restrictive financial loan covenants, which
may be material to the Group, under its certain bank borrowings during the Track Record Period
and up to 30 April 2024. These loan covenants included, among others, that (i) the current ratio
of the Group shall not fall under 1.0 for a period of three consecutive months or more; (ii) the
ratio of the Group ’s contingent liabilities relative to its net assets must not exceed 65% for a
period of three consecutive months or more; and (iii) the Group must maintain profitability (i.e.
net profit position) for the financial year. As at 31 December 2021, 2022 and 2023 and 30 April
2024, the Group ’s current ratios were approximately 1.0 , 1.1, 1.0 and 1.2 times, respectively.
The Group ’s net profit for the year/period also fulfilled the profitability requirements under the
loan covenants during the Track Record Period and up to 30 April 2024. Furthermore, as
confirmed by the Directors, the Group did not ha ve any contingent liabilities during the Track
R e c o r dP e r i o da n du pt o3 0A p r i l2 0 2 4 .
FINANCIAL INFORMATION
– 344 –


--- page 354 ---
In view of the above breach, the Group has implemented enhanced internal control policies
to prevent the recurrence of similar incidents and to observe its compliance with the relevant
restrictive financial loan covenants on an on-goin g basis. Such internal control policies include:
(i) whenever the Group intends to obtain new bank loans, the finance department is responsible
for preparing and regularly updating the financial plan, which is subject to review and approval
by the head of the finance department, the chief financial officer and the chairman of the Board;
and (ii) the finance department carries out an on-going monitoring process to actively monitors
the Group ’s compliance status with the bank loans, which apply both (a) when the Group intends
to obtain new bank loans, and (b) on a monthly basis. The finance department will make
calculations against the requirements under the financial covenants specified in the bank loan
agreements. These calculations are then subject to further review and approval by the head of
the finance department and the chief financial officer. Through this monitoring process, the
Directors believe that the Group can ensure on-going compliance with the financial covenants
outlined in the bank loan agreements.
For further details as to the breaches of covenants, please refer to paragraph headed ‘‘Risk
Factors – Risks relating to the Group ’s business – The Group ’s high level of indebtedness may
persist or increase in the future ’’in this prospectus.
The Directors consider the Gro up has ability to obtain sufficient bank borrowings for its
operations and no difficulties are foreseen to secure enough funds to meet its funding needs,
mainly based on (i) the Group did not have any material defaults in payment of bank borrowings
during Track Record Period; (ii) the Group has est ablished robust relationships with reputable
financial institutions over time; (iii) the Group h as actively pursued diversification in its funding
sources, reducing its reliance on a single len der; (iv) the enhanced credibility as a listed
company, which leads to greater access to obtain bank borrowings; and (v) the Group had
unutilised banking facilities o f approximately RMB357.7 million out of total credit lines of
RMB536.0 million as at 30 April 2024.
Although the Group ’s unutilised banking facilities which amounted to approximately
RMB357.7 million as at 30 April 2024 maintained with the Nanchang Xihu Branch of China
Construction Bank Corporation contained restrictive loan covenants relating to certain financial
ratios including the maximum gearing ratio as abovementioned, as the Company has obtained a
waiver from the relevant principal bank which confirmed the validity of the existing banking
facilities, the Directors believe that it would not restrict the Group ’s ability to draw down the
relevant unutilised banking facilities from s uch bank. Such bank borrowings were already
accounted as current liabilities rather than non-cu rrent liabilities, therefo re the breach of certain
loan covenants would not result in any accounting implication to the Group.
FINANCIAL INFORMATION
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--- page 355 ---
Measures to manage the Group ’s liquidity and improve its working capital position
The Directors will continue to closely monitor the Group ’s capital and liquidity requirements
and ensure the sufficiency of the Group ’s working capital to operate its business in a sustainable
manner. In connection with the afore, the Group has adopted certain measures including the
following:
(i) the Group will prepare quarterly working capital forecasts in a timely manner that shall
set out the expected cash inflows and outflows on a monthly basis which the Directors
will review together with cash flow statem ents to enable the Group to better manage
its financial resources in the near term;
(ii) the Group will prepare monthly management accounts in a timely manner and the
monthly management accounts will be reviewed by the Directors and the Group ’s
senior management and be compared with the budgets. Any material variances will be
explained and followed up immediately;
(iii) the Group will continue to actively monit or the certification and payment status of its
projects and customers, including conducting regular reviews of its accounts. The
finance department will also prepare an aging analysis on a monthly basis for review
by the Directors to ascertain if there are any long outstanding receivables and the
Group will assign designated credit control officers who will regularly contact the
debtors and to send payment reminders. Other follow-up actions include (a) active
communications with the customers ’ responsible personnel for certifying completed
works and processing payments; (b) cessation in processing any further orders from
such customer until the overdue balance is recovered; and (c) reviewing the
recoverable amount of each individual trade receivables balance at the end of each
reporting period to ensure adequate im pairment allowances are provided for
irrecoverable amounts; and
(iv) the Group will continue to closely monitor its cash and bank balance through
constantly reviewing its internal records and bank account. When any potential
shortfall in its cash position is identified, th e Group will strive to negotiate for earlier
settlement from its customers and/or request a longer credit period from its suppliers
in order to mitigate the cash flow mismatch. Further, if required, the Group will also
obtain short-term borrowings to fund its capital needs.
FINANCIAL INFORMATION
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--- page 356 ---
ANALYSIS OF MAJOR COMPONENTS OF THE CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Inventories and other contract costs
T h ef o l l o w i n gt a b l es e t so u tt h eG r o u p’s inventories and other contract costs as at the
dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Inventories
– H a r d w a r e............................... 5 , 0 7 8 3 , 7 2 9 5 2 0
– S o f t w a r e ............................... 5 9 1 5 9 2 6 5
O t h e rc o n t r a c tc o s t s .......................... 1 4 , 6 2 6 1 6 , 4 0 7 1 0 , 4 5 5
Total .................................... 20,295 20,195 11,240
During the Track Record Period, the Group ’s inventories mainly comprised hardware and
software which were primarily allocated for use in i ts Digitalisation Solution Services projects.
During the implementation of its projects, parti cularly the T elecommunica tions Infrastructure
Services projects, the Group incurred various costs, including labour procurement costs and
direct materials costs, where the costs were te mporarily capitalised as a balance sheet item,
specifically other contract costs. Contract co sts are recognised as part of cost of sales in the
statement of profit or loss and other comprehensive income in the period in which revenue is
recognised.
The Group ’s inventories and other contract costs remained stable at approximately
RMB20.3 million and RMB20.2 million as at 31 De cember 2021 and 2022, respectively. The
Group ’s inventories and other contra ct costs decreased from approximately RMB20.2 million as
at 31 December 2022 to approximately RMB11.2 million as at 31 December 2023. The decrease
was mainly attributed by a decrease in inventories and other contract costs which was primarily
due to the fact that the hardware purchased and other contract costs had been converted into
cost of sales according to the prog ress of the relevant projects.
As at the Latest Practicable Date, approximately RMB10.7 million, representing
approximately 95.2% of the Group ’s inventories and other contract costs as at 31 December
2023 had been utilised.
FINANCIAL INFORMATION
– 347 –


--- page 357 ---
Stock turnover days
The following table sets out the Group ’s stock turnover days during the Track Record
Period:
Year ended 31 December
2021 2022 2023
S t o c kt u r n o v e rd a y s( d a y s ) ...................... 2 7 . 0 2 3 . 9 1 2 . 5
Note: Average balance of inventories and other contract costs multiplied by number of days in that year divided by total
cost of sales.
During the Track Record Period, the Group maintained a relatively low stock turnover days,
primarily due to the fact that a large part of the material applied to its T elecommunications
Infrastructure Services projec ts was supplied by its customers and labour suppliers. The Group ’s
stock turnover days slightly decreased from approximately 27.0 days for the year ended 31
December 2021 to approximately 23.9 days for the year ended 31 December 2022. This
decrease was attributed mainly to the decrease in the average balance of inventories and other
contract costs in 2022 as a result of the Group ’s prioritisation of Software Solution Services
projects over Integrated Solution Services projects. Therefore, no significant costs for hardware
were incurred for the p rojects. The Group ’s stock turnover days further decreased to
approximately 12.5 days for the year ended 31 December 2023, the decrease was mainly due
to the fact that the hardware purchased and other contract costs had been converted into cost of
sales according to the progress of the relevant projects.
Contract assets
The Group ’s contract assets mainly represented a conditional right to receive payment from
its customers for its T elecommunications Infrast ructure Services projects. The contract assets
arise when the Group makes efforts or input towards the satisfaction of performance obligation
under its T elecommunications Infrastructure Service projects, however, the right to receive
payment from its customers is subject to the Group satisfying certain pre-agreed conditions.
Upon satisfying such conditions, the contract assets will then be transferred to trade
receivables. Based on the contracts between the Group and the relevant customers, the Group
must have completed the relevant works required and passed the inspection and acceptance for
progress payment, settlement audit for final payment and expiry of defect liability period for
retention money. Thus, the transfer of the Group ’s contract assets to trade receivables will
depend on the timing of completion of certain procedures by the customers (i.e. project
inspection and acceptance and settlement audit), which may vary among different customers
based on their own internal procedural requirements and other consideration. For details, please
refer to paragraph headed ‘‘Business – Operation flow ’’ in this prospectus. The following table
sets out the Group ’s contract assets as at the dates indicated:
FINANCIAL INFORMATION
– 348 –


--- page 358 ---
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
B a l a n c e .................................. 5 1 4 , 3 9 6 5 3 7 , 8 2 5 7 2 8 , 3 9 2
L e s s :l o s sa l l o w a n c e .......................... ( 1 , 5 0 3 ) ( 2 , 2 0 2 ) ( 1 , 9 5 7 )
512,893 535,623 726,435
Digitalisation Solution Services
B a l a n c e .................................. 7 2 8 4 , 9 7 2 4 3 1
L e s s :l o s sa l l o w a n c e .......................... ( 1 5 9 ) ( 9 5 0 ) ( 3 7 )
569 4,022 394
Total .................................... 513,462 539,645 726,829
The Group ’s contract assets were assessed for ECLs which was estimated using a
provision matrix based on the Group ’s historical credit loss experience, adjusted for factors that
are specific to its debtors and an assessment of both the current and forecast general economic
conditions at the end of each year of the Track Record Period. The ECLs recognised for
contract assets were approximately RMB1.7 mil lion, RMB3.2 million and RMB2.0 million for the
year ended 31 December 2021, 2022 and 2023, respectively.
As at the Latest Practicable Date, approxi mately RMB381.3 milli on, RMB280.4 million and
RMB128.8 million, representing approximately 74.0%, 51.6%, and 17.7% of the Group ’s contract
assets as at 31 December 2021, 2022 and 2023, respectively, had been subsequently
transferred to trade receivables. The Directors are of the view that there is no significant
concern regarding the recoverability of the Group ’s contract assets despite the relatively low
percentage of subsequent conversion of its contract assets as at 31 December 2023 into trade
receivables. T o the best knowledge and belief of the Directors, it can be attributed to the
slowdown in business activities, including t he completion of inspection and acceptance
procedures and/or settlement audit procedures, during the traditional slack season in the PRC
including the periods before and after the Chinese New Year. As a result, the conversion of
contract assets to trade receivables would be slower in the first quarter of the year, leading to a
lower percentage of subsequent conversion.
FINANCIAL INFORMATION
– 349 –


--- page 359 ---
The following table sets out the aging analysis of the Group ’s contract assets by (i)
business segments and (ii) project and retention money, as at the dates indicated:
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services:
Project money
W i t h i n6m o n t h s ................................ 1 8 5 , 0 6 6 1 6 4 , 8 0 6 2 6 1 , 4 0 6
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 5 8 , 6 5 3 9 2 , 0 4 0 1 3 5 , 3 2 7
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 9 1 , 1 1 3 9 5 , 7 7 8 9 2 , 7 6 6
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 2 1 , 5 6 8 9 7 , 3 8 6 5 7 , 3 3 7
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 4 9 , 1 5 8 6 0 , 2 3 5 1 2 4 , 0 4 6
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. 3 , 8 7 4 2 0 , 5 5 2 4 4 , 4 0 1
M o r et h a n4 8m o n t h s ............................. 1 3 8 7 1 4 9 , 7 6 8
B a l a n c e ..................................... 5 0 9 , 5 7 1 5 3 1 , 5 1 1 7 2 5 , 0 5 1
L e s s :l o s sa l l o w a n c e ............................. ( 4 4 4 ) ( 9 9 6 ) ( 1 , 2 9 2 )
S u b - t o t a l ..................................... 509,127 530,515 723,759
Retention money for projects
W i t h i n6m o n t h s ................................ 2 , 1 0 9 3 , 9 3 1 1 , 8 8 0
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 2 , 4 8 0 1 , 6 9 2 1 , 1 1 4
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 1 9 8 5 1 8 1 9 7
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 1 7 1 7 4 1 5 0
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 1 3 ––
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. 7 ––
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... 4 , 8 2 5 6 , 3 1 4 3 , 3 4 1
L e s s :l o s sa l l o w a n c e ............................. ( 1 , 0 5 8 ) ( 1 , 2 0 6 ) ( 6 6 5 )
S u b - t o t a l ..................................... 3 , 7 6 7 5 , 1 0 8 2 , 6 7 6
Total contract assets of Teleco mmunications Infrastructure
Services (net of loss allowance) ................... 512,893 535,623 726,435
FINANCIAL INFORMATION
– 350 –


--- page 360 ---
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Digitalisation Solution Services
Project money
W i t h i n6m o n t h s ................................ –––
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... –– 245
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. –––
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. –––
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. –––
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. –––
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... –– 245
L e s s :l o s sa l l o w a n c e ............................. –––
S u b - t o t a l ..................................... –– 245
Retention money for projects
W i t h i n6m o n t h s ................................ 4 0 4 , 1 6 5 –
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 1 9 2 3 8 –
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 5 7 0 ––
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. –– 186
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. – 570 –
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. –––
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... 7 2 8 4 , 9 7 2 1 7 6
L e s s :l o s sa l l o w a n c e ............................. ( 1 5 9 ) ( 9 5 0 ) ( 3 7 )
S u b - t o t a l ..................................... 569 4,022 149
Total contract assets of Digitalisation Solution Services
(net of loss allowance) ......................... 569 4,022 394
FINANCIAL INFORMATION
– 351 –


--- page 361 ---
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Overall
W i t h i n6m o n t h s ................................ 1 8 7 , 2 1 5 1 7 2 , 9 0 1 2 6 3 , 2 8 7
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 6 1 , 2 5 1 9 3 , 9 6 9 1 3 6 , 6 8 7
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 9 1 , 8 8 1 9 6 , 2 9 6 9 2 , 9 6 3
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 2 1 , 5 8 5 9 7 , 5 6 1 5 7 , 6 7 2
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 4 9 , 1 7 1 6 0 , 8 0 5 1 2 4 , 0 4 5
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. 3 , 8 8 2 2 0 , 5 5 2 4 4 , 4 0 1
M o r et h a n4 8m o n t h s ............................. 1 3 8 7 1 4 9 , 7 6 8
B a l a n c e ..................................... 5 1 5 , 1 2 4 5 4 2 , 7 9 7 7 2 8 , 8 2 3
L e s s :l o s sa l l o w a n c e ............................. ( 1 , 6 6 2 ) ( 3 , 1 5 2 ) ( 1 , 9 9 4 )
Total ....................................... 513,462 539,645 726,829
(note)
Note: As at 31 December 2023, the Group ’s contract assets amounted to approximately RMB726.8 million, with
approximately RMB724.4 million (equivalent to approxim ately 99.4%), were attributed to the Big Three and the
world ’s largest telecommunications tower infrastructure service provider.
The Group held significant contract assets aged more than 12 months, primarily
representing project money and retention money from Infrastructure Construction Services
projects. The extended aging was a result of prolonged inspection, acceptance, and settlement
audit processes by the customers. Revenue and corresponding contract assets are recognised
based on work order progress, with a portion transferred to trade receivables as progress
payments after customer or its agent ’s inspection and acceptance, typically occurring six to 12
months after initial recognition. The remaining portion, including final payments and retention
money, is transferred to trade receivables after settlement audit for final payment and expiration
of the defect liability period, generally occu rring 17 to 36 months and 29 to 60 months after
initial recognition of the contract assets, respectively.
FINANCIAL INFORMATION
– 352 –


--- page 362 ---
The following table sets out the Group ’s contract assets attributable to the
T elecommunications Infrastructure Services undertaken by the Group breakdown by (i) pending
inspection and acceptance by the relevant customers and (ii) completion of inspection and
acceptance but pending issuance of VAT invoices, as at the dates indicated:
As at 31 December
As at the
Latest
Practicable
Date2021 2022 2023
RMB ’000 RMB ’000 RMB ’000 RMB ’000
Pending inspection and acceptance
– Project money . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,170 216,645 351,585 348,694
– Retention money of projects . . . . . . . . . . . . . . . . . . 4,761 4,385 2,421 1,927
Completion of inspection and acceptance but pending
issuance of VAT invoices . . . . . . . . . . . . . . . . . . . . 290,465 316,795 374,387 390,673
Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514,396 537,825 728,393 741,294
L e s s :l o s sa l l o w a n c e ......................... ( 1 , 5 0 3 ) ( 2 , 2 0 2 ) ( 1 , 9 5 8 ) ( 1 , 7 0 1 )
Total ................................... 512,893 535,623 726,435 739,593
As at the Latest Practicable Date, the Group ’s contract assets attributable to the
Infrastructure Construction Services undert aken by the Group but pending inspection and
acceptance by the relevant customers remained unbilled and not being transferred to trade
receivables was mainly due to the prolonged inspection, acceptance, and settlement audit
processes by the customers before the Group becomes eligible to issue VAT invoices to
customers.
For the years ended 31 December 2021, 2022 and 2023, the Group recognised revenue
attributable to services undertaken by the Group but pending inspection and acceptance by the
relevant customers of approxi mately RMB152.0 million, RM B120.4 million and RMB219.3
million, respectively.
FINANCIAL INFORMATION
– 353 –


--- page 363 ---
The following table sets out the movement of the Group ’s contract assets during the Track
Record Period:
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Project money
B a l a n c ea sa t1J a n u a r y ....................... 4 3 4 , 6 7 3 5 0 9 , 5 7 1 5 3 1 , 5 1 0
I n c r e a s ed u r i n gt h ey e a r ....................... 4 0 2 , 1 6 4 3 7 8 , 1 4 4 5 3 6 , 3 5 9
T r a n s f e rt ot r a d er e c e i v a b l e s ..................... ( 3 2 7 , 2 6 6 ) ( 3 5 6 , 2 0 5 ) ( 3 4 2 , 5 7 2 )
B a l a n c e .................................. 5 0 9 , 5 7 1 5 3 1 , 5 1 0 7 2 5 , 2 9 7
L e s s :l o s sa l l o w a n c e .......................... ( 4 4 4 ) ( 9 9 6 ) ( 1 , 2 9 3 )
509,127 530,514 724,004
Retention money for projects
B a l a n c ea sa t1J a n u a r y ....................... 6 , 6 6 3 5 , 5 5 2 1 1 , 2 8 7
I n c r e a s ed u r i n gt h ey e a r ....................... 4 , 7 6 0 1 0 , 0 2 5 2 , 9 9 4
T r a n s f e rt ot r a d er e c e i v a b l e s ..................... ( 5 , 8 7 0 ) ( 4 , 2 9 1 ) ( 1 0 , 7 5 4 )
B a l a n c e .................................. 5 , 5 5 2 1 1 , 2 8 7 3 , 5 2 6
L e s s :l o s sa l l o w a n c e .......................... ( 1 , 2 1 7 ) ( 2 , 1 5 6 ) ( 7 0 1 )
4,335 9,131 2,825
Total .................................... 513,462 539,645 726,829
Contract assets turnover days
The following table sets out the Group ’s contract assets turnover days during Track Record
Period:
Year ended 31 December
2021 2022 2023
C o n t r a c ta s s e t st u r n o v e rd a y s( d a y s ) ............... 3 6 4 . 3 4 6 7 . 4 3 8 0 . 9
Note: Average balance of contract assets multiplied by numbe r of days in that year divided by total revenue.
FINANCIAL INFORMATION
– 354 –


--- page 364 ---
The Group ’s contract assets turnover days decreased from approximately 460.4 days for
the year ended 31 December 2020 to approximately 364.3 days for the year ended 31
December 2021. Such decrease was mainly due to a significant increase in the Group ’s
revenue, resulting from the recognition of a substantial amount of revenue in respect of a
sizable provincial transmission pipeline engineering construction project in 2021. However, the
Group ’s contract assets turnover days increased from approximately 364.3 days for the year
ended 31 December 2021 to approximately 467.4 days for the year ended 31 December 2022.
Such increase was mainly due to (i) the decrease in revenue as a result of the prioritisation of
Software Solution Services over Integrated Solution Services projects in 2022; and (ii) the
decrease in revenue recognised from a sizable p rovincial transmission pipeline engineering
construction project, as a result of a decrease in work orders placed by the respective customer
in respect of that project. The Group ’s contract assets turnover days decreased from
approximately 467.4 days for the year ended 31 December 2022 to approximately 380.9 days
for the year ended 31 December 2023, the decrease was mainly due to the significant increase
in the Group ’s revenue contributed by the growth of both T elecommunications Infrastructure
Solution Services business segment and Digitalisation Solution Services business segment in
2023.
Contract liabilities
The Group ’s contract liabilities represented cons ideration received in advance from its
customers for its T elecommunications Infrastruct ure Services projects and Digitalisation Solution
Services projects, representing contract lia bilities would be recognised if the Group has an
unconditional right to receive consideration before the Group recognises the related revenue.
Upon achieving specified contractual milestones or fully satisfying certain performance
obligation, the contract liabilities would be reclassified as revenue. The following table sets out
the Group ’s contract liabilities as at the dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Billings in advance . .......................... 5 , 1 0 2 7 , 6 4 4 4 , 7 9 5
The Group ’s contract liabilities increased from approximately RMB5.1 million as 31
December 2021 to approximately RMB7.6 million as at 31 December 2022. The increase of the
Group ’s contract liabilities was mainly driven by the r apid growth of its Digitalisation Solution
Services business segment, since the Group may require a prepayment from its customers
before commencement of projects. As at 31 December 2023, the Group recorded a decrease in
contract liabilities, amounting to approximate ly RMB4.8 million. This decrease can be primarily
attributed to a reduction in the number of Integrated Solution Services projects and Software
Solution Services projects on hand compared to the previous year.
As at the Latest Practicable Date, appr oximately RMB4.1 million, representing
approximately 85.9% of the balance of contract liabilities as at 31 December 2023 had been
subsequently recognised as the Group ’s revenue.
FINANCIAL INFORMATION
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--- page 365 ---
Trade and other receivables
The following table sets out a summary of the Group ’s trade and other receivables as at the
dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
T r a d er e c e i v a b l e s............................ 2 2 9 , 7 6 1 2 7 2 , 7 7 8 2 7 5 , 6 1 3
Bills receivable .............................. – 568 –
Trade and bills receivables ...................... 2 2 9 , 7 6 1 2 7 3 , 3 4 6 2 7 5 , 6 1 3
L e s s :l o s sa l l o w a n c e .......................... ( 4 , 8 1 8 ) ( 1 3 , 1 9 2 ) ( 2 5 , 6 1 8 )
Trade and bills receivables,
n e to fl o s sa l l o w a n c e ........................ 224,943 260,154 249,995
O t h e rr e c e i v a b l e s ,n e to fl o s sa l l o w a n c e............. 2 3 , 4 4 0 1 2 , 4 1 0 7 , 2 2 6
D e f e r r e dV A Tr e f u n d .......................... 6 , 2 4 6 5 , 3 6 9 5 , 2 9 9
P r e p a y m e n tf o rl a b o u r ,e q u i p m e n ta n ds e r v i c e s ......... 5 , 5 8 3 3 0 , 9 9 5 6 , 8 2 8
A m o u n t sd u ef r o mr e l a t e dp a r t i e s .................. 1 6 6 1 2 , 5 7 4 1 0 9
C u r r e n tt a xp r e p a y m e n t........................ –– 2,280
Total .................................... 260,378 321,502 271,737
Trade and bills receivables
The Group ’s trade and bills receivables mainly comprised receivables for the provision of
T elecommunications Infrastructure Services and Digitalisation Solution Services by the Group.
The Group ’s trade and bills receivables (net of loss allowance) amounted to approximately
RMB224.9 million, RMB260.2 million and RMB250 .0 million as at 31 December 2021, 2022 and
2023, respectively.
The Group ’s trade and bills receivables (net of loss allowance) increased by approximately
15.7% from approximately RM B224.9 million as at 31 December 2021 to approximately
RMB260.2 million as at 31 December 2022, th e increase was mainly contributed by the
T elecommunications Infrastructure Services business segment, as a result of the delayed
settlement of customers ’ accounts. However, despite experiencing growth in gross profit of
Digitalisation Solution Services business segment for the year ended 31 December 2022, the
balance of trade receivables attributed to such business segment did not increase proportionally
t oi t sg r o w t h .T h i sw a sm a i n l yd u et ot h eG r o u p’s prioritisation of Software Solution Services
projects over Integrated Solution Services projects, taking into account the customers ’ demand
and the limited resources available during that period. By focusing on Software Solution
Services, the Group was able to improve its liquidity by avoiding the need for substantial capital
requirements for hardware purchases associated with Integrated Solution Services projects. The
contract sum of these Software Solution Service s projects was relatively lower as compared to
the Integrated Solution Services projects, resulting in a lower balance of sales amount and
corresponding balance of trade receivables. The Group ’s trade and bills receivables (net of loss
allowance) decreased by approximately 3.9% from approximately RMB260.2 million as at 31
December 2022 to approximately RMB250.0 million as at 31 December 2023, the decrease was
FINANCIAL INFORMATION
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--- page 366 ---
mainly due to the increase in loss allowance of t rade and bill receivables for Digitalisation
Solution Services as a result of the extension of payment terms in relation to five Integrated
Solution Services projects. These five Integrated Solution Services projects are assigned to
Customer A and Customer B, with the end users comprising regulatory authorities and public
institution. The payment schedule for these five projects is dependent on the timing of trade
debts settlement by the end users to the Group ’s customers.
Following the COVID-19 pandemic, these end users faced temporary liquidity constraints,
which resulted in payment delays to both Customer A and Customer B. Recognising the
financial challenges faced by the end users, Customer A and Customer B initiated negotiations
with the Group to discuss the possibility of ext ending the payment terms for these projects.
Considering the long-standing business relationship and the background of Customer A and
Customer B, both of which are the Big Three telecommunications network operators in the PRC
and state-owned enterprises, a mutual agreement was reached between the Group and
Customer A or Customer B to extend the payment terms. This agreement serves as a proactive
measure to provide relief to the local government concerned and helps to meet the challenges
posed by the COVID-19 pandemic.
The following table sets out the details relating to the five Integrated Solution Services
projects as mentioned above:
Contract name/
Principal nature
Customer/
End user
Contract
value
Revenue
contribution
(Note)
Commencement
date/
Completion
date
Project
stage
Payment terms before payment
term extension
Payment terms after payment
term extension
Trade receivables and loss
allowance recognised as at the
end of each year during the
Track Record Period
2018 HD probe
integration service
agreement in
Nanchang/
Digital surveillance
Customer A/
Regulatory
authority
RMB65.5
million
RMB56.4
million
31 December
2018/
20 February
2019
Post-completion
stage
Making payment on a quarterly
basis upon the inspection and
acceptance of the completed
work by the end user, and upon
receiving the corresponding
payment from the end user
Making payment of the remaining
balance of approximately
RMB10.8 million before 15 June
2024
Trade receivables as at
31 December 2021:
approximately RMB21.0 million
31 December 2022:
approximately RMB15.9 million
31 December 2023:
approximately RMB10.5 million
Loss allowance as at
31 December 2021:
approximately RMB34,000
31 December 2022:
approximately RMB0.2 million
31 December 2023:
approximately RMB0.6 million
FINANCIAL INFORMATION
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--- page 367 ---
Contract name/
Principal nature
Customer/
End user
Contract
value
Revenue
contribution
(Note)
Commencement
date/
Completion
date
Project
stage
Payment terms before payment
term extension
Payment terms after payment
term extension
Trade receivables and loss
allowance recognised as at the
end of each year during the
Track Record Period
Public security
surveillance
project in
Honggutan New
District/
Digital surveillance
Customer A/
Regulatory
authority
RMB33.4
million
RMB29.3
million
19 March 2021/
31 December
2021
Post-completion
stage
Making payment based on the
following payment terms:
1. If the customer receives
payments from the end user
in each period that are equal
to or greater than the payable
amount as stipulated in the
contract entered into between
the customer and the end
user, the customer will make
the first payment amounted to
one-sixth of the total contract
value after project inspection
and acceptance, and upon the
customer receiving one-sixth
of the total contract value
from the end user.
Subsequently, payments will
be made every six months,
with each payment amounted
to one-sixth of the total
contract value.
2. If the customer receives
payments from the end user
in each period that are less
than the payable amount as
stipulated in the contract
entered into between the
customer and the end user,
the customer will make
payments based on the
corresponding proportion of
the amount received from the
end user. Once the end user
completes the payment of the
remaining amount, the
customer will make a
corresponding payment to
fulfill the remaining contract
value.
Making payment of the remaining
balance based on the following
payment schedule:
1. Make payment of
approximately RMB5.8 million
in September 2023
2. Make payment of
approximately RMB5.8 million
in March 2024
3. Make payment of
approximately RMB5.8 million
in September 2024
4. Make payment of
approximately RMB6.3 million
in March 2025
Trade receivables as at
31 December 2021:
approximately RMB31.2 million
31 December 2022:
approximately RMB27.3 million
31 December 2023:
approximately RMB18.6 million
Loss allowance as at
31 December 2021:
approximately RMB27,000
31 December 2022:
approximately RMB0.1 million
31 December 2023:
approximately RMB0.4 million
Hospital intelligent
informatisation
engineering project
in Linchuan
District/
Digital healthcare
Customer B/
Public
institution
RMB50.7
million
RMB45.0
million
1 December
2021/
30 December
2021
Post-completion
stage
Making payment upon receiving
the corresponding payment from
the end user according to the
following payment schedule:
1. 50% of the total contract
v a l u ew i t h i n1 0w o r k i n gd a y s
after the project inspection
and acceptance
2. 30% of the total contract
v a l u ew i t h i n1 0w o r k i n gd a y s
after 12 months of project
inspection and acceptance
3. 10% of the total contract
v a l u ew i t h i n1 0w o r k i n gd a y s
after 24 months of project
inspection and acceptance
4. 5% of the total contract value
within 10 working days after
36 months of project
inspection and acceptance
5. 5% of the total contract value
within 10 working days after
60 months of project
inspection and acceptance
Making payment of the remaining
balance based on the following
payment schedule:
1. Make payment of
approximately RMB8.0 million
in November 2023
2. Make payment of
approximately RMB15.2 million
in November 2024
3. Make payment of
approximately RMB5.1 million
in November 2025
4. Make payment of
approximately RMB2.5 million
in November 2026
5. Make payment of
approximately RMB2.5 million
in November 2027
Trade receivables as at
31 December 2021:
approximately RMB49.1 million
31 December 2022:
approximately RMB41.4 million
31 December 2023:
approximately RMB24.9 million
Loss allowance as at
31 December 2021:
approximately RMB43,000
31 December 2022:
approximately RMB1.9 million
31 December 2023:
approximately RMB5.2 million
FINANCIAL INFORMATION
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--- page 368 ---
Contract name/
Principal nature
Customer/
End user
Contract
value
Revenue
contribution
(Note)
Commencement
date/
Completion
date
Project
stage
Payment terms before payment
term extension
Payment terms after payment
term extension
Trade receivables and loss
allowance recognised as at the
end of each year during the
Track Record Period
Digital city
management
project (phase 1 –
operation)
agreement in
Qingshan Lake
District/
Digital surveillance
Customer B/
Regulatory
authority
RMB47.1
million
RMB42.9
million
1 December
2019/
10 December
2020
Post-completion
stage
Making payment based on the
following payment schedule:
1. 30% of the total contract
value shall be paid within 7
working days after the initial
equipment installation on the
project site
2. 30% of the total contract
value shall be paid within 7
working days from the date of
project inspection and
acceptance
3. 20% of the total contract
value shall be paid after one
year of the second payment
4. 10% of the total contract
value shall be paid after two
years of the second payment
5. 10% of the total contract
value shall be paid after three
years of the second payment
Making payment of the remaining
balance based on the following
payment schedule:
1. Make payment of
approximately RMB14.1 million
before May 2024
2. Make payment of
approximately RMB9.4 million
before December 2024
3. Make payment of
approximately RMB4.7 million
before December 2025
4. Make payment of
approximately RMB4.7 million
before December 2026
Trade receivables as at
31 December 2021:
approximately RMB32.4 million
31 December 2022:
approximately RMB32.7 million
31 December 2023:
approximately RMB32.9 million
Loss allowance as at
31 December 2021:
approximately RMB28,000
31 December 2022:
approximately RMB0.3 million
31 December 2023:
approximately RMB2.6 million
Digital city
management
project (phase 1 –
surveillance
system integration
service)
agreement/
Digital surveillance
Customer B/
Regulatory
authority
RMB9.8
million
RMB8.5
million
1 November
2020/
31 January
2021
Post-completion
stage
Making payment based on the
following payment schedule:
1. 30% of the total contract
value shall be paid within 7
working days after the initial
equipment installation on the
project site
2. 30% of the total contract
value shall be paid within 7
working days from the date of
project inspection and
acceptance
3. 20% of the total contract
value shall be paid after one
year of the second payment
4. 10% of the total contract
value shall be paid after two
years of the second payment
5. 10% of the total contract
value shall be paid after three
years of the second payment
Making payment of the remaining
balance based on the following
payment schedule:
1. Make payment of
approximately RMB2.9 million
before May 2024
2. Make payment of
approximately RMB2.0 million
before December 2024
3. Make payment of
approximately RMB1.0 million
before December 2025
4. Make payment of
approximately RMB1.0 million
before December 2026
Trade receivables as at
31 December 2021:
approximately RMB6.7 million
31 December 2022:
approximately RMB6.8 million
31 December 2023:
approximately RMB6.8 million
Loss allowance as at
31 December 2021:
approximately RMB0.2 million
31 December 2022:
approximately RMB1.6 million
31 December 2023:
approximately RMB3.4 million
Note: The differences between the contact value and the revenue contribution were mainly attributable to (i) the contract
value is inclusive of taxes, while the r evenue contribution is exclusive of t axes; and (ii) these five Integrated
Solution Services projects underwent significant finan cing component adjustments, with a portion of the amount
being recorded as interest income.
FINANCIAL INFORMATION
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--- page 369 ---
According to the Ipsos Report, some loca l governments in the PRC faced temporary
liquidity constraints under the impact of the COVID-19 pandemic due to most of their resources
being used for implementation of anti-epidemic measures. The end users of the five Integrated
Solution Services projects abovementioned have faced temporary liquidity constraints due to the
responsible allocation of local government funds towards essential precautionary measures
necessitated by the COVID-19 pandemic during the relevant years. If the end users fail to make
the corresponding payment to the Group ’s customers on time, it would indirectly impact on the
Group ’s liquidity. However, it is crucial to emphasise that such liquidity constraints are of a
temporary nature with a view to combating the COVID-19 pandemic. As such, these temporary
liquidity constraints do not pose a significant threat to the long-term creditworthiness and
financial stability of the end users. Save for the f ive Integrated Solution Services projects, the
balance of long-outstanding trade receivables (overdue more than one year) (net of loss
allowance) as a result of late payment also involves one public institution and two state-owned
enterprises as end users. The balance of these long-outstanding trade receivables (net of loss
allowance) was nil, approxima tely RMB2.3 million and RMB5.8 million as at 31 December 2021,
2022 and 2023, respectively, and has been fully settled as at the Latest Practicable Date.
As advised by the PRC Legal Advisers, according to the general rule of privity of contract
codified in the Civil Code of the People ’s Republic of China （《中華人民共和國民法典》）,i ti s
explicitly stipulated that the rights and obligatio ns arising from a contract are strictly limited to
the parties directly involved in that contract. Therefore, only the contracting parties possess the
authority to enforce the terms of the contract and enjoy and be bound by the related benefits
and obligations. In the specific context of the Group ’s operations, it is evident that the Group and
its customers are the sole contracting parties to their respective agreements, whereas the end
users involved in these arrangements are considered third parties. In projects where long-
outstanding trade receivables exi st, it is important to acknowledge that the ultimate responsibility
for payment rests upon the customers. Although for some of the Group ’s Integrated Solution
Services projects, the Group may only receive payment after the end users have made the
corresponding payment to the Group ’s customers, it should only affect the timing of payment
receipts. Therefore, when assessi ng the possibility of recovering l ong-aged trade r eceivables, a
significant factor to conside r is the credibility and financial capability of the Group ’s customers.
However, when determining the timing of recove rability for outstandin g amounts of long-aged
trade receivables, the credibility and financi al capability of the end users in each underlying
project play a major role. Considering the abovementioned reasons and that most of the
customers of projects with long-outstanding trade receivables are state-owned enterprises with
strong financial strength and high credibility, the Directors consider the trade receivables in
respect of these projects to be recoverable.
FINANCIAL INFORMATION
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--- page 370 ---
The following table sets out the aging analysis of the Group ’s trade and bills receivables by
(i) business segments, and (ii) progress payment, final payment and retention money, as at the
dates indicated:
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Telecommunications Infrastructure Services
Progress payment
W i t h i n6m o n t h s ................................ 2 7 , 5 1 5 3 1 , 1 3 3 2 1 , 8 4 8
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 9 , 7 6 6 5 , 4 4 1 2 , 6 9 7
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 4 , 1 0 3 1 , 8 2 3 1 , 7 9 1
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 3 4 0 2 , 9 1 7 2 , 2 8 1
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 1 7 6 0 6 1 , 8 0 3
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. 2 3 1 7 2 2 1
M o r et h a n4 8m o n t h s ............................. 4 8 4 5 0 6 5 2 3
B a l a n c e ..................................... 4 2 , 2 4 7 4 2 , 4 4 2 3 1 , 1 6 4
L e s s :l o s sa l l o w a n c e ............................. ( 1 , 6 4 7 ) ( 2 , 7 5 9 ) ( 3 , 6 8 9 )
S u b - t o t a l ..................................... 40,600 39,683 27,475
Final payment
W i t h i n6m o n t h s ................................ 2 9 , 7 5 1 2 5 , 8 6 8 3 0 , 3 1 8
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 , 9 8 9 6 , 6 9 0 1 1 , 7 1 1
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 7 2 7 3 6 8 1 , 2 1 9
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 3 1 1 5 0 5 1 7 8
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 3 9 0 5 2 2 1 3 8
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. – 390 428
M o r et h a n4 8m o n t h s ............................. 2 2 3 9 2
B a l a n c e ..................................... 3 3 , 1 7 0 3 4 , 3 4 5 4 4 , 3 8 4
L e s s :l o s sa l l o w a n c e ............................. ( 7 2 1 ) ( 1 , 4 0 5 ) ( 2 , 1 4 8 )
S u b - t o t a l ..................................... 32,449 32,940 42,236
Retention money for projects
W i t h i n6m o n t h s ................................ –––
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... – 27 234
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 1 , 7 6 4 8 0 1 9 7 8
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 1 , 7 2 1 1 , 0 5 6 4 9 0
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 9 6 9 1 , 7 4 1 1 , 3 4 3
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. 1 0 5 2 5 1 , 4 5 6
M o r et h a n4 8m o n t h s ............................. – 10 525
B a l a n c e ..................................... 4 , 4 6 4 4 , 1 5 9 5 , 0 2 6
L e s s :l o s sa l l o w a n c e ............................. ( 1 , 7 8 6 ) ( 1 , 6 6 4 ) ( 2 , 0 1 1 )
S u b - t o t a l ..................................... 2,678 2,496 3,015
Total trade and bills receivables of Telecommunications
Infrastructure Services (net of loss allowance) ......... 75,727 75,119 72,726
FINANCIAL INFORMATION
– 361 –


--- page 371 ---
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Digitalisation Solution Services
Progress payment
W i t h i n6m o n t h s ................................ –––
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... –––
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. –––
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. –––
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. –––
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. –––
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... –––
L e s s :l o s sa l l o w a n c e ............................. –––
S u b - t o t a l ..................................... –––
Final payment
W i t h i n6m o n t h s ................................ 1 3 1 , 4 5 6 1 4 2 , 2 0 3 6 8 , 5 0 3
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 0 , 2 5 8 2 5 , 0 5 9 7 3 , 4 9 2
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 4 , 5 0 9 1 6 , 1 3 7 3 3 , 2 9 5
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. – 8,820 10,599
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. 3 , 5 5 4 – 5,745
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. –––
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... 1 4 9 , 7 7 7 1 9 2 , 2 1 9 1 9 1 , 6 3 4
L e s s :l o s sa l l o w a n c e ............................. ( 6 2 3 ) ( 7 , 2 9 2 ) ( 1 6 , 4 0 9 )
S u b - t o t a l ..................................... 149,154 184,927 175,225
Retention money for projects
W i t h i n6m o n t h s ................................ –– 1,823
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 1 0 3 2 2 –
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. – 40 872
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. – 119 22
M o r et h a n2 4m o n t h sb u tw i t h i n3 6m o n t h s .............. –– 119
M o r et h a n3 6m o n t h sb u tw i t h i n4 8m o n t h s .............. –– 570
M o r et h a n4 8m o n t h s ............................. –––
B a l a n c e ..................................... 1 0 3 1 8 0 3 , 4 0 4
L e s s :l o s sa l l o w a n c e ............................. ( 4 1 ) ( 7 2 ) ( 1 , 3 6 2 )
S u b - t o t a l ..................................... 6 2 1 0 8 2 , 0 4 2
Total trade and bills receivables of Digitalisation Solution
Services (net of loss allowance) ................... 149,216 185,035 177,267
FINANCIAL INFORMATION
– 362 –


--- page 372 ---
As at 31 December
2 0 2 12 0 2 22 0 2 3
RMB ’000 RMB ’000 RMB ’000
Overall
W i t h i n6m o n t h s ................................ 1 8 8 , 7 2 2 1 9 9 , 2 0 5 1 2 0 , 6 6 8
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s............... 2 2 , 1 1 7 3 7 , 2 3 9 8 8 , 1 3 5
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s .............. 1 1 , 1 0 3 1 9 , 1 6 8 3 9 , 9 7 8
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s .............. 2 , 3 7 1 1 3 , 4 1 5 1 3 , 5 7 0
M o r et h a n2 4m o n t h s ............................. 5 , 4 4 8 4 , 3 1 9 1 3 , 2 6 2
229,761 273,346 275,613
L e s s :l o s sa l l o w a n c e ............................. ( 4 , 8 1 8 ) ( 1 3 , 1 9 2 ) ( 2 5 , 6 1 8 )
Total ....................................... 224,943 260,154 249,995
The Group ’s trade and bills receivables were assessed for ECLs which was estimated
using a provision matrix based on the Group ’s historical credit loss experience, adjusted for
factors that are specific to its debtors and an assessment of both the current and forecast
general economic conditions at the end of each of the Track Record Period. The loss allowance
for trade and bills receivables were approxima tely RMB4.8 million and RMB13.2 million as at 31
December 2021 and 2022, respectively. The increase in the loss allowance as at 31 December
2021 and 2022 was generally in line with t he increase in the balance of the Group ’st r a d ea n d
bills receivables. The Group ’s loss allowance for trade and bills receivables increased from
approximately RMB13.2 million as at 31 Decembe r 2022 to approximately RMB25.6 million as at
31 December 2023, which was mainly attributed to the increase in loss allowance of five
Integrated Solution Services projects.
The outstanding trade receivables that are aged more than 12 months was mainly
attributed to five Integrated So lution Services projects involv ing Customer A and Customer B,
both of which experienced payment delays by the end users (including regulatory authorities
and public institution) who faced temporary liquidity constraints due to the impact of the COVID-
19 pandemic. In response, the Group and the respective customers collaboratively negotiated
extended payment terms that accounts for the pr evailing circumstances, and consequently,
payment term extensions have arisen in relation to these five projects.
As at the Latest Practicable Date, approxi mately RMB158.4 milli on, RMB174.7 million and
RMB76.6 million, representing a pproximately 68.9%, 64.0%, an d 27.8% of the balance of trade
and bill receivables as at 31 December 2021, 2022 and 2023, respectively, had been
subsequently settled. The Directors are of the view that there is no significant concern
regarding the recoverability of the Group ’s trade and bill receivables despite the relatively low
percentage of subsequent settlement for its trade and bill receivables as at 31 December 2023.
T o the best knowledge and belief of the Directors, it is mainly due to the settlement practices of
the customers, who tend to settle a significant portion of their trade debts during the period
falling one to two months before the Chinese New Ye ar, which coincides with the year-end of the
Group. As a result, the proportion of trade and bill receivables that are settled during the period
subsequent to the Group ’s year-end is relatively low.
FINANCIAL INFORMATION
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--- page 373 ---
Trade receivables turnover days
The following table sets out the Group ’s trade receivables turnover days during Track
Record Period:
Year ended 31 December
2021 2022 2023
T r a d er e c e i v a b l e st u r n o v e rd a y s( d a y s ) .............. 1 3 9 . 3 2 2 2 . 3 1 6 4 . 4
Note: Average balance of trade receivables multiplied by number of days in that year divided by total revenue.
The Group ’s trade receivables turnover days increased from approximately 139.3 days for
the year ended 31 December 2021 to approximately 222.3 days for the year ended 31
December 2022. Such increase was mainly due to the decrease in revenue as a result of (i) the
prioritisation of Software Solution Services ove r Integrated Solution Services projects in 2022;
and (ii) the decrease in work orders placed by the customer for a sizable provincial transmission
pipeline engineering construction project. The Group ’s trade receivables turnover days slightly
decreased from approximately 222.3 days for the year ended 31 December 2022 to
approximately 164.4 days for the year ended 31 December 2023. Such decrease was mainly
attributed to the positive effect arising from the implementation of internal control to improve the
Group ’s cash inflow from operating activities and trade receivable turnover days.
Turnover days for trade and bills receivables and contract assets
The following table sets out the Group ’s turnover days for trade and bills receivables and
contract assets during the Track Record Period:
Year ended 31 December
2021 2022 2023
Turnover days for trade and bills receivables and
c o n t r a c ta s s e t s( d a y s ) ....................... 5 0 3 . 6 6 8 9 . 6 5 4 5 . 3
Note: Average balance of trade receivables, bills receivables and contract assets multiplied by number of days in that
year divided by total revenue.
FINANCIAL INFORMATION
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During the Track Record Period, the Group experienced a prolonged turnover days for
trade and bills receivables and contract assets primarily due to (i) the lengthy inspection and
acceptance and settlement audit processes of its customers for Infrastructure Construction
Services business sub-segment; and (ii) extension of payment terms in relation to five Integrated
Solution Services projects. The Group recognised revenue and corresponding contract assets
for Infrastructure Construction Services projects based on the work progress. However, the
Group was entitled to (i) receive progress payment and issue interim VAT invoice only after the
completion of inspection and acceptance procedures carried out by its customers and/or their
agents and (ii) receive final payment (less retention money (if any)) and issue final VAT invoice
only after completion of settlement audit procedures, which were typically arranged by its
customers in stages. Such processes generally also take a considerable amount of time after
the recognition of revenue and relevant contract assets. Consequently, the Group maintained a
substantial balance of contract assets, which would be transferred to trade receivables only after
the completion of the inspection and acceptance and/or settlement audit procedures. For details
relating to the operation fl ow in respect of the Group ’s Infrastructure Construction Services
projects, please refer to the paragraph headed ’’Business – Operation flow ’’in this prospectus.
Following the completion of inspection and acceptance and settlement audit procedures,
t h eG r o u pw o u l db ee n t i t l e dt or e c e i v ep r o g r e s spayment and final payment, respectively, from
customers with a credit period of up to 90 days. This resulted in a significant balance of trade
receivables and contra ct assets on the Group ’s balance sheet, contributing to the extended
turnover period for trade and bills receivables and contract assets. According to the Ipsos
R e p o r t ,i ti sa ni n d u s t r yn o r mt h a tc u s t o m e r sf o rthe Infrastructure Constr uction Services tend to
settle payments after a relatively substantial period of time subsequent to inspection and
acceptance and settlement audit processes, and issuance of VAT invoices, mainly due to (i)
customers place a strong emphasis on ensuring quality of construction deliverables. As a result,
the inspection period tends to be relatively lengthy before the acceptance procedure; (ii) in
cases where multiple constructi on companies are involved in the s ame project, customers often
choose to wait until all aspects of the work are completed before initiating the inspection,
acceptance, settlement audit processes, and issuing VAT invoices simultaneously; (iii)
customers who are state-owned enterprises typically undergo extensive internal approval
processes. Such processes must be completed before they can proceed with settlement audits
or approve the final accounts; and (iv) customer would typically retain a portion of the project
payment as retention money to ensure the availability of warranty services provided by
telecommunications infrastructure services providers.
FINANCIAL INFORMATION
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Further, according to the Ipsos Report, it is an industry norm that customers in digitalisation
solution services tend to settle payments in stage s after a relatively substantial period of time
subsequent to delivery and acceptance of work. In the context of a typical digital surveillance
project, customers adhere to a specific staggered payment schedule. Customers generally make
progress payments during the implementation stage and upon the inspection and acceptance of
works. Final payment and retention money will then be paid over a period of approximately four
years following inspection and acceptance. This payment schedule serves to ensure solution
provider offers thorough and effective follow-up services during the after-sales period within the
post-completion stage of the project. On the other hand, for some of the Group ’s large-scale
Digitalisation Solution Services projects, the Group may only receive payment after the end
users have made the corresponding payment to the Group ’s customers, and the Group had
extended the payment terms in relation to the five Integrated Solution Services projects in view
of the temporary liquidity constraints faced by the end users, which include regulatory authorities
and public institution, due to the adverse effects of the COVID-19 pandemic. As a proactive
measure, the Group and the respective customers collaboratively negotiated extended payment
terms that takes into consideratio n the prevailing circumstances.
The Group ’s turnover days for t rade and bills receivables and c ontract assets increased
significantly from approximately 503.6 days for the year ended 31 December 2021 to
approximately 689.6 days for the year ended 31 December 2022. This increase was primarily
attributed to two factors. Firstly, the Group ’s revenue decreased due to its prioritisation of
Software Solution Services projects over Integrated Solution Services projects in 2022.
Secondly, the balance of trade receivables and contract assets increa sed mainly due to the
delayed settlement of trade receivables by the Group ’s customers as a result of COVID-19
pandemic during the year. The Group ’s turnover days for trade and bills receivables and contract
assets decreased from approximately 689.6 days for the year ended 31 December 2022 to
approximately 545.4 days for the year ended 31 December 2023. This decrease was mainly due
to (i) the collection of trade debts in relation t o Digitalisation Solution Services projects
amounted to RMB63.4 million, resulting in a decrease in trade receivables; and (ii) the growth of
the Group ’s business, leading to relatively higher revenue for the year ended 31 December
2023.
The Group ’s turnover days for trade and bills receivables and contract assets are relatively
higher compared to its industry peers, the majority of whom are listed on the Shenzhen Stock
Exchange or the Shanghai Stock Exchange. This can be attributed to the Group ’s higher level of
contract assets, which arises from the disparity in revenue recognition timing for Infrastructure
Construction Services between the Group and its industry peers. While the Group recognises
revenue and corresponding contract assets for Infrastructure Construction Services based on
the proportion of actual costs incurred relative to the estimated total cost, industry peers
typically rely on the customers ’ inspection reports or settlem ent audit reports to measure
progress. However, it is the industry practice to take a lengthy process to obtain from the
customers and as a result these reports normally do not accurately reflect the actual
performance progress of the construction projects for the respective financial periods. The
Group ’s revenue recognition is not dependent on when these reports are received from its
customers, and therefore any potential delay in obtaining the inspection reports or settlement
audit reports from customers would not affect the accuracy in measuring the Group ’s
performance progress. Due to the lengthy inspection process, the conversion of contract assets
into trade receivables takes place over a longer timeframe for the Group.
FINANCIAL INFORMATION
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--- page 376 ---
The Directors have determined that recognising revenue for its Infrastructure Construction
Services based on the proportion of actual costs incurred relative to the estimated total cost is a
more practical method for the Group in preparing its financial information. The reasons are set
out as follows:
( a ) a ss t a t e di nH K F R S1 5 . B 1 7 ,i nc a s e sw h e r et h eo u t p u t su s e dt om e a s u r ep r o g r e s s
may not be directly observable and the information required to apply them may not be
available to an entity without undue cost, an input method may be necessary;
(b) the costs incurred directly contributes to the Group ’s progress towards satisfying the
performance obligation (i.e. labour procurement costs incurred directly leads to
progress towards completion of the construction);
(c) the cost incurred is proportional to the entity ’s progress towards satisfying the
performance obligation (i.e. labour procurement costs incurred is proportional to the
progress towards completion of the construction); and
(d) independent third-party labour suppliers regularly provide their report confirming the
amount of labour services provided (being the most significant cost procured).
In view of the above factors, and with reference to the relevant discussions in HKFRS 15,
the Directors consider that the revenue recognition method it adopted is a reasonable proxy for
measuring progress, which provides a faithful depiction of the transfer of goods or services in
satisfying its performance obligation.
The Group has assessed the recoverability of the relevant outstanding contract assets and
trade receivables, and has maintained frequent communications with relevant customers to
ensure effective credit control. The Directors believe that the risk of not being able to recover
the relevant contract assets and trade receivables is relatively low primarily due to (i) the
Group ’s major customers for both T elecommunications Infrastructure Services and Digitalisation
Solution Services business segments consist of the Big Three and the world ’sl a r g e s t
telecommunications tower infrastructure ser vice provider, all of which are state-owned
enterprises; (ii) there has been no occurrence of bad debt associated with major customers,
including the Big Three and the world ’s largest telecommunications t ower infrastructure service
provider, historically throug hout the Track Record Period; ( iii) the Group has evaluated the
creditworthiness of the customers, including (a) conducting customers ’ background information
review to gain insights into their business operations, history, and reputation, (b) examining the
annual reports of customers that are listed company to assess their financial strength, including
factors such as profitability, liquidity, and overall financial performance, and (c) reviewing credit
ratings of the customers ’ bond, if applicable, to gauge their creditworthiness as determined by
reputable credit rating agencies. No material collection issues that could potentially impact the
collection of trade debt by the Group were identified with these customers; (iv) the Group has
taken follow-up actions as appropriate, including making phone calls, visiting customers ’ work
sites and initiating legal proceedings or actions where necessary; (v) the Group has
implemented a rewards and penalties management system for trade debt collection in order to
motivate and incentivise responsible business operations personnel to effectively recover
outstanding trade debts within set timelines; and (vi) the Group has enhanced risk control
measures to identify fraudulent behaviors am ong customers, including (a) forecasting
customers ’ business performance and estimates relevant payment collection based on the
FINANCIAL INFORMATION
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--- page 377 ---
Group ’s past experience, and (b) monitoring of customers ’ business stability, business change,
credit rating, working capital sufficiency and wi llingness to repay, to adopt different risk control
measures. In view of the above, the Directors be lieve there is no recoverability issue for the
Group ’s trade receivables and contract assets.
The Group recognises loss allowances for trade receivables and contract assets based on
an estimate of lifetime ECLs. These ECLs are determined using a provision matrix that
incorporates the Group ’s historical credit loss experience, including historical settlement
patterns, past due status and analysis of the historical migration rate. The historical average
migration rate reflects the historical pattern of changes in the credit quality of the Group ’st r a d e
receivables and contract assets over time and provides an indication of the likelihood of
transitions between credit quality categories. The historical average migration rate of trade
receivables and contract assets is an indicator o f the risk associated with collection cycles and
overdue periods. Indeed, the Group experienced a relatively extended aging of trade receivables
and contract assets. However, the Group ’s major customers for both T elecommunications
Infrastructure Services and Digitalisation Solut ion Services business segments consist of the Big
Three telecommunications network operators in the PRC and the world ’sl a r g e s t
telecommunications tower infrastructure ser vice provider, all of which are state-owned
enterprises with strong financial strength and high c reditability. This signif icant factor, along with
their industry prominence and market position of the Group, has indeed played a crucial role in
ensuring a satisfactory settlement record of the Group ’s trade debts with these major customers
throughout the Track Record Period. Moreover, during the Track Record Period, trade
receivables are generally settled within two years of being overdue, unless an extension
agreement was established with customers. The Group prudently maintained a 100% loss
allowance for trade receivables that remained overdue for more than two years, unless an
extension agreement was in effect. In light of these meticulous considerations, the Directors are
of the view that the loss allowance for ECLs on trade receivables and contract assets is
sufficient as at the respective period ends of the Track Record Period.
With respect to the high level of turnover days for trade and bills receivables and contract
assets, the Group has the following measures in place for the purposes of reducing their
potential adverse impact and enhancing the effectiveness of its credit policy, in order to improve
its cash inflow from operating activities and turnover days for trade and bills receivables and
contract assets:
(i) engage in negotiation with labour suppliers and hardware and software suppliers to
secure more favourable paym ent terms, including (a) e xplore the possibility of
reducing the percentage of advanced payment required; and (b) extend the credit
period to a longer credit term;
(ii) periodic review of collection status of t rade receivables, in cluding (a) the Group ’s
finance personnel sends the monthly statement with account balances to customers
and the responsible business operations personnel or project manager for their
attention to follow up with customers, and (b) the Directors review the trade
receivables ageing report highlighting the outstanding receivables monthly;
FINANCIAL INFORMATION
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--- page 378 ---
(iii) once the trade receivables become overdue, the responsible business operations
personnel or project manager would contact the relevant customers by phone calls or
issue demand letters to follow up on the repa yment status and report to the Directors
on the recoverability of the trade receivables after such follow up;
(iv) the Directors conduct monthly analysis of the overdue trade receivables balances and
determine whether a loss allowance for ECLs on trade receivables is required, taking
into consideration (a) the Group ’s historical credit loss experience, adjusted for factors
that are specific to the debtors (including aging, internal credit ratings of debtors,
repayment history and/or past due status), and (b) an assessment of both the current
and forecast general economic conditions;
(v) in the event where the trade receivables overdue balances remain unsettled, initiating
legal proceedings or actions where necessary; and
(vi) the Directors periodically review the Group ’s credit policy taking into account the
collection status of t rade receivables.
On top of the above measures in place, to further strengthen its ability in collecting trade
debts, the Group has implemented a rewards management system in relation to trade debt
collection among its employees in July 2023 in order to motivate and incentivise the responsible
business operations personnel or project managers, to proactively recover outstanding trade
debts with the relevant customers within set timelines.
Other receivables, deferred VAT refund and prepayment
The Group ’s other receivables, deferred VAT refund and prepayment comprised (i) other
receivables, (ii) deferred VAT refund, and (iii) prepayment for labour, equipment and services.
The following table sets out a summary of the Group ’s other deposits, prepayments and
receivables as at the dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
O t h e rr e c e i v a b l e s ,n e to fl o s sa l l o w a n c e............. 2 3 , 4 4 0 1 2 , 4 1 0 7 , 2 2 7
D e f e r r e dV A Tr e f u n d .......................... 6 , 2 4 6 5 , 3 6 9 5 , 2 9 9
P r e p a y m e n tf o rl a b o u r ,e q u i p m e n ta n ds e r v i c e s ......... 5 , 5 8 3 3 0 , 9 9 5 6 , 8 2 8
Total .................................... 35,269 48,774 19,354
The Group ’s other receivables mainly represented tender bonds and performance bonds
which will be released to the Group upon the award and the completion of the relevant projects,
as the case may be. As at the Latest Practica ble Date, approximately RMB1.0 million,
representing approximately 14.0% of the Group ’s other receivables (net of loss allowance) as at
31 December 2023 had been subsequently settled.
FINANCIAL INFORMATION
– 369 –


--- page 379 ---
The Group ’s deferred VAT refund arises when the input VAT exceeds the output VAT . The
deferred VAT refund can be used to offset future VAT output tax liabilities, subject to compliance
with relevant PRC tax laws and regulations. The Group ’s deferred VAT refund decreased from
approximately RMB6.2 million as at 31 Decembe r 2021 to approximately RMB5.4 million as at
31 December 2022, the decrease was mainly due to the fact that part of the deferred VAT refund
was used to offset VAT output tax liabilities i n accordance with relevant PRC tax laws and
regulations. The Group ’s deferred VAT refund remained stable at approximately RMB5.3 million
as at 31 December 2023. As at the Latest Practicable Date, the Group ’s deferred VAT refund
was approximately RMB4.4 million.
During the Track Record Period, the Group ’s prepayment for labour, equipment and
services primarily consists of advanced payme nts made to labour suppliers for its services
related to its T elecommunications Construction Services projects and project funds for research
and development projects. Typically, the Group is obligated to provide an advanced payment of
approximately 50% of the contract value to its labour suppliers within 15 days of work
commencement, as per the terms of the work order. In practice, the Group settles this amount
after receiving payments from its customers. The Group ’s prepayment for labour, equipment and
services further increased by approximately 455.2% to approximately RMB31.0 million as at 31
December 2022, the increase was mainly contributed by a prepayment of project funds made by
the Group to its research and development partner for ‘‘Photonic Fusion T echnology and
Photonics Chips Research for 5G/6G Communication Perception ’’ project amounted to
approximately RMB25.1 million. The project funds would be used for procurement,
customisation and commissioning of equipment, purchase of raw material, establishment of
research and development team and establishment of application scenario with the research
and development partner. Following a change in the project plan initiated by the Nanchang
Science and T echnology Bureau, the Group received the return of the project fund by the end of
2023. As a result, there was a significant decrease in the balance of prepayment for labor,
equipment and services, reducing it to approximately RMB6.8 million as at 31 December 2023.
As at the Latest Practicable Date, appr oximately RMB0.3 million, representing
approximately 4.6% of the Group ’s prepayment for labour, equipment and services as at 31
December 2023 had been subsequently utilised.
Investments in associates
The Group recognised investments in associates under equity method of approximately
RMB7.4 million as at 31 December 2023, included (i) an investment in QYP Info T ech amounted
to approximately RMB2.5 million, of which the Group held equity interest of 49% and 51% of
equity interest was indirectly held by a government institution as at the Latest Practicable Date;
and (ii) an investment in WPX Info T ech amounte d to approximately RMB4.9 million, of which
the Group held equity interest of 49% and 51% of equity interest was also indirectly held by a
government institution as at the Latest Practicable Date.
As at the Latest Practicable Date, WPX Info T ech has started business but QYP Info T ech
was yet to commence business activities.
FINANCIAL INFORMATION
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--- page 380 ---
Amounts due from related parties
The following table sets out the Group ’s amounts due from related parties as at the dates
indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
M s .T a oH a i l a n .............................. 7 2 2 8 2 8
M r .X i a oW e i............................... 4 6 ––
M r .Z h a n gJ i m a o ............................. 4 5 ––
M s .C h a iW e n x i n ............................ 3 ––
Y o uP oB V I ................................ – 6,067 –
Y i n gH u aB V I ............................... – 3,691 –
S h uZ h iC a y m a n ............................. – 1,895 –
R u iD aB V I................................ – 812 –
G T&Y a n g t z e .............................. – 68 68
Octuple Hills . .............................. – 67
H u a tH u a t ................................. – 66
M s .Y e u n g ................................. – 1 –
Total .................................... 166 12,574 109
The amount due from the Shareholders as at 31 December 2023 represents the paid-in
capital to be received from them for the Shares issued as part of the Reorganisation. The
amounts due from Ms. Xiao Haiyan, Mr. Xiao Wei, Ms. T ao Hailan, Mr. Zhang Jimao and Ms.
Chai Wenxin represent mainly the advance payment of expenses including entertainment
expenses, travel expenses and motor vehicle expenses. The decrease in the balance in 2023
was mainly due to settlement of the paid-in capital by You Po BVI, Ying Hua BVI, Shu Zhi
Cayman and Rui Da BVI.
The amount due from related parties is non-trade in nature, unsecured, interest-free and
have no fixed repayment terms. The balance will be fully settled before th e Listing. For further
details, please refer to note 29(d) of the Accountants ’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 381 ---
Trade and other payables
The following table sets out the Group ’s trade and other payables as at the dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Trade payables – t h i r dp a r t i e s .................... 3 8 5 , 9 9 6 3 6 2 , 8 3 6 4 3 8 , 0 5 3
O t h e rt a xp a y a b l e s........................... 4 8 , 1 8 7 5 4 , 1 2 8 7 6 , 1 8 6
A c c r u e dp a y r o l l ............................. 4 , 8 6 5 3 , 4 9 7 4 , 0 4 9
O t h e rp a y a b l e sa n da c c r u a l s ..................... 3 , 3 1 6 4 , 9 4 7 7 , 0 1 4
A m o u n t sd u et os h a r e h o l d e r s .................... 1 , 1 7 6 1 2 , 1 4 3 1 4 4 , 8 6 1
A m o u n t sd u et oa s s o c i a t e s ...................... –– 7,350
Total .................................... 443,540 437,551 677,514
Trade payables
The Group ’s trade payables comprised mainly the payables to the Group ’s labour suppliers
for their provision of labour. Pursuant to the relevant contracts, the Group typically provides its
labour suppliers with an advance payment of approximately 50% of the contract value as
stipulated in the work order within 15 days after the commencement of works. Upon completion
and acceptance of the works by the Group ’s customers at settlement audit, the Group ’s
customers make final payment to the Group accordingly, and the Group then settles the trade
debts with the labour suppliers. Upon expiry of defect liability period, the Group ’s customers
releases the retention money to the Group, and the Group then pays the labour suppliers. The
labour suppliers typically grant the Group a credit period ranging from 30 to 45 days after the
receipt of payment by the Group from its customers. The Group ’s trade payable are generally
affected by, including but not limited to, the amounts of works performed by its labour suppliers,
timing of payment for the invoices received from its suppliers, timing of settlement made by its
customers and credit periods granted by them.
The Group ’s trade payables decrea sed from approximately RMB386.0 million as at 31
December 2021 to approximately RMB362.8 million as at 31 December 2022. The decrease in
the Group ’s trade payables as at 31 December 2022 was primarily attributable to the Group ’s
prioritisation of Software Solution Services proj ects over Integrated Solution Services projects in
2022, taking into account the customers ’ demand and the limited resources available during that
period. This interim measure allowed the Group to avoid substantial capital requirements for the
purchases of hardware associated with Integrated Solution Services projects, resulting in a
decrease in the balance of trade payables. The Group ’s trade payables slightly increased from
RMB362.8 million as at 31 December 2022 to a pproximately RMB438.1 million as at 31
December 2023. The increase was generally in line with the growth of the Group ’s business.
FINANCIAL INFORMATION
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--- page 382 ---
The following table sets out the ageing analysis of the Group ’s trade payables as at the
dates indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r ............................... 3 4 9 , 0 5 6 2 6 5 , 2 7 7 3 2 7 , 6 9 1
M o r et h a n1y e a rb u tw i t h i n2y e a r s ................ 2 8 , 2 2 8 7 5 , 2 1 9 6 8 , 2 1 5
M o r et h a n2y e a r sb u tw i t h i n3y e a r s............... 1 , 9 0 5 1 3 , 6 4 2 2 0 , 9 3 8
M o r et h a n3y e a r s ........................... 6 , 8 0 7 8 , 6 9 8 2 1 , 2 0 9
Total .................................... 385,996 362,836 438,053
The outstanding trade payables that are aged more than 12 months were mainly due to the
delayed settlement of customers ’ accounts, which in turn delayed the Group ’s settlement of
trade debts with the labour suppliers.
As at the Latest Practicable Date, approximately RMB194.6 million, representing
approximately 44.5% of the Group ’s trade payables as at 31 December 2023 had been
subsequently settled.
Creditors ’ turnover days
The following table sets out the Group ’s creditors ’ turnover days during the Track Record
Period:
As at 31 December
2021 2022 2023
Creditors ’ t u r n o v e rd a y s( d a y s ) ................... 3 2 1 . 7 4 4 1 . 6 3 1 7 . 8
Note: Average balance of trade payables multiplied by number of days in that year and divided by total cost of sales.
FINANCIAL INFORMATION
– 373 –


--- page 383 ---
During the Track Record Period, the Group experienced a prolonged creditors ’ turnover
days. This was mainly due to the credit terms extended by suppliers, which allowed for a
payment window of 30 to 45 days from the date of the Group ’s receipt of payment from its
customers. In addition, the Group ’s customers had a prolonged inspection and acceptance and
settlement audit process and they will settle the Group ’s trade debt in stages after completion of
inspection and acceptance and settlement audit processes, which resulted in delayed settlement
of the Group ’s trade debts. The prolonged turnover of trade payables was therefore a direct
result of the Group ’s extended trade receivable turnover days. The turnover days increased
significantly from approximately 321.7 days for the year ended 31 December 2021 to
approximately 441.6 days for the year ended 31 December 2022. This increase was primarily
due to prolonged settlement of trade debts by the Group ’s customers, which in turn delayed the
settlement of its trade payables. The Group ’s turnover days for trade payables decreased from
approximately 441.6 days for the year ended 31 December 2022 to approximately 317.8 days
for the year ended 31 December 2023. This decrease was mainly due to (i) the significant effort
by the Group to collect trade debts, which in turn a ccelerated the settlement of its trade payable;
a n d( i i )t h eg r o w t ho ft h eG r o u p’s business, leading to relatively higher cost of sales for the year
ended 31 December 2023. Please refer to the paragraph headed ‘‘Trade and other payables ’’in
this section for details.
The Group consistently recorded longer turnover days for trade and bills receivables and
contract assets compared to creditors ’ turnover days throughout the Track Record Period. This
is mainly due to the fact that (i) the Group experienced an extended ageing of trade receivables
in the Digitalisation Solution Services b usiness segment. This was mainly due to (a)
Digitalisation Solution Services projects generally involve a payment schedule with a lengthy
duration, and (b) the Group ’s decision to extend payment terms to its customers in relation to
the five Integrated solution services projects, considering the temporary liquidity constraints
faced by end users, including regulatory authorities and public institution, as a result of the
impact of COVID-19; (ii) the Group ’s prioritisation of Software Solution Services projects over
Integrated Solution Services projects. The costs associated with these projects consisted mainly
of research and development costs for self-developed software used in the projects. As a result,
the corresponding payables associated with in-house research and development team and third-
party programmers assisting in the research and development process were settled previously,
in the relevant years, resulting in a lower balance of t rade payables; and (iii) the Group typically
had to prepay upfront costs to suppliers for its projects, which were not classified as trade
payables.
Other tax payables
The Group ’s other tax payables primarily comprised VAT payables. As at 31 December
2021, the balance of other tax payables was approximately RMB48.2 million, which increased to
approximately RMB54.1 million as at 31 December 2022, and further increased to approximately
RMB76.2 million as at 31 December 2023. The increase in other tax payables was mainly driven
by the increase in revenue from which the relevant VAT tax liability arises after it is recognised
in the accounting records, in accordance with PRC accounting standards and tax regulations.
This increase was generally in lin e with the increase in the Group ’s contract assets.
FINANCIAL INFORMATION
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--- page 384 ---
Other payables and accruals
The Group ’s other payables and accruals mainly represented (i) retention money and
performance bonds which will be released to the Group ’s labour suppliers upon completion of
the relevant projects; and (ii) work safety fees received by the Group which will be refunded to
its customers upon completi on of the relevant projects.
Accrued payroll
The Group ’s accrued payroll mainly comprised the salaries to be paid to its staffs.
Amount due to shareholders
For details, please refer to ‘‘Indebtedness ’’of this section.
Amount due to associates
For details, please refer to ‘‘Indebtedness ’’of this section.
INDEBTEDNESS
The following table sets out a summary of the Group ’s indebtedness as at the dates
indicated:
As at 31 December
As at
30 April
2021 2022 2023 2024
RMB ’000 RMB ’000 RMB ’000 RMB ’000
(unaudited)
Current
Bank borrowings
– secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311,449 325,172 297,384 289,000
– u n s e c u r e d .............................. – 50,026 50,074 50,000
L e a s el i a b i l i t i e s............................ 1 1 1 4 5 1 4 5 1 4 2
Amounts due to shareholders . . . . . . . . . . . . . . . . . . . 1,176 12,143 144,861 8,024
A m o u n t sd u et oa s s o c i a t e s .................... –– 7,350 7,350
312,736 387,386 499,814 354,516
Non-current
L e a s el i a b i l i t i e s............................ – 13 129 68
Total ................................... 312,736 387,399 499,943 354,584
FINANCIAL INFORMATION
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Bank borrowings
The Group ’s bank borrowings were primarily used to finance its working capital
requirements during the Track Record Period, the bank borrowings increased in line with the
growth of the Group ’s businesses during the Track Record Period and up to 30 April 2024. The
bank borrowings were secured by the Group ’s (i) trade receivables and contract assets, (ii)
pledge bank deposits, (iii) property, plant and equipment and (iv) in vestment property.
Additionally, Mr. Liu Haoqiong and Ms. T ao Xiulan, each a Controlling Shareholder, had
provided personal guarantees and had pledged their personal property as security for the
Group ’s bank borrowings, all of which have been released. Further, the Group ’s bank borrowings
during the Track Record Period were also secured by (i) personal guarantees of Mr. Zhou
Zhiqiang, one of the Group ’s executive Directors and his spouse, which has been released; (ii)
personal guarantees of Mr. Xiao Wei, an employee of the Group and a former shareholder and
his spouse, which will be released prior to the Listing; and (iii) personal guarantee of Ms. T ao
Hailan, sister of Ms. T ao Xiulan which will be released prior to the Listing. The effective interest
rates on the Group ’s bank borrowings as at 31 December 2021, 2022 and 2023 ranged from
4.00% to 5.22% per annum, 4.20% to 5.24% per annum and 3.95% to 5.24% per annum,
respectively. As at 30 April 2024, the Group had unutilised banking facilities of approximately
RMB357.7 million.
As confirmed by the Directors, the Group ’s bank borrowings were entered into on normal
commercial terms and do not contain any restrictive covenants that are not commonly found in
banking facilities of such kind. The Directors further confirm that the Group settled all its debt
obligations in a timely manner, had not experienced any difficulties in obtaining loans or
refinancing its debts.
In addition, the Directors confirmed that there were breaches of covenants during the Track
Record Period. As at 31 December 2021, 2022 and 2023, the agreements with respect to the
Group ’s borrowings with one of its principal banks which amounted to approximately RMB155.2
million, RMB155.1 million and RMB127.2 million w ere subject to loan covenants relating to
certain financial ratios based on the borrower ’s balance sheet that are commonly found in
lending arrangements with financial institut ions. For details, please refer to the paragraph
headed ‘‘Working Capital ’’in this section.
Lease liabilities
The Group ’s lease liabilities primarily represente d the liabilities arising from the Group ’s
leased properties. The effective interest rates on the Group ’s lease liabilities as at 31 December
2021, 2022 and 2023 was 4.75% per annum, 4.75% per annum and 4.75% per annum
respectively. For further details, please refer to notes 21 and 27(c) of the Accountants ’ Report in
Appendix I to this prospectus.
FINANCIAL INFORMATION
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Amounts due to shareholders
The following table sets out the Group ’s amounts due to shareholders as at the dates
indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
M r .L i u................................... 1 , 1 5 2 – 71,542
M r .L i uD i n g l i ............................... 2 4 2 4 9 , 8 1 3
M s .T a oX i u l a n .............................. –– 36,645
M r .L i uD i n g y i .............................. –– 13,365
Y o uP oC o m m e n c e(Note) ....................... – 5,899 5,899
Ying Hua Investment (Note) ...................... – 3,589 3,589
Shu Zhi Shen Kong (Note) ....................... – 1,842 1,842
Rui Da Xin T ao (Note) .......................... – 789 789
M s .Y e u n g ................................. –– 1,377
Total .................................... 1,176 12,143 144,861
Note: Mr. Liu and Ms. T ao Xiulan, Mr. Liu Dingyi, Mr. Liu Dingli, You Po Commence, Ying Hua Investment, Shu Zhi Shen
Kong, and Rui Da Xin T ao are the respective shareholders of GT & Yangtze, Octuple Hills, Huat Huat, You Po
BVI, Ying Hua BVI, Shu Zhi Cayman, and Rui Da BVI. Prior to the Reorganisation, they directly held the equity
interest in Zhonggan Communication.
The amount due to Mr. Liu, Ms. T ao Xiulan, Mr. Liu Dingyi, Mr. Liu Dingli and the
shareholders of You Po Commence, Ying Hua Investment, Shu Zhi Shen Kong and Rui Da Xin
T ao as at 31 December 2023 represents the consideration to be paid by Jiangxi Zhongge for the
acquisition of equity interest in Zhonggan Communication held by each shareholder, as part of
the Reorganisation. The significant increase in the balance in 2023 was mainly due to the
inclusion of the consideration payable by Jiangxi Zhongge for the acquisition of approximately
90.1% of Zhonggan Communication ’s equity interest in aggregate from Mr. Liu, Ms. T ao Xiulan,
Mr. Liu Dingyi, Mr. Liu Dingli and Ms. Yeung.
The amount due to shareholders is non-trade in nature, unsecured, interest-free and
repayable on demand. In early 2024, the shareholders of Zhonggan Communication provided
approximately RMB127.7 million as a gift in order to facilitate the transfe r payment from Jiangxi
Zhongge to the relevant shareholders as part of the Reorganisation. As at the Latest Practicable
Date, approximately RMB127.7 million of the am ounts due to shareholders as at 31 December
2023 has been settled upon completion of the transfer payment. The remaining balance will be
fully settled before the Listing.
FINANCIAL INFORMATION
– 377 –


--- page 387 ---
Amount due to associates
The amount due to associates represents the paid-in capital owed by GLP T echnology to
Q Y PI n f oT e c ha m o u n t e dt oa p p r o x i m a t e l yR MB2.5 million and to WPX Info T ech amounted to
RMB4.9 million. GLP T echnology has an obligat ion to settle the capital money with QYP Info
T ech no later than 4 December 2052 and with WPX Info T ech no later than 14 February 2053.
The amount is non-trade in nature, unsecured, and does not bear any interest.
Contingent liabilities
The Group did not have contingent liabilities that would have a material adverse effect on
its financial position, liquidity or result of operation, save as disclosed in the paragraph headed
‘‘Indebtedness ’’ in this section and apart from intragrou p liabilities and normal trade bills, the
Directors confirm that the Group did not have any outstanding mortgages, charges, debentures,
loan capital, bank overdrafts, loans, debt securities or other similar indebtedness issued and
outstanding or agreed to be issued, finance leas es or hire purchase commitments, liabilities
under acceptances or acceptance credits or any guarantees or other material contingent
liabilities outstanding as at 30 April 2024, being the Latest Practicable Date for the purpose of
the statement of indebtedness.
STATEMENT OF INDEBTEDNESS
Save as disclosed above, as at 30 April 2024, being the Latest Practicable Date for the
purpose of the indebtedness statement, the Group did not have any loan capital issued and
outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness,
liabilities under acceptances (other than norma l trade bills) or acceptable credits, debentures,
mortgages, charges, finance leases or hire pur chase commitments, guarantees, material
covenants, or other material contingent liabilit ies. The Directors confirmed that there has been
no material change in the Group ’s indebtedness since the Latest Practicable Date up to the date
of this prospectus.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As at the Latest Practicable Date, the Group did not have any material off-balance sheet
commitments and arrangements.
NET ASSETS
The Group ’s net assets experienced an increase from approximately RMB124.5 million as
at 31 December 2021 to approximately RMB187.2 million as at 31 December 2022. This growth
was attributed primarily to the combined effect of the Group ’s profit accumulation and the share
repurchase and capital injection conducted by Zhonggan Communication during the period.
However, there was a significant decrease in the Group ’s net assets of approximately RMB59.0
million, resulting in a total of approximately RMB128.2 million as at 31 December 2023. The
decrease was primarily caused by the modifications made to the Reorganisation plan which
outweighed the profit accumulation during the year.
FINANCIAL INFORMATION
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According to the original Reorganisation plan, specific arrangements were made to
facilitate the transfer of the entire equity inte rest in Zhonggan Communica tion from certain of its
shareholders to Jiangxi Zhongge, taking into account that Jiangxi Zhongge is a newly
established entity with pending paid-up regi stered capital. On 22 August 2022, waiver
agreements were executed between Mr. Liu, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu Dingyi, and
Jiangxi Zhongge, as well as between Ms. Yeung and Jiangxi Zhongge. These agreements
effectively waived Jiangxi Zhongge ’s obligation to make the respective considerations for the
transfer. However, modifications to the Reorganisation required the execution of the December
2023 Agreement between Jiangxi Zhongge and the relevant shareholders, which reinstated
Jiangxi Zhongge ’s responsibility to fulfill the payment ob ligations to relevant shareholders. T o
ensure a smooth settlement of the transfer, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu Dingyi, and
Ms. Yeung collectively provide d funds amounting to approximately RMB61.2 million to Mr. Liu.
The purpose of these funds was to facilitate the pr ovision of approximate ly RMB127.7 million
(referred to as the ‘‘Funds ’’) from Mr. Liu to Jiangxi Zhongge as a gift, exclusively intended for
the payment of the transfer considerations to the shareholders. Subsequently, Jiangxi Zhongge
proceeded to make the transfer payments to the shareholders, amounting to the same total of
approximately RMB127.7 million. Details of the Reorganisation, please refer to the section
headed ‘‘History and Reorganisation ’’of this prospectus.
As a result of the phased execution of the revival of payment obligations and the provision
of Funds by Zhonggan Communication ’s shareholders in different financial years, the Group
experienced a tempo rary reduction of approximately RMB127.7 million in its equity as at 31
December 2023. However, with the subsequent provision of the Funds totaling approximately
RMB127.7 million to Jiangxi Zhongge as a gift in 2024, it is anticipated that the Group ’se q u i t y
will fully recover by the same amount. This increase in equity will be duly reflected in the
Group ’s financial statements upon the receipt of capital contributions from the shareholders of
Zhonggan Communication in 2024.
CAPITAL MANAGEMENT
The Group ’s primary objectives when managing capital are to safeguard the Group ’s ability
to continue as a going concern, so that it can continue to provide returns for Shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure with reference to its debt position. The Group ’s
strategy was to maintain the equity and debt in a balanced position and ensure there are
adequate working capital to serve its debt obligations. In order to maintain or adjust the ratio,
the Company may adjust the amount of dividends paid to Shareholders, issue new Shares,
return capital to Shareholders, raise new debt financing or sell assets to reduce debt.
FINANCIAL INFORMATION
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--- page 389 ---
CAPITAL EXPENDITURE S AND COMMITMENTS
Capital expenditures
During the Track Record Period, the Group incurred capital expenditures of approximately
RMB0.7 million, RMB2.1 million and RMB14.0 millio n, respectively, which primarily related to the
purchase of property, plant and equipment.
The Group plans to incur additional capital e xpenditures of approxi mately RMB19.4 million
in 2024 for purchasing hardware equipment an d ancillary software systems. For details as to
additional capital expenditures to be incurred by the Group, please refer to the section headed
‘‘Future Plans and Use of Proceeds ’’in this prospectus.
Capital commitments
T h ef o l l o w i n gt a b l es e t so u tas u m m a r yo ft h eG r o u p’s capital commitments as at the dates
indicated:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
C o n t r a c t e df o rp r o p e r t y ,p l a n ta n de q u i p m e n t.......... 6 , 9 6 9 4 5 3 –
As at 31 December 2021, the Group ’s capital commitments primarily consisted of the final
installment to be paid for the purchase of certain office units in Nanchang City, which are
intended for GLP T echnology ’so f f i c eu s e .
PROPERTY INTERESTS AND VALUATION
The following table sets out the reconciliati on between the net book v alue of the property
interest of the Group ’s investment property as at 31 December 2023 as stated in ‘‘Appendix I –
Accountants ’ Report ’’ to this prospectus and the market value as at 31 May 2024 as stated in
‘‘Appendix III – Property Valuation Report ’’to this prospectus:
RMB’000
Net book value of the property interest of the Group ’s investment property as
at 31 December 2023 set out in Appendix I to this prospectus . . . . . . . . . . 18,841
Less: Depreciation on the investment property for the five months ended
3 1M a y2 0 2 4( u n a u d i t e d ) ..................................... ( 2 2 0 )
A d d :V a l u a t i o ns u r p l u s( u n a u d i t e d ) ............................... 8 , 2 5 9
Market value of the subject property interest as at 31 May 2024 set out in
A p p e n d i xI I It ot h i sp r o s p e c t u s( u n a u d i t e d )........................ 2 6 , 8 8 0
FINANCIAL INFORMATION
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TRANSACTIONS WITH RELATED PARTIES
During the Track Record Period, the Group had entered into certain related party
transactions, details of which are set out in note 29 of the Accountants ’ Report in Appendix I to
this prospectus. The Directors are of the view that the related party transactions were conducted
at arm ’s length and on normal commercial terms and therefore the results of the Group ’s
operations during the Track Record Period would not be distorted by those transactions.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
As at the Latest Practicable Date, the Directors confirmed that there were no
circumstances that would give rise to a disclosure requirement under Rule 13.12 to Rule 13.19
of the Listing Rules.
KEY FINANCIAL RATIOS
The following table sets out a summary of the Group ’s key financial ratios during the Track
Record Period:
Year ended 31 December
Key financial ratios Formulae 2021 2022 2023
Current ratio (times) . . . . . . Current assets/Current liabilities 1.0 1.1 1.0
Q u i c kr a t i o( t i m e s ) ....... ( C u r r e n ta s s e t s – Inventories)/Current liabilities 1.0 1.1 1.0
Gearing ratio (times) . . . . . . T otal debt (1) /T otal equity 2.5 2.0 2.7
Debt to equity ratio (times) . . (T otal debt (1) – Bank balances and cash)/T otal equity 2.2 1.6 2.1
Interest coverage (times) . . . Profit before tax and finance costs/Finance costs 4.6 3.5 5.2
Return on equity (%) . . . . . . Profit for the year/T otal equity as at the respective
year-end date x 100%
29.0 18.7 53.6
Return on assets (%). . . . . . Profit for the year/T otal assets as at the respective
year-end date x 100%
4.0 3.4 5.9
Note:
(1) Debts are defined to include payables (i) incurred not i n the ordinary course of business; and (ii) are interest-
bearing. The Group ’s total debts include interest-bearing bank borrowings and lease liabilities.
Current ratio and quick ratio
The Group ’s current ratios were approximately 1.0, 1.1 and 1.0 times as at 31 December
2021, 2022 and 2023 while the quick ratios as at the same period end were approximately 1.0,
1.1 and 1.0 times, respectively. The Group ’s current ratio and quick ratio remained stable during
the Track Record Period.
FINANCIAL INFORMATION
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Gearing ratio
The Group ’s gearing ratio decreased from approximately 2.5 times as at 31 December 2021
to approximately 2.0 times as at 31 December 2022. The decrease was primarily due to an
increase in the Group ’s equity as a result of accumulation of profit and an injection of capital.
The Group ’s gearing ratio experienced an increase from approximately 2.0 times as at 31
December 2022 to approximately 2.7 times as at 31 December 2023. The increase was primarily
driven by a temporary decline in the Group ’s equity resulting from the revival of the obligation for
Jiangxi Zhongge to pay the consideration for acquiring the equity interests of Zhonggan
Communication under the Reorganisation. It is important to highlight that the temporary decline
in equity is expected to be reversed following the transfer and waiver of loans by Zhonggan
Communication ’s shareholders to Jiangxi Zhongge. The arrangement will help restore the
Group ’s equity position by increase o f approximately RMB127.7 milli on, resulting in a decrease
in gearing ratio. For details of the Reorganisation, please refer to the section headed ‘‘History
and Reorganisation ’’ in this prospectus. However, it is worth noting that the impact of the
temporary decline in equity was partially mitigated by the accumulation of profit during the year.
Debt to equity ratio
The Group ’s debt to equity ratio decreased from approximately 2.2 times as at 31
December 2021 to approximately 1.6 times as at 31 December 2022 The decrease was primarily
due to an increase in the Group ’s equity resulting from accumulation of profit and an injection of
capital. The Group ’s debt to equity ratio increased from approximately 1.6 times as at 31
December 2022 to approximately 2.1 times as at 31 December 2023. The increase was primarily
driven by a temporary decline in the Group ’s equity resulting from the revival of the obligation for
Jiangxi Zhongge to pay the consideration for acquiring the equity interests of Zhonggan
Communication under the Reorganisation. It is important to highlight that the temporary decline
in equity is expected to be reversed following the transfer and waiver of loans by Zhonggan
Communication ’s shareholders to Jiangxi Zhongge. The arrangement will help restore the
Group ’s equity position by increase o f approximately RMB127.7 milli on, resulting in a decrease
in debt to equity ratio. For details of the Reorganisation, please refer to the section headed
‘‘History and Reorganisation ’’in this prospectus.
Interest coverage
The Group ’s interest coverage ratio decreased from approximately 4.6 times for the year
ended 31 December 2021 to approximately 3.5 times for the year ended 31 December 2022.
The decrease was primarily due to an increase in the Group ’s finance costs, resulting from a
rise in the average balance of the Group ’s bank borrowings in 2022. The Group ’s interest
coverage increased from approximately 3.5 times for the year ended 31 December 2022 to
approximately 5.2 times for the year ended 31 December 2023. The increase can be primarily
attributed to the enhanced p rofitability of the Group ’s business in 2023, combined with stable
finance costs incurred during the year. The improved profitability allowed the Group to generate
higher earnings, enabling them to cover its finance costs more comfortably.
FINANCIAL INFORMATION
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Return on equity
The Group ’s return on equity decreased from approximately 29.0% for the year ended 31
December 2021 to approximately 18.7% for the year ended 31 December 2022. The decrease
was primarily contributed by the combined effects of a decrease in the Group ’s net profit in 2022
mainly due to increase in credit impairment losses and listing expenses and an increase in the
Group ’s equity as a result of accumulation of profit and an injection of capital. The Group ’s
return on equity increased from approximately 18.7% for the year ended 31 December 2022 to
approximately 53.5% for the year ended 31 December 2023. The increase was primarily driven
by combined effect of (i) the enha nced profitability of the Group ’s business in 2023; and (ii) a
temporary decline in the Group ’s equity resulting from the revival of the obligation for Jiangxi
Zhongge to pay the consideration for acquiring the equity interests of Zhonggan Communication
under the Reorganisation. As at the Latest Practicable Date, the equity was fully recovered by
approximately RMB127.7 million following the provision of funds as a gift by Zhonggan
Communication ’s Shareholders to Zhongge, resulting in decrease in the Group ’sr e t u r no n
equity. For details of the Reorganisation, please refer to the section headed ‘‘History and
Reorganisation ’’in this prospectus.
Return on assets
The Group ’s return on assets decreased from approximately 4.0% for the year ended 31
December 2021 to approximately 3.4% for the year ended 31 December 2022. The decrease
was mainly due to a combined effects of (i) a decrease in the Group ’s net profit caused by an
increase in credit impairment loss and listing expenses, and (ii) an increase in trade receivables
resulting from delayed settlement by its customers as a result of COVID-19 pandemic. The
Group ’s return on assets increased from approximately 3.4% for the year ended 31 December
2022 to approximately 5.9% for the year ended 31 December 2023. The increase was primarily
due to the enhanced profitability of the Group ’s business in 2023.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Group is exposed to (i) credit risks; (ii) liquidity risks; and (iii) interest rate risks.
Details of the risks which the Group is exposed to are set out in note 26 of the Accountants ’
Report in Appendix I to this prospectus.
FINANCIAL INSTRUMENTS
During the Track Record Period and up to Latest Practicable Date, the Group did not enter
into any financial instruments for hedging purposes.
DISTRIBUTABLE RESERVES
The Company was incorporated on 20 April 2022 as an investment holding company and
as at the Latest Practicable Date, the Company did not have reserve available for distribution to
the Shareholders.
FINANCIAL INFORMATION
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DIVIDENDS
The Company is a company incorporated in Cayman Islands, any declaration and payment
of dividends by it, as well as the amount of dividends, will be subject to the Articles of
Association and the Cayman Islands Companies Act. No dividend however, shall be declared in
excess of the amount recommended by the Board. The declaration, payment and amount of
dividends will depend on the Group ’s financial condition, earnings, capital requirements and
surplus, contractual and legal restrictions, it s ability to receive dividend payments from its
subsidiaries, and other factors that the Directors deem relevant. As at the Latest Practicable
Date, the Group did not have any specific dividend policy nor any pre-determined dividend
payout ratio.
Chinese laws require that dividends be paid only out of net profit calculated according to
PRC accounting principles, which may differ from generally accepted accounting principles in
other jurisdictions, including HKFRSs. The Company ’s subsidiaries in the PRC that are required
to set aside part of their net profit as statutory reserves in accordance with the requirements of
relevant Chinese laws and the provisions of their respective articles of association. The portions
of these subsidiaries ’ net profits are not available for distribu tion as cash dividends. Distributions
from the Company ’s PRC subsidiaries may also be restricted if they incur debt or losses, or in
accordance with any restrictive covenants in bank credit facilities or other agreements that the
Group may enter into in the future. Since the Company is an investment holding company and
relies on its subsidiaries ’ dividends as the source of funds to pay dividends, these restrictions
may limit or completely preven ti tf r o mp a y i n gd i v i d e n d s .
The companies comprising the Group did not declare or pay any dividend or distribution
during the Track Record Period.
LISTING EXPENSES
The total listing expenses in relation to the Global Offering, primarily consisting fees paid or
payable to professional parties and underwriting fees and commission, are estimated to be
approximately HK$48.3 million, w hich accounted for approximat ely 25.3% of the gross proceeds
from the Global Offering (assuming an Offer Price of HK$1.19 per Offer Share, being the mid-
point of the indicative range of the Offer Price, excluding any discretionary incentive fee which
may be paid, and that the Over-allotment Option will not be exercised). The estimated total
listing expenses consist of (i) underwriting-rela ted expenses of approxi mately HK$9.5 million,
and (ii) non-underwriting-related expenses of app roximately HK$38.8 million, including (a) fees
and expenses of the Company ’s legal advisers and auditors and reporting accountants of
approximately HK$23.6 million; and (b) other f ees and expenses of approximately HK$15.2
million. For the years ended 31 December 2021, 2022 and 2023, the Group incurred listing
expenses of app roximately HK$22.6 million, of whic h approximately HK$17.3 million was
charged to its consolidated statements of comprehensive income for the years ended 31
December 2021, 2022 and 2023, the remaining amount of approximately HK$5.3 million was
included in other receivables and will be subsequently charged to equity. It is estimated that
listing expenses of approximately HK$25.7 million will be incurred upon Listing, of which
approximately HK$12.3 million will be charged t o the consolidated statement of comprehensive
income for the year ending 31 December 2024, and approximately HK$13.4 million will be
charged to equity.
FINANCIAL INFORMATION
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UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
For the Group ’s unaudited pro forma adjusted net tangible assets, please refer to the
section headed ‘‘Appendix II – Unaudited Pro Forma Financial Information ’’in this prospectus.
RECENT DEVELOPMENT
For details, please refer to the section headed ‘‘Summary – Recent developments and no
material adverse change ’’in this prospectus.
NO MATERIAL ADVERSE CHANGE
The Directors have confirmed that, up to the date of this prospectus, there has been no
material adverse change in the financial or trading positions or prospects of the Group since 31
December 2023 (being the date of which the Group ’s latest consolidated financial statements
were made up as set out in the Accountants ’ Report included as Appendix I to this prospectus)
and there has been no event since 31 December 2023 which would materially affect the
information shown in the Accountants ’ Report included as Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 395 ---
FUTURE PLANS
Please refer to the paragraph headed ‘‘Business – Business Strategies ’’ in this prospectus
for a detailed description of the Group ’s business objectives and strategies.
REASONS FOR THE LISTING AND THE GLOBAL OFFERING
According to the Ipsos Report, due to the rise and benefits of 5G networks which greatly
enhances and facilitates the use of digital tec hnologies as well as multiple PRC government
policies such as the 13th and 14th Five Year Plan for National Informatisation* （ ‘‘十三五’’及‘‘十四
五’’國家信息化規劃 ） it is expected that there will be a significant demand for Digitalisation
Solution Services in the PRC. During the period from 2019 to 2023, the market value of
Digitalisation Solution Services grew from appro ximately RMB2,351.9 billion to approximately
RMB3,709.3 billion, representing a CAGR of approximately 12.1%. Further, it is expected that
for the period from 2024 to 2028, the market value of Digitalisation Solution Services will
continue to grow at a CAGR of approximately 9.0%, from approximately RMB4,063.0 billion to
approximately RMB5,729.4 billion.
Given the vast market size and demand for Digitalisation Solution Services in the PRC, the
Group had placed significant effort in developing this business segment and during the Track
Record Period, the Group ’s Digitalisation Solution Services was a key contributor to its overall
profitability. The gross profit derived from the Group ’s Digitalisation Solution Services business
segment during the Track Record Period was ap proximately RMB44.9 million, RMB60.8 million
and RMB75.2 million which accounted for approx imately 49.2%, 58.8% and 50.3% respectively
of the Group ’s total gross profit. Further, its gross pr ofit margin in respect of Digitalisation
Solution Services during the Track Record Period, being approximately 41.1%, 86.1% and
69.6% respectively was significantly higher than the gross profit margin in respect of its
T elecommunications Infrastructure Services, being approximately 12.5%, 12.5% and 14.8%
respectively.
The Group ’s competitiveness in respect of its Digitalisation Solution Services business
segment is highly dependent upon its core software offerings which are an integral part of its
solutions and due to the short cycle of these projec ts, it is difficult to develop new core software
in a timely and cost effective manner after the project has commenced. During the Track Record
Period, the Group had strived to expand its portfolio of intellectual property rights by developing
new core software as well as other equipment and incurred research and development
expenses of approximately RMB 19.2 million, RMB17.7 million and RMB25.9 million respectively.
Despite having devoted such extensive efforts during the Track Record Period, according to the
Ipsos Report, many integrated service providers such as the Group which also engage in the
provision of Digitalisation Solution Services also possess research and development
departments and have an extensive portfolio of intellectual property rights. As such, the Group ’s
business strategies primarily involve further st rengthening its capabilities in this business
segment through the acquisition of companies specialising in the provision of Digitalisation
Solution Services and the strengthening of its research and development capabilities which
includes establishing a research and development centre. For details, please refer to the
paragraphs headed ‘‘Business – Business strategies ’’in this prospectus.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 396 ---
While the Group has such plans in place, these business strategies involve significant
capital expenditure which, if funded through the Group ’s internal resources, may negatively
impact upon the Group ’s financial position and operations, especially given that the Group
experienced net cash outflows from operating activities of approximately RMB12.2 million and
RMB36.3 million during the years ended 31 Decemb er 2021 and 2022, respectively. Further,
during the Track Record Period, the Group ’s Infrastructure Construct ion Services projects would
commonly require upfront costs, as pursuant to its work orders with its labour suppliers, the
Group would generally provide its labour suppliers an advance payment of approximately 50%
of the contract value as stipulated in the work order within 15 days after the commencement of
works. Further, the certification and payment process of the Group ’s works also often require a
lengthy period.
The Directors have considered various means of financing including both debt and equity
financing to raise the necessary funds to finance the Group ’s business strategies and believe
that equity financing through the Listing is th em o r ep r e f e r a b l em e a n s ,d e s p i t ei t sr e l a t i v e l y
higher immediate cost, after taking into account the interest obligations, potential amount of
funds that can be raised and collateral requirements associated with debt financing. The
Directors also believe that equity financing can broaden the Group ’s capital base and entails
less risks on the part of the Group as Shareholders may look to the long-term benefits that can
be provided by the Group instead of the periodic repayment of interest and debt that are
associated with debt financing.
Without the Listing, the Group remains a privately held company and there is no guarantee
that banks or other financial institutions would lend to the Group for the purposes of
implementing its business strategies at all or on favourable terms and without the imposition of
stringent financing requirements. Especially given the Group ’s gearing ratio as at 31 December
2021, 2022 and 2023 of approximately 2.5, 2.0 and 2.7 times and the Group ’sd e b tt oe q u i t y
ratio of 2.2, 1.6 and 2.1 times, respectively. Debt f inancing generally entails interest obligations
which are subject to rates that may fluctuate th roughout the subsistence of the loan or facility.
These rates themselves are significantly affected by macro and micro economic factors which
are beyond the control of the Group, as such there is no guarantee that the rates would not
increase to such an extent that it would affect the Group ’s financial performance and its ability to
fund its business strategies. Through the Listing, the Group ’s ability to access debt financing will
be enhanced, as it will be able to access the debt capital markets and as a publicly listed
company banks and other financial institutions a re generally more willing to provide financing on
more favourable terms.
Aside from the financing benefits arising from the Listing, the Directors also believe that the
Listing will serve to enhance the Group ’s corporate profile, reputation and market presence. As
such, it will serve to distinguish the Group from other market players and may provide
reassurance and confidence to its customers and suppliers as to the sustainability and
commitment of the Group towards its growth in the i ndustry, which in turn may provide stronger
bargaining power to the Group for future endeavours and negotiations.
For the reasons set out above, the Directors consider that the Listing and the Global
Offering is in the long-term comm ercial interests of the Group as it will provide flexibility as to
financing its operations and enhance its overall image which will enable the Group to distinguish
itself from its competitors.
FUTURE PLANS AND USE OF PROCEEDS
– 387 –


--- page 397 ---
USE OF PROCEEDS
It is estimated that the net proceeds from the Global Offering (after deducting underwriting
commissions and estimated expenses payable by the Group in connection with the Global
Offering), assuming the Over-a llotment Option is not exercised and an Offer Price of HK$1.19
per Share (being the mid-point of the indicative Offer Price range), will be approximately
HK$142.1 million. The Group currently intends to apply the net proceeds in the following
manner:
 approximately 63.0% or HK$89.6 million (equivalent to approximately RMB81.4
million) will be used to selectively pursue s trategic acquisitions and acquire full
ownership in companies specialising in the pro vision of digitalisation solution services;
 approximately 15.5% or HK$22.0 million (equivalent to approximately RMB20.0
million), together with the Group ’s internal resources and/or bank borrowings, will be
used as payment of the upfront costs required in respect of prospective Integrated
Solution Services projects for 2024;
 approximately 17.3% or HK$24.6 million (equivalent to approximately RMB22.4
million), together with the Group ’s internal resources and/or bank borrowings, will be
used to strengthen the Group ’s research and development capabilities to enhance its
provision of Digitalisation Solution Servi ces, of which approximately HK$21.3 million
(equivalent to approxima tely RMB19.4 million) will be used to purchase hardware
equipment and ancillary software syst ems, and approximately HK$3.3 million
(equivalent to approximately RMB3.0 million) will be used to hire additional research
and development personnel; and
 approximately 4.2% or HK$5.9 million (equi valent to approximately RMB5.4 million)
will be used as general working capital.
Set out below are details relating to the expected time-frame for utilisation of the net
proceeds from the Global Offering:
Implementation plans
Year ending
31 December
2024 Total
Percentage
of total net
proceeds
HK$ million
(approx.)
HK$ million
(approx.) (approx.)
S e l e c t i v e l yp u r s u es t r a t e g i ca c q u i s i t i o n s .................. 8 9 . 6 8 9 . 6 6 3 . 0 %
Payment of upfront costs in respect of prospective Integrated
S o l u t i o nS e r v i c e sp r o j e c t s .......................... 2 2 . 0 2 2 . 0 1 5 . 5 %
Strengthen research and development capabilities ............ 2 4 . 6 2 4 . 6 1 7 . 3 %
G e n e r a lw o r k i n gc a p i t a l............................. 5 . 9 5 . 9 4 . 2 %
Total ......................................... 1 4 2 . 1 1 4 2 . 1 1 0 0 . 0 %
FUTURE PLANS AND USE OF PROCEEDS
– 388 –


--- page 398 ---
T o the extent that the net proceeds from the Global Offering are insufficient to fund the
Group ’s business strategies, the Directors may delay the pace of the implementation of the
Group ’s business strategies until its internal resources are sufficient. The Directors may also
consider other factors when determining the pace of implementation, such as the long term
funding needs of the Group and the need to maintain a healthy level of working capital.
Alternatively, the Directors may also consider bank financing or other debt or equity fund raising
exercises, though this may affect the Group in such ways as disclosed in the paragraph headed
‘‘Reasons for the Listing and the Global Offering ’’in this section.
If the Offer Price is fixed at the high-end of the indicative range of the Offer Price, being
HK$1.25 per Offer Share, the net proceeds to be received by the Group from the Global Offering
will increase by approximately HK$9.1 million. The Group intends to apply the additional net
proceeds for the above purposes on a pro-rata basis. If the Offer Price is set at the low-end of
the indicative range of the Offer Price, being HK$1.13 per Offer Share, the net proceeds to be
received by the Group from the Global Offering w ill decrease by approximately HK$9.1 million.
The Group intends to reduce the net proceeds for the above purposes on a pro-rata basis.
If the Over-allotment Option is exercised in f ull, it is estimated that the additional net
proceeds from the offering of these additional Shares to be received by the Group, after
deducting the estimated underwriting fee, incentive fee and estimated expenses payable by it,
will be approximately (i) HK$28.5 million, assumi ng the Offer Price is fixed at the high-end of the
indicative range of the Offer Price, being HK $1.25 per Offer Share ; (ii) HK$27.1 million,
assuming the Offer Price is fixed at the mid-point of the indicative range of the Offer Price, being
HK$1.19 per Offer Share; and (iii ) HK$25.8 million, assuming the Offer Price is fixed at the low-
end of the indicative range of the Offer Price, being HK$1.13 per Offer Share. Any additional
proceeds received by the Group from the exercise of the Over-allotment Option will also be
allocated to the above purposes on a pro-rata basis.
T o the extent that the net proceeds from the Global Offering are not immediately applied to
the above purposes and to the extent permitted by applicable laws and regulations, the Group
will only deposit the net proceeds into short-te rm interest-bearing accounts at licenced
commercial banks and/or other authorised financial institutions (as defined under the SFO or
applicable laws and regulations in other jurisdictions). The Group will make appropriate
announcement if there is any material change to the above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
– 389 –


--- page 399 ---
SOLE OVERALL COORDINATOR AND SOLE GLOBAL COORDINATOR
Zhongtai International Securities Limited
HONG KONG UNDERWRITERS
Zhongtai International Securities Limited
CCB International Capital Limited
BOCOM International Securities Limited
CMB International Capital Limited
ABCI Securities Company Limited
ICBC International Securities Limited
CMBC Securities Company Limited
First Shanghai Securities Limited
China Sunrise Securities (International) Limited
Yue Xiu Securities Company Limited
Patrons Securities Limited
Victory Securities Company Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
Livermore Holdings Limited
Valuable Capital Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
The Hong Kong Public Offer
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, the Company has agreed to initially
offer 16,000,000 new Shares for subscription by members of the public in Hong Kong on and
subject to the terms and conditions of this prospectus and the Hong Kong Underwriting
Agreement.
Subject to, among other conditions, (a) the granting of the approval by the Listing
Committee for the listing of, and permission to deal in, all the Shares in issue and any Shares to
be issued as mentioned in this prospectus (including any additional Shares which may be issued
pursuant to the exercise of the Over-allotment Option and any option that may be granted under
the Share Option Scheme) and such approval not subsequently withdrawn, (b) and certain other
conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have
severally, but not jointly, agreed to subscribe o r procure subscribers to subscribe for their
respective applicable proportions of the Hong Kong Public Offer Shares which are not taken up
under the Hong Kong Public Offer on the terms and conditions of this prospectus and the Hong
Kong Underwriting Agreement.
UNDERWRITING
– 390 –


--- page 400 ---
In addition, the Hong Kong Underwriting Agreement is conditional on and subject to the
International Underwriting Agreement having been executed, becoming, and continuing to be,
unconditional and not having been terminated.
Grounds for termination
The respective obligations of the Hong Kong Underwriters to subscribe, or procure
subscribers to subscribe for, the Hong Kong Public Offer Shares under the Hong Kong
Underwriting Agreement are subject to termination. The Sole Overall Coordinator and the Sole
Global Coordinator (for itself and on behalf of the Hong Kong Underwriters) may upon giving
notice in writing to the Company, terminate the Hong Kong Underwriting Agreement with
immediate effect if any of the following events occurs at or prior to 8:00 a.m. on the Listing Date:
(a) there has come to the notice of the Sole Over all Coordinator and the Sole Global Coordinator:
(i) that any statement contained in this prospectus, the post hearing information
pack, the formal notice, any submissions, documents or information provided to
the Sole Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator and/
or any of the Underwriters and/or any notices, announcements, advertisements,
communications or other documents issued or used by or on behalf of the
Company in connection with the Global Offering (including any supplement or
amendments thereto) (collectively, the ‘‘Relevant Documents ’’) was, when it was
issued, or has become or been discovered to be, untrue, incorrect, misleading or
deceptive in any material respect or that any forecast, expression of opinion,
intention or expectation expressed in any of the Relevant Documents is not, in
the sole and absolute opinion of the Sole Overall Coordinator and the Sole
Global Coordinator (for itself and on behalf of the Hong Kong Underwriters), fair
and honest and based on reasonable assumptions, when taken as a whole; or
(ii) that any matter has arisen or has been discovered which would or might, had it
arisen or been discovered immediately before the respective dates of the
publication of the Relevant Documents, in the sole and absolute opinion of the
Sole Overall Coordinator and the Sole Global Coordinator, constitute a material
omission therefrom; or
(iii) any breach of any of the obligations imposed or to be imposed upon any party to
the Hong Kong Underwriting Agreement or the International Underwriting
Agreement (in each case, other than on the part of any of Underwriters) which,
in the sole and absolute opinion of the Sole Overall Coordinator and the Sole
Global Coordinator is material; or
(iv) any event, act or omission which gives or is likely to give rise to any liability of
any of the Company, the Controlling Shareholders and the executive Directors
(the ‘‘Warrantors ’’) arising out of or in connection with the breach of warranties,
representations, agreements and undertakings (the ‘‘Warranties ’’) under the
Hong Kong Underwriting Agreement or under the International Underwriting
Agreement; or
UNDERWRITING
– 391 –


--- page 401 ---
(v) any of the Warranties given by the Warrantors under the Hong Kong
Underwriting Agreement or under the International Underwriting Agreement is
untrue, inaccurate, misleading or breached in any material respect when given or
repeated as determined by the Sole Overall Coordinator and the Sole Global
Coordinator in its sole and absolute discretion; or
(vi) the approval by the Stock Exchange of the listing of, and permission to deal in, the
Shares in issue and any Shares to be issued as mentioned in this prospectus is
refused or not granted, or is qualified (other than subject to customary conditions),
on or before the Listing Date, or if granted, the approval is subsequently withdrawn,
qualified (other than by customary conditions) or withheld; or
(vii) the Company withdraws any of the Relevant Documents or the Global Offering;
or
(viii) any person (other than the Hong Kong Underwriters) has withdrawn or sought to
withdraw its consent to being named in any of the Relevant Documents or to the
issue of any of the Relevant Documents; or
(ix) a portion of the orders in the book-building process, which is considered by the
Sole Overall Coordinator and the Sole Global Coordinator (for itself and on
behalf of the Hong Kong Underwriters) in its sole and absolute opinion to be
material, at the time the International Underwriting Agreement is entered into,
have been withdrawn, terminated or cancelled, and the Sole Overall Coordinator
and the Sole Global Coordinator, in its sole and absolute discretion, conclude
that it is therefore inadvisable or inexpe dient or impracticable to proceed with the
Global Offering; or
(x) an authority or a political body or organisation in any relevant jurisdiction has
commenced any investigation or other action, or announced any intention to
investigate or take other action, against any of the Directors and senior
management members of the Group; or
(xi) any change or development involving a prospective material adverse change
(whether permanent or not) in the asse ts, liabilities, shareholders ’ equity,
management, performance, business affairs, prospects or financial or trading
position of any member of the Group; or
(xii) any loss or damage has been sustained by any member of the Group
(howsoever caused and whether or not the subject of any insurance or claim
against any person) which is considered by the Sole Overall Coordinator and the
Sole Global Coordinator (for itself and on behalf of the Hong Kong Underwriters)
in its sole and absolute opinion to be material; or
UNDERWRITING
– 392 –


--- page 402 ---
(b) there shall develop, occur, exist, or come into effect:
(i) any local, national, regional, international event or circumstance, or series of
events or circumstances, beyond the reasonable control of the Underwriters
(including, without limitation, any acts of government or orders of any courts,
strikes, calamity, crisis, lock-outs, fire, explosion, flooding, civil commotion, acts
of war, outbreak or escalation of hostilities (whether or not war is declared), acts
of God, acts of terrorism, declaration of a local, regional, national or international
emergency, riot, public disorder, economic sanctions, outbreaks of diseases,
pandemics or epidemics (including, without limitation, COVID-19; Severe Acute
Respiratory Syndrome, avian influenza A (H5N1), influenza B, Swine Flu (H1N1),
Middle East Respiratory Syndrome or such related or mutated forms) or
interruption or delay in transportation); or
(ii) any change or development involving a prospective change, or any event or
circumstance or series of events or circumstances likely to result in any change
or development involving a prospective change, in any local, regional, national,
international, financ ial, economic, political, military, industrial, fiscal, legal
regulatory, currency, credit or market conditions (including, without limitation,
conditions in the stock and bond markets, money and foreign exchange markets,
the interbank markets and credit markets); or
(iii) any moratorium, suspension or restriction on trading in securities generally
(including, without limitation, any imposition of or requirement for any minimum or
maximum price limit or price range); or
(iv) any new law(s), rule(s), statute(s ), ordinance(s), regulation(s), order(s),
judgement(s), decree(s) or ruling(s) of any government authority ( ‘‘Law(s) ’’), or
any change or development involving a prospective change in existing Laws, or
any event or circumstance or series of events or circumstances likely to result in
any change or development involving a prospective change in the interpretation
or application of existing laws by any court or other competent authority, in each
case, in or affecting any of Hong Kong, the PRC, the Cayman Islands, the BVI
(or any member thereof) or any other jurisdictions relevant to the business and/or
the operation of any member of the Group or the Global Offering (the ‘‘Specific
Jurisdictions ’’); or
(v) any general moratorium, suspension or restriction on commercial banking
activities, or any disruption in commercial banking activities, foreign exchange
trading, trading in securities on the Stock Exchange, the New York Stock
Exchange, the London Stock Exchange, the Shanghai Stock Exchange, the
Nasdaq National Market, the Shenzhen Stock Exchange or the T okyo Stock
Exchange, or securities settlement or clearance services or procedures or
matters, in or affecting any of t he Specific Jurisdictions; or
(vi) the imposition of economic sanctions, in whatever form, directly or indirectly, by
or for any of the Specific Jurisdictions; or
UNDERWRITING
– 393 –


--- page 403 ---
(vii) a change or development involving a prospective change in or affecting taxation
or exchange control (or the implementation of any exchange control), currency
exchange rates or foreign investment laws (including, without limitation, any
change in the system under which the value of the Hong Kong currency is linked
to that of the currency of the United States or a material fluctuation in the
exchange rate of the Hong Kong dollar or the Renminbi against any foreign
currency) in or affecting any of the Specific Jurisdictions or affecting an
investment in the Shares; or
(viii) any change or development involving a prospective material change, or a
materialisation of, any of the risks set out in the section headed ‘‘Risk Factors ’’in
this prospectus; or
(ix) any litigation or claim of any third party being threatened or instigated against
any member of the Group or any of the Directors; or
(x) any of the Directors and senior management members of the Group being
charged with an indictable offence or prohibited by operation of law or otherwise
disqualified from taking part in the management of a company; or
(xi) the chairman or any chief executive of the Company vacating his office; or
(xii) the commencement by any governmental, regulatory or political body or
organisation of any investigation or action against any of the Directors and
senior management members of the Group in his or her capacity as such or an
announcement by any governmental, regulatory or political body or organisation
that it intends to take any such investigation or action; or
(xiii) a contravention by any member of the Group or any of the Directors of the
Listing Rules, the Companies Ordinance or any other laws applicable to the
Global Offering; or
(xiv) a prohibition on the Company for whatever reason from allotting, issuing or
selling the Offer Shares and/or the Shares that may be issued pursuant to the
exercise of the Over-allotment Option pursuant to the terms of the Global
Offering; or
(xv) non-compliance of this prospectus and the other Relevant Documents or any
aspect of the Global Offering with the Listing Rules or any other laws applicable
to the Global Offering; or
(xvi) a valid demand by any creditor for repayment or payment of any indebtedness of
any member of the Group or in respect of which any member of the Group is
liable prior to its stated maturity; or
UNDERWRITING
– 394 –


--- page 404 ---
(xvii) the issue or requirement to issue by the Company of a supplement or
amendment to this prospectus and/or any other documents in connection with
the Global Offering pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Listing Rules or any requirement or request of the
Stock Exchange and/or the SFC; or
(xviii) a petition or an order is presented for the winding-up or liquidation of any
member of the Group or any member of the Group makes any composition or
arrangement with the Group ’s creditors or enters into a scheme of arrangement
or any resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is appointed to take over all or part of
the assets or undertaking of any member of the Group or anything analogous
thereto occurs in respect of any member of the Group,
which, in each case individually or in aggregate, in the sole and absolute opinion of the Sole
Overall Coordinator and the Sole Global Coordinator (for itself and on behalf of the Hong Kong
Underwriters):
(a) has or is or will or may or could be expected to have a material adverse effect on the
assets, liabilities, business, general affairs, management, shareholders ’ equity, profits,
losses, results of operation, financial, trading or other conditions or prospects or risks
of the Company or the Group or any member of the Group or on any present or
prospective shareholder of the Company in his, her or its capacity as such;
(b) has or will or may have or could be expected to have a material adverse effect on the
success, marketability or pricing of the Global Offering or the level of applications
under the Hong Kong Public Offer or the level of interest under the International
Placing;
(c) makes or will make or may make it inadvisable, inexpedient or impracticable for any
part of the Hong Kong Underwriting Agreement or the International Underwriting
Agreement or the Global Offering to be performed or implemented or proceeded with
as envisaged in accordance with the Hong Kong Underwriting Agreement, the
International Underwriting Agreement and this prospectus or to market the Global
Offering or shall otherwise result in an interruption to or delay thereof; or
(d) has or will or may have the effect of making any part of the Hong Kong Underwriting
Agreement (including underwriting) or the International Underwriting Agreement
incapable of performance in accordance with their respective terms or which prevents
the processing of applications and/or payments pursuant to the Global Offering or
pursuant to the underwriting thereof.
UNDERWRITING
– 395 –


--- page 405 ---
Undertakings
Lock-up undertakings to the Stock Exchange
Undertakings by the Company
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Stock
Exchange not to (i) issue further Shares or securities convertible into equity securities of the
Company (whether or not of a class already listed) or (ii) enter into any agreement to such issue
within six months from the Listing Date (the ‘‘Six-Month Period ’’) (whether or not such issue of
Shares or securities will be completed within six months from the Listing Da te), except in certain
circumstances as permitted by Rule 10.08(1) to (5) of the Listing Rules.
Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of the Controlling Shareholders have
undertaken to the Stock Exchange and the Company that, except pursuant to the Global
Offering (including the exercise of the Over-allotment Option and/or the options under the Share
Option Scheme) and/or the Stock Borrowing Agreement, he/she/it shall not and shall procure
that the relevant registered holder(s) and his/her/its associates and companies controlled by
him/her/it and any nominee or trustee holding in trust for him/her/it shall not, without the prior
written consent of the Stock Exchange or unless otherwise in compliance with the Listing Rules:
(a) in the period commencing on the date with reference to which disclosure of its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date (the ‘‘First Six-month Period ’’), dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the Shares or securities in respect of which he/
she/it is shown by this prospectus to be the beneficial owner (whether direct or
indirect); or
(b) in the period of six months commencing on the date on which the First Six-month
Period expires (the ‘‘Second Six-month Period ’’), dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of any of the shares or securities referred to in (a) above if,
immediately following such disposal or upon the exercise or enforcement of such
options, rights, interests or encumbrances, any of the Controlling Shareholders would
cease to be a controlling shareholder of the Company (as defined in the Listing
Rules).
UNDERWRITING
– 396 –


--- page 406 ---
Each of the Controlling Shareholders have further undertaken to the Stock Exchange and
the Company respectively that, within the period commencing on the date by reference to which
disclosure of the shareholdin g of the Controlling Shareholders in the Company is made in this
prospectus and ending on the date on which the Second Six-month Period expires:
(a) in the event that he/she/it pledges or charges any of his/her/its direct or indirect
interest in the Shares or other securities of the Company beneficially owned by him/
her/it in favour of an authorised institution (as defined in the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong)) pursuant to Note (2) to Rule 10.07(2) of the
Listing Rules, immediately inform the Company in writing of such pledge/charge
together with the number of securities of the Company so pledged/charged; and
(b) when he/she/it receives indications, either verbal or written, from the pledgee/chargee
that any of the pledged/charged securities will be disposed of, he/she/it will must
immediately inform the Company of such indications.
Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, in the event that the Company
h a sb e e ni n f o r m e do fa n ym a t t e r sr e f e r r e dt oi nN o te (3) to Rule 10.07(2) of the Listing Rules as
described above, the Company shall forthwith publish an announcement giving details of the
same in accordance with the requireme nts of Rule 2.07C of the Listing Rules.
Lock-up undertakings to the Hong Kong Underwriters
Undertakings by the Company
Pursuant to the Hong Kong Underwriting Agreement, the Company has undertaken to and
covenants with the Sole Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the
Joint Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters that, except for
the offer and sale of the Offer Shares pursuant to the Global Offering (including the allotment
and issue of Shares under the Capitalisation Issue, upon the exercise of the Over-allotment
Option or upon the exercise of options granted under the Share Option Scheme) and
the Stock Borrowing Agreement, the Company will not, without the prior written consent of the
Sole Overall Coordinator and the Sole Global Coordinator, (for itself and on behalf of the Hong
Kong Underwriters) and unless in co mpliance with the Listing Rules:
(a) at any time during the First Six-month Period, offer, accept subscription for, pledge,
lend, assign, mortgage, charge, allot, issue, sell, contract to allot, issue or sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant or
agree to grant any option, right or warrant to purchase or subscribe for, lend or
otherwise transfer or dispose of, either directly or indirectly, or buyback, any of the
share capital of the Company or any other securities of the Company convertible into
or exercisable or exchangeable for or that represent the right to receive, or interests
in, any such share capital or any derivatives with the Shares as underlying securities;
or
(b) at any time during the First Six-month Period, enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such share capital or securities or any interest therein;
or
UNDERWRITING
– 397 –


--- page 407 ---
(c) at any time during the First Six-month Period, enter into any transaction with the same
economic effect as any transaction described in paragraphs (a) or (b) above; whether
any of the foregoing transactions described above is to be settled by delivery of share
capital or such other securities, in cash or otherwise or publicly disclose that the
Group will or may enter into any transaction described above; or
(d) at any time during the Second Six-month Period, do any of the acts set out in
paragraphs (a) to (c) above, so as to result i n the Controlling Shareholders (together
with any of its associates) either individually or taken together with the others of them
cease to be a controlling shareholder (within the meaning of the Listing Rules) of the
Company.
The Company has further agreed that, in the event the Company does any of the acts set
out in paragraphs (a) to (d) above during the Second Six-Months Period (whether or not such
act will be completed in the aforesaid period), the Group shall take all reasonable steps to
ensure that any such act, if done, will not create a disorderly or false market for any of the
Shares or other securities of the Company or any interest therein.
Undertakings by the Controlling Shareholders
Each of the Controlling Shareholders has respectively undertaken to the Company, the
Sole Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the Joint Bookrunners,
the Joint Lead Managers and the Hong Kong Underwriters that:
(a) during the First Six-month Period, he/she/it shall not, and shall procure that the
relevant registered holder(s) and his/her/its associates and companies controlled by
him/her/it and any nominee or trustee holding in trust for him/her/it shall not, without
the prior written consent of the Sole Overall Coordinator and the Sole Global
Coordinator (for itself and on behalf of the Hong Kong Underwriters) and unless in
compliance with the requirements of the Listing Rules except pursuant to the Stock
Borrowing Agreement and, (i) offer, pledge, charge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant or agree
to grant any option, right or warrant to purchase or subscribe for, lend or otherwise
transfer or dispose of or otherwise create encumbrance or security interest of any kind
over, in whole or in part, either directly or indirectly, any of the Shares or any
securities convertible into or exercisable or exchangeable for, or that represent the
right to receive, any such Shares or such securities (together, the ‘‘Relevant
Securities ’’); or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of acquistion or
ownership of the Relevant Securities, whether any of the foregoing transactions is to
be settled by delivery of the Shares or such other securities, in cash or otherwise; or
(iii) agree (conditionally or unconditionally) to enter into or effect any transaction with
the same economic effect as any of the transactions referred to in paragraphs (i) or
(ii) above; or (iv) announce any intention to enter into or effect any of the transactions
referred to in paragraphs (i), (ii) or (iii) above;
UNDERWRITING
– 398 –


--- page 408 ---
(b) during the Second Six-month Period, he/she/it shall not, and shall procure that the
relevant registered holder(s) and their respective associates or companies controlled
by him/her/it and any nominee or trustee holding in trust for him/her/it shall not,
without the prior written consent of the Sol e Overall Coordinator and the Sole Global
Coordinator (for itself and on behalf of the Hong Kong Underwriters) and unless in
compliance with the Listing Rules, (i) sell, transfer, dispose of, offer to sell, transfer,
dispose of, nor enter into any agreement to sell, transfer or dispose of or otherwise
create any options, rights, interests or encumbrances in respect of any Relevant
Securities held by him/her/it or any of his/her/its associates or companies controlled
by him/her/it or any nominee or trustee holdin g in trust for him/her/it if, immediately
following such disposal or upon the exercise or enforcement of such options, rights,
interests or encumbrances, he/she/it would cease to be a controlling shareholder (as
defined in the Listing Rules) or would together with other Controlling Shareholders
cease to be a group of controllin g shareholders (as defined in the Listing Rules) of the
Company; or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of acquisition or ownership of the
Relevant Securities, whether any of the foregoing transactions is to be settled by
delivery of the Shares or other securities, in cash or otherwise; or (iii) agree
(conditionally or unconditionally) to enter into or effect any transaction with the same
economic effect as any of the transactions referred to in paragraphs (i) or (ii) above;
or (iv) announce any intention to enter into or effect any of the transactions referred to
in paragraphs (i), (ii) or (iii) above;
(c) in the event of a disposal of any Relevant Securities or any interest therein within
Second Six-month Period, he/she/it shall take all reasonable steps to ensure that such
a disposal shall not create a disorderly or false market for any Shares or other
securities of the Company; and
(d) he/she/it shall, and shall procure that his/her/its associates and companies controlled
by and nominees or trustees holding in trust for him/her/it shall, comply with all the
restrictions and requirements under the Listing Rules on the sale, transfer or disposal
by him/her/it or by the registered holder controlled by him/her/it of any Shares.
Each of the Controlling Shareholders has fu rther undertaken to the Company, the Sole
Sponsor, the Sole Overall Coordinator, the Sole Global Coordinator, the Joint Bookrunners, the
Joint Lead Managers and the Hong Kong Underwriters that, from the date hereof up to the
expiry of the first 12 months from the Listing Date, he/she/it will:
(a) when he/she/it pledges or charges any securities or interests in the Relevant
Securities, immediately inform the Company, the Sole Sponsor, the Sole Overall
Coordinator and the Sole Global Coordinator in writing of such pledges or charges
together with the number of securities and nature of interest so pledged or charged;
and
(b) when he/she/it receives indications, either verbal or written, from any pledgee or
chargee that any of the pledged or charged securities or interests in the securities of
the Company will be sold, transferred or disposed of, immediately inform the
Company, the Sole Sponsor, the Sole Overall Coordinator and the Sole Global
Coordinator in writing of such indications.
UNDERWRITING
– 399 –


--- page 409 ---
The International Placing
In connection with the International Placing, it is expected that the Company will enter into
the International Underwriting Agreement with, among others, the International Underwriters, on
terms and conditions that are substantially similar to the Hong Kong Underwriting Agreement as
described above together with the additional terms described below.
The Company intends to grant to the International Underwriters, the Over-allotment Option,
exercisable at the discretion of the Sole Overall Coordinator and the Sole Global Coordinator
(for itself and on behalf of the International Underwriters) at any time from Listing Date until 30
days after the last day of lodging applications under the Hong Kong Public Offer, to require the
Company to allot and issue up to an aggregate of 24,000,000 additional Offer Shares
(representing 15% of the Offer Shares initially available under the Global Offering) at the Offer
Price under the International Placing to, among other things (such as effecting the permitted
stabilising actions as set out in the paragraph headed ‘‘Structure and Conditions of the Global
Offering – Stabilisation ’’ in this prospectus), cover over-allocations (if any) in the International
Placing.
Under the International Underwriting Agreement, subject to the exercise of the Over-
allotment Option and the conditions set forth therein, the International Underwriters are expected
to severally, but not jointly, agree to act as agents of the Company to procure subscribers for
their respective applicable proportions of the Inte rnational Placing Shares initially being offered
pursuant to the International Placing. It is expected that the International Underwriting
Agreement may be terminated on similar grounds as the Hong Kong Underwriting Agreement.
Potential investors shall be reminded that in the event that the International Underwriting
Agreement is not entered into, the Global Offering will not proceed. The International
Underwriting Agreement is conditional on and subject to the Hong Kong Underwriting
Agreement having been executed, becoming unconditional and not having been terminated. It is
expected that pursuant to the International Underwriting Agreement, the Company and the
Controlling Shareholders will make similar unde rtakings as those given pursuant to the Hong
Kong Underwriting Agreement as described in the paragraph headed ‘‘Underwriting
arrangements and expenses – Undertakings – Lock-up undertakings to the Hong Kong
Underwriters ’’in this section.
Commission and expenses
The Sole Overall Coordinator (for itself and on behalf of the Underwriters) will receive an
underwriting commission of 5.0% of the aggregate Offer Price of all the Offer Shares (the ‘‘Fixed
Fees ’’) including any Offer Shares to be issued pursuant to the Over-allotment Option and
regardless of whether any Offer Shares are re-a llocated from the International Placing to the
Hong Kong Public Offer or re-allocated from the Hong Kong Public Offer to the International
Placing. In addition, at the sole and absolute discretion of the Company, the Underwriters may
also receive an incentive fee of 4.0% of the aggregate Offer Price in respect of all Offer Shares
(the ‘‘Discretionary Fees ’’) including any Offer Shares to be issued pursuant to the Over-
allotment Option. Assuming the Discretionary Fees are paid in full, the ratio of Fixed Fees and
Discretionary Fees is therefore 56:44.
UNDERWRITING
– 400 –


--- page 410 ---
Assuming the Over-allotment Option is not exercised, the estimated underwriting fee
(including both the Fixed Fees and the Discretionary Fees), the sponsor fees, the documentation
and advisory fee, listing fees, the Stock Exchange trading fee, the brokerage, the SFC
transaction levy, the AFRC transaction levy legal and other professional fees together with
printing and other expenses relating to th e Global Offering are estimated to amount to
approximately HK$48.3 million in total based on an Offer Price of HK$1.19 (being the mid-point
of the indicative Offer Price range) and 160,000,000 Offer Shares, and are payable by the
Company.
The Sole Sponsor will receive an aggregate amount of HK$6.0 million as sponsor fees.
SOLE SPONSOR ’S, SOLE OVERALL COORDINATOR ’S, SOLE GLOBAL COORDINATOR ’S,
JOINT BOOKRUNNERS, JOINT LEAD MANAGERS AND UNDERWRITERS ’ INTERESTS IN
THE COMPANY
The Sole Sponsor will receive a sponsorship and documentation fee. The Sole Overall
Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwriters) will
receive an underwriting commission. Particulars of these underwriting commission and expenses
are set forth under the paragraph headed ‘‘Underwriting arrangements and expenses –
Commission and expenses ’’in this section.
The Company has appointed Zhongtai International Capital Limited as its compliance
adviser pursuant to Rule 3A.19 of the Listing Rules for the period commencing on the Listing
Date and ending on the date on which the Company complies with Rule 13.46 of the Listing
Rules in respect of the despatch of the Company ’s annual report for the first full financial year
commencing after the Listing Date.
Save as disclosed above, none of the Sole Sponsor, the Sole Overall Coordinator, the Sole
Global Coordinator, the Joint Bookrunners, the Joint Lead Managers and the Underwriters is
interested legally or beneficially in shares o f any members of the Group or has any right or
option (whether legally enforceable or not) to subscribe for or purchase or to nominate persons
to subscribe for or purchase securities in any members of the Group nor any interest in the
Global Offering.
INDEPENDENCE OF THE SOLE SPONSOR
The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in
Rule 3A.07 of the Listing Rules.
MINIMUM PUBLIC FLOAT
The Director will ensure that there will be a minimum 25% of the issued shares held in
public hands in accordance with Rule 8.08 of the Listing Rules after completion of the Global
Offering.
UNDERWRITING
– 401 –


--- page 411 ---
THE STRUCTURE OF THE GLOBAL OFFERING
The Global Offering consists of the Hong Kong Public Offer and the International Placing.
Zhongtai International Securities Limited is the Sole Overall Coordinator and the Sole Global
Coordinator to the Global Offering.
An aggregate of 16,000,000 Shares have been initially allocated to the Hong Kong Public
Offer for subscription, subject to reallocation as mentioned below. An aggregate of 144,000,000
Shares are initially offered under the International Placing for subscription outside the United
States in reliance on Regulation S, subject t o reallocation and the Ov er-allotment Option as
mentioned below.
Investors may apply for the Hong Kong Public Offer Shares under the Hong Kong Public
Offer or apply for or indicate an interest for International Placing Shares under the International
Placing, but may not do both. The Directors, the Sole Overall Coordinator and the Sole Global
Coordinator will take all reasonable steps to identify any multiple applications under the Hong
Kong Public Offer and the International Placing which are not allowed and are bound to be
rejected. The Offer Shares will represent 25% of the total Shares in issue of the Company
immediately following completion of the Global O ffering (assuming the O ver-allotment Option is
not exercised and without taking into account any Shares which may be issued upon the
exercise of any options which may be granted under the Share Option Scheme). If the Over-
allotment Option is exercised in full, the Offer Shares will represent approximately 27.71% of the
total enlarged share capital of the Company immediately following completion of the Global
Offering and the exercise of the Over-allotment Option (without taking into account any Shares
which may be issued upon exercise of any options which may be granted under the Share
Option Scheme).
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offer.
PRICING OF THE GLOBAL OFFERING
The Offer Price will not be more than HK$1.25 per Offer Share and is expected to be not
less than HK$1.13 per Offer Share, unless otherwise announced not later than the morning of
the last day for lodging applications under the Hong Kong Public Offer, as explained below.
Prospective investors should be aware that the Offer Price to be determined on the Price
Determination Date may be, but is not expected to be, lower than the indicative Offer Price
range stated in this prospectus. Applicants for the Hong Kong Public Offer Shares may be
required to pay the maximum indicative Offer Price of HK$1.25 per Offer Share plus brokerage
of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%, amounting to a total of HK$2,525.21 for each board lot of 2,000
Shares. If the final Offer Price is less than the maximum indicative Offer Price, arrangements will
be made to refund any excess amount to the applicants (subject to application channels),
without interest.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 402 –


--- page 412 ---
The International Underwriters are soliciting from prospective investors indications of
interest in acquiring the International Placing Shares in the International Placing. Prospective
investors will be required to specify the number of International Placing Shares under the
International Placing they would be prepared to acquire either at different prices or at a
particular price. This process, known as ‘‘book-building ’’, is expected to continue up to, and to
cease on or around the Price Determination Date.
If, based on the level of interest expressed by prospective professional, institutional and
other investors during the book-building process, the Sole Overall Coordinator and the Sole
Global Coordinator (for itself and on behalf of the Underwriters), where considered appropriate,
and with consent of the Company, may reduce, the number of Offer Shares being offered under
the Global Offering and/or the indicative Offer Price range below that stated in this prospectus at
any time on or prior to the morning of the last day for lodging applications under the Hong Kong
Public Offer. In such case, the Co mpany will, as soon as practicable following the decision to
make such reduction, and in any event not later than the morning of the last day for lodging
applications under the Hong Kong Public Offer, publish a notice on the Stock Exchange ’s
website at www.hkexnews.hk and the Company ’sw e b s i t ea twww.gantongjt.com (the contents
of the website do not form a part of this prospectus). The Company will also, as soon as
practicable following the decision to make such a 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.
Before submitting applications for the Hong Kong Public Offer Shares, applicants should
have regard to the possibility t hat any announcement of a reduction in the number of Offer
Shares and/or the indicative Offer Price range may not be made until the day which is the last
day for lodging applications under the Hong Kong Public Offer. Such notice will also confirm or
revise, as appropriate, of the working capital statement and the Global Offering statistics as
currently set forth in this prospectus and any other financial information which may change as a
result of such reduction. In the absence of any such notice so published, the Offer Price, if
agreed upon with the Company, the Sole Overall Coordinator and the Sole Global Coordinator
(for itself and on behalf of the Underwriters), will under no circumstances be set outside the
Offer Price range as stated in this prospectus. However, if the number of Offer Shares and/or
the Offer Price is reduced, the Company will 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.
If you have already submitted an application for the Hong Kong Public Offer Shares before
the last day for lodging applications under the Hong Kong Public Offer, you will not be allowed
to subsequently withdraw your application. 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 p rospectus, or if the Com pany becomes aware that
there has been a significant change affecting any matter contained in this prospectus or a
significant new matter has arisen, the inclusion of information in respect of which would have
been required to be in this prospectus if it had arisen before this prospectus was issued, after
the issue of this prospectus and before the commencement of dealings in our Shares as
prescribed under Rule 11.13 of the Listing Rules, we are required to cancel the Global Offering
and relaunch the offer and issue a supplemental prospectus or a new prospectus and complete
the requisite associated settlement processes on the FINI platform afresh.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 403 –


--- page 413 ---
In the event of a reduction in the number of Offer Shares, the Sole Overall Coordinator and
the Sole Global Coordinator (for itself and on behalf of the Underwriters) may, at its discretion,
reallocate the number of Offer Shares to be offered in the Hong Kong Public Offer and the
International Placing, provided that the number of Offer Shares comprised in the Hong Kong
Public Offer shall not be less than 10% of the total number of Offer Shares available under the
Global Offering (assuming the Over-a llotment Option is not exercised).
The final Offer Price, the level of indication of interest in the International Placing, the level
of applications in the Hong Kong Public Offer and the basis of allocation of the Hong Kong
Public Offer Shares are expected to be announced on Tuesday, 2 July 2024 through a variety of
channels as described in the paragraph headed ‘‘How to Apply for the Hong Kong Public Offer
Shares – B. Publication of results ’’in this prospectus.
The Offer Price is expected to be fixed by an agreement between the Sole Overall
Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwriters) and
the Company, 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 Friday, 28 June
2024.
If, for any reason, the Sole Overall Coordinator and the Sole Global Coordinator (for itself
and on behalf of the Underwriters) and the Company are unable to reach an agreement on the
Offer Price by 12:00 noon on Friday, 28 June 2024, the Global Offering will not proceed and will
lapse immediately.
CONDITIONS OF THE GLOBAL OFFERING
The Hong Kong Public Offer and the International Placing will be conditional upon:
(i) the Stock Exchange granting approval for the listing of, and permission to deal in, the
Shares in issue, any Shares to be issued pursuant to the Capitalisation Issue and the
Global Offering, any Shares which may be issued pursuant to the exercise of the
Over-allotment Option and any Shares which may be issued pursuant to the exercise
of any options that may be granted under the Share Option Scheme, and such listing
and permission not subsequently having been withdrawn or revoked prior to the
commencement of dealings in the Shares on the Stock Exchange;
(ii) the agreement on the final Offer Price between the Sole Overall Coordinator and the
Sole Global Coordinator (for itself and on behalf of the Underwriters) and the
Company being entered into on the Price Determination Date; and
(iii) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of International Underwriters under the International
Underwriting Agreement becoming and remaining unconditional and not having been
terminated in accordance with the terms and conditions of the respective agreements,
in each case, on or before the dates and times specified in the Hong Kong Underwriting
Agreement or the International Underwritin g Agreement (unless and to the extent such
conditions are validly waived on or before such dates and times) and in any event not later than
the date which is the 30th day after the date of this prospectus.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 404 –


--- page 414 ---
If any of the above conditions has not been fulfilled or waived prior to the times and date(s)
specified, the Global Offering will lapse and the Stock Exchange will be notified immediately.
Notice of lapse of the Global Offering will be caused to be published by the Company on the
Stock Exchange ’s website at www.hkexnews.hk and the Company ’s website at
www.gantongjt.com the next day following such lapse. In such event, all application monies
will be refunded, without interest. The terms on which the application monies will be refunded
are set forth under the paragraph ‘‘How to Apply for the Hong Kong Public Offer Shares – D.
Despatch/Collection of Share Certificates and Refund Application Monies ’’in this prospectus. In
the meantime, all application monies received from the Hong Kong Public Offer will be held in a
separate bank account (or separate bank accounts) with the receiving bank(s) or other licenced
bank(s) in Hong Kong.
THE HONG KONG PUBLIC OFFER
The Company is initially offering 16,000,000 Shares for subscription under the Hong Kong
Public Offer at the Offer Price, representing 10% of the total number of the Offer Shares being
offered in the Global Offering, subject to the reallocation as mentioned below. Subject to the
reallocation of Offer Shares between the Hong Kong Public Offer and the International Placing,
the Hong Kong Public Offer Shares will represent 2.5% of the total Shares in issue of the
Company immediately following completion of the Capitalisation Issue and the Global Offering
(assuming the Over-allotment Option is not exe rcised and without taking into account any
Shares which may be granted upon the exercise of any options under the Share Option
Scheme). The Hong Kong Public Offer is managed by the Sole Overall Coordinator and the Sole
Global Coordinator (for itself and on behalf of the Hong Kong Underwriters) and is fully
underwritten by the Hong Kong Underwriters.
The Hong Kong Public Offer is open to all members of the public in Hong Kong. An
a p p l i c a n tf o rt h eH o n gK o n gP u b l i cO f f e rS h a r e sw i l lb er e q u i r e dt og i v ea nu n d e r t a k i n ga n d
confirmation in the application that he/she/it ha s not taken up and will not indicate an interest to
take up any International Placing Shares nor has otherwise participated in the International
Placing. Applicants should note that if such undertaking and/or confirmation given by the
applicant is breached and/or is untrue (as the case may be), such applicant ’s application under
t h eH o n gK o n gP u b l i cO f f e ri sl i a b l et ob er e j e c t e d .T h eH o n gK o n gP u b l i cO f f e rw i l lb es u b j e c t
to the conditions stated above under the paragraph headed ‘‘Conditions of the Global Offering ’’
in this section.
The total number of Hong Kong Public Offer Shares to be allotted and issued may change
as a result of the reallocation as mentioned below.
Basis of allocation of the Hong Kong Public Offer Shares
Allocation of the Hong Kong Public Offer Shares to applicants under the Hong Kong Public
Offer will be based solely on the level of valid applications received under the Hong Kong Public
Offer. The allocation of the Hong Kong Public Offer Shares could, where appropriate, consist 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 Public Offer Shares and those applicants
who are not successful in the ballot may not receive any Hong Kong Public Offer Shares.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 405 –


--- page 415 ---
Multiple or suspected multiple applications under the Hong Kong Public Offer and any
application for more than 8,000,000 Hong Kong Public Offer Shares, being 50% of the Hong
Kong Public Offer Shares initially available for subscription, will be rejected. Each applicant
under the Hong Kong Public Offer will also 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 have not received any Shares under the International Placing, and such applicant ’s
application is liable to be rejected if the said undertaking and/or confirmation is breached and/or
untrue (as the case may be).
For allocation purposes only, the Hong Kong Public Offer Shares being offered for
subscription under the Hong Kong Public Offer (after taking into account any adjustment in the
number of the Offer Shares allocated between the Hong Kong Public Offer and the International
Placing) will be divided equally into two pools (subject to adjustment of odd board lot size): pool
A and pool B.
Pool A will comprise 8,000,000 Hong Kong Public Offer Shares and pool B will comprise
8,000,000 Hong Kong Public Offer Shares initially, both of which are allocated by the Sole
Overall Coordinator and the Sole Global Coordinator (for itself and on behlf of the other Hong
Kong Underwriters) on an equitable basis to successful applicants. All valid applications that
have been received for the Hong Kong Public Offer Shares with an aggregate subscription price
(excluding brokerage of 1%, the SFC transaction levy of 0.0027%, the Stock Exchange trading
fee of 0.00565% and AFRC transaction levy of 0.00015%) of HK$5 million or below will fall into
pool A and all valid applications that have been received for the Hong Kong Public Offer Shares
with an aggregate subscription price (excluding brokerage of 1%, the SFC transaction levy of
0.0027%, the Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%)
of over HK$5 million and up to the total value of pool B will fall into pool B.
Applicants should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Public Offer Shares in one (but not both) of
the pools are undersubscribed, the surplus Hong Kong Public Offer Shares will be transferred to
the other pool to satisfy demand in that other pool and be allocated accordingly. Applicants can
only apply for Hong Kong Public Offer Shares from either pool A or pool B but not from both
pools and can only receive Hong Kong Public Offer Shares from either pool A or pool B but not
from both pools. Multiple or suspected multiple applications within either pool or between pools
will be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offer and the International
Placing is subject to reallocation. Paragraph 4.2 of the Practice Note 18 of the Listing Rules
requires a clawback mechanism to be put in place which would have the effect of increasing the
number of Hong Kong Public Offer Shares to a certain percentage of the total number of Offer
Shares initially offered under the Global Offering if the Internati onal Placing is fully subscribed or
oversubscribed and the certain prescribed total demand levels are reached under the Hong
Kong Public Offer as further described below.
If the Offer Shares under the International Placing are fully subscribed or oversubscribed
and
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 406 –


--- page 416 ---
 if the number of Offer Shares validly applied for under the Hong Kong Public Offer
represents 15 times or more but less than 50 times the number of Hong Kong Public
Offer Shares initially available for subscription under the Hong Kong Public Offer, then
up to 32,000,000 Offer Shares will be reallocated to the Hong Kong Public Offer from
the International Placing, so that the total number of Shares available for subscription
under the Hong Kong Public Offer will increase to 48,000,000 Shares, representing
30% of the total number of the Offer Shares available under the Global Offering
(assuming the Over-allotment Option is not exercised and without taking into account
any Shares which may be issued upon exercise of any options under the Share
Option Scheme);
 if the number of Offer Shares validly applied for under the Hong Kong Public Offer
represents 50 times or more but less than 100 times the number of Hong Kong Public
Offer Shares initially available for subscription under the Hong Kong Public Offer, then
up to 48,000,000 Offer Shares will be reallocated to the Hong Kong Public Offer from
the International Placing, so that the total number of Shares available for subscription
under the Hong Kong Public Offer will increase to 64,000,000 Shares, representing
40% of total number of the Offer Shares available under the Global Offering
(assuming the Over-allotment Option is not exercised and without taking into account
any Shares which may be issued upon exercise of any options under the Share
Option Scheme); and
 if the number of Offer Shares validly applied for under the Hong Kong Public Offer
represents 100 times or more the number of Hong Kong Public Offer Shares initially
available for subscription under the Hong Kong Public Offer, then up to 64,000,000
Offer Shares will be reallocated to the Hong Kong Public Offer from the International
Placing, so that the total number of Shares available for subscription under the Hong
Kong Public Offer will increase to 80,000,000 Shares, representing 50% of the total
number of the Offer Shares available under the Global Offering (assuming the Over-
allotment Option is not exercised and without taking into account any Shares which
may be issued upon exercise of any options under the Share Option Scheme).
In all cases, the number of Offer Shares allocated to the International Placing will be
correspondingly reduced. In addition, the Sole Overall Coordinator and the Sole Global
Coordinator (for itself and on behalf of other Underwrites) may in its sole and absolute
discretion reallocate Offer Sha res of the International Placing to the Hong Kong Public Offer to
satisfy valid applications under the Hong Kong Public Offer. The Offer Shares to be offered in
the Hong Kong Public Offer and the International Placing may, in certain circumstances, be
reallocated as between these offerings at the sole and absolute discretion of the Sole Overall
Coordinator and the Sole Global Coordinator.
In addition, if the Hong Kong Public Offer Shares are undersubscribed, the Sole Overall
Coordinator and the Sole Global Coordinator (for itself and on behalf of the Underwriters) have
the authority to reallocate all or any of the unsubscribed Hong Kong Public Offer Shares to the
International Placing.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 407 –


--- page 417 ---
With reference to Chapter 4.14 of the Guide for New Listing Applicants published by the
Stock Exchange effective from 1 January 2024, if (i) the Offer Shares under the International
Placing are fully subscribed or oversubscribed, and if the number of Offer Shares under the
Hong Kong Public Offer validly applied for represents 100% or more, but less than 15 times, of
the number of Offer Shares under the Hong Kong Public Offer initially available; or (ii) the Offer
Shares under the International Placing are not fully subscribed, and if the number of Offer
Shares under the Hong Kong Public Offer validly applied for represents 100% or more of the
number of Offer Shares initially available under the Hong Kong Public Offer irrespective of the
number of times, the Sole Overall Coordinator and the Sole Global Coordinator (for itself and on
behalf of the Underwriters) may, at its sole and absolute discretion, reallocate the Offer Shares
initially allocated for the International Plac ing to the Hong Kong Public Offer to satisfy valid
applications under the Hong Kong Public Offer, provided that the total number of Offer Shares
under the Hong Kong Public Offer available shall be increased to not more than 32,000,000
Shares, representing double the number of Offer Shares under the Hong Kong Public Offer
initially available under the Hong Kong Public Offer and 20% of the total number of Offer Shares
initially available under the Global Offering.
In the case of paragraphs (i) or (ii) above or where the International Placing Shares are
undersubscribed, the Offer Price shall be fixed at HK$1.13 per Offer Share (being the bottom
end of the indicative Offer Price range stated in this prospectus).
Details of any reallocation of Offer Shares between the Hong Kong Public Offer and the
International Placing will be disclosed in the results announcement of the Global Offering, which
is expected to be published on Tuesday, 2 July 2024.
THE INTERNATIONAL PLACING
The Company is initially offering 144,000,000 Offer Shares at the Offer Price for
subscription by way of the International Placing, representing 90% of the total number of the
Offer Shares being initially offered in the Global O ffering, subject to reallocation and the Over-
allotment Option as mentioned below. Subject to reallocation of Offer Shares between the Hong
Kong Public Offer and the International Placing, the International Placing Shares will represent
22.5% of the total Shares in issue of the Compan y immediately following completion of the
Capitalisation Issue and the Global Offering ( assuming the Over-allotment Option is not
exercised and without taking into account any Shares which may be granted upon exercise of
any option under the Share Option Scheme). It is expected that the International Underwriters or
any selling agents which they nominate will, on behalf of the Company, conditionally place the
International Placing Shares at the Offer Pr ice outside the United States in reliance on
Regulation S with selected professional, institutional and other investors. The International
Placing is subject to the Hong Kong Public Offer being unconditional.
The International Placing is expected to be fully underwritten by the International
Underwriters on a several basis upon and s ubject to the terms and conditions of the
International Underwriting Agreement.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 408 –


--- page 418 ---
Allocation
All decisions concerning the allocation of the International Placing Shares to prospective
placees pursuant to the International Placing will be made on the basis of, and by reference to,
a number of factors including the level and timing of demand, the total size of the relevant
investor ’s invested assets or equity assets in the relevant sector and whether or not the relevant
investor is expected or likely to purchase further Shares, or hold or sell the Shares, after the
Listing Date. Such allocation is intended to resu lt in a distribution of the International Placing
Shares on a basis which would lead to the establishment of a solid shareholder base for the
benefit of the Company. In addition, the Company, the Sole Overall Coordinator and the Sole
Global Coordinator will use their best endeavours to observe the minimum public float
requirement under the Listing Rules when making allocations of the International Placing
Shares to investors who are anticipated to have a sizeable demand for such Shares.
The Sole Overall Coordinator and the Sole Global Coordinator (for itself and on behalf of
the other Underwriters) may require any investors who have been offered Offer Shares under
the International Placing and who have made an application under the Hong Kong Public Offer,
to provide sufficient information to the Sole Overall Coordinator and the Sole Global Coordinator
(for itself and on behalf of the Underwriters) so as to allow it to identify the relevant applications
under the Hong Kong Public Offer and to ensure that these investors are excluded from any
application of Offer Shares under the Hong Kong Public Offer.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Placing may
change as a result of the clawback arrangement as described in the paragraph headed ‘‘The
Hong Kong Public Offer – Reallocation ’’in this section and/or the exercise of the Over-allotment
Option in whole or in part as described in the paragraph ‘‘Over-allotment Option ’’in this section.
In addition, the Sole Overall Coordinator and the Sole Global Coordinator may reallocate
International Placing Shares from the International Placing to the Hong Kong Public Offer to
satisfy the valid applications under the Hong Kong Public Offer that exceeds the number of
Hong Kong Public Offer Shares initially offered. The Offer Shares to be offered in the Hong
Kong Public Offer and the International Placing may, in certain circumstances, be reallocated as
between these offerings at the sole and absolute discretion of the Sole Overall Coordinator and
the Sole Global Coordinator (for itself and on behalf of the Underwriters).
OVER-ALLOTMENT OPTION
In connection with the Global Offering, th e Group expects to grant the Over-allotment
Option to the International Underwriters, exercisable by the Sole Overall Coordinator and the
Sole Global Coordinator (for itself and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters have the right,
exercisable by the Sole Overall Coordinator and the Sole Global Coordinator (for itself and on
behalf of the other International Underwriters) at any time from the Listing Date until 30 days
after the last day for the lodging of applications under the Hong Kong Public Offer, to require the
Company to issue and allot up to an aggregate of 24,000,000 additional Offer Shares
(representing 15% of the Offer Shares initially available under the Global Offering), at the Offer
Price under the International Placing to, among other things (such as effecting the permitted
stabilising actions as set o ut in the paragraph headed ‘‘Stabilisation ’’in this section), cover over-
allocations in the International Placing, if any.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 409 –


--- page 419 ---
If the Over-allotment Option is exercised in full, the additional Offer Shares will represent
approximately 3.61% of the total enlarged share capital of the Company immediately following
the completion of the Global Offering and the exercise of the Over-allotment Option (without
taking into account any Shares which may be allotted and issued upon exercise of any options
which may be granted under the Share Option Sc heme). In the event that the Over-allotment
Option is exercised, an announcement will be made.
STOCK BORROWING AGREEMENT
In order to facilitate the settlement of over-allocations in connection with the International
Placing, the Stabilising Manager or any person a cting for it may choose to borrow Shares from
GT & Yangtze under the Stock Borrowing Agreement, or acquire Shares from other sources,
including the exercising of the Over-allotment Option. The Stock Borrowing Agreement will not
be subject to the restrictions of Rule 10.07(1)(a) of the Listing Rules provided that the
requirements set out in Rule 10.07(3) of the Listing Rules are to be complied with as follows:
(i) such stock borrowing arrangement with GT & Yangtze will only be effected by the
Stabilising Manager for settlement of over-allocations in the International Placing and
covering any short position prior to the exercise of the Over-allotment Option;
(ii) the maximum number of Shares to be borrowed from GT & Yangtze under the Stock
Borrowing Agreement will be limited to the maximum number of Shares which may be
issued upon exercise of the Over-allotment Option;
(iii) the same number of Shares so borrowed must be returned to GT & Yangtze or its
nominees on or before the third business day following the earlier of (a) the last day
on which the Over-allotment Option may be exercised or (b) the day on which the
Over- allotment Option is exercised in full or (c) such other day as may be agreed in
writing between the Stabilising Manager and GT & Yangtze;
(iv) the stock borrowing arrangement under the Stock Borrowing Agreement will be
effected in compliance with all applicable laws, listing rules and regulatory
requirements; and
(v) no payment will be made to GT & Yangtze by the Stabilising Manag er or its authorised
agents in relation to such stock borrowing arrangement.
STABILISATION
Stabilisation is a practice used by underwriters in some markets to facilitate the distribution
of securities. T o stabilise, underwriters may bid for, or purchase, the newly issued securities in
the secondary market, during a specified period of time, to minimise and, if possible, prevent
any decline in the market price of the securities below the Offer Price. In Hong Kong and certain
other jurisdictions, activity aimed at reducing the market price is prohibited, and the price at
which stabilisation is effected is not permitted to exceed the offer price.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 410 –


--- page 420 ---
In connection with the Global Offering, the St abilising Manager, or any person acting for it,
on behalf of the Underwriters, may, to the extent permitted by applicable laws of Hong Kong or
elsewhere, over-allocate or effect any other transactions with a view to stabilising or maintaining
the market price of the Offer Shares at a level higher than that which might otherwise prevail in
the open market for a limited period after the Listing Date. Any market purchases of Shares will
be effected in compliance with all applicable laws and regulatory requirements. However, there
is no obligation on the Stabilising Manager or any person acting for it to conduct any such
stabilising activity, which if commenced, will be do ne at the absolute discretion of the Stabilising
Manager and may be discontinued at any time. Any such stabilising activity is required to be
brought to an end within 30 days of the last day for the lodging of applications under the Hong
Kong Public Offer. The number of Offer Shares that may be over-allocated will not exceed the
number of Shares that may be sold under the Over-allotment Option, namely, 24,000,000 Offer
Shares, which is 15% of the number of Offer Shares initially available under the Global Offering.
Stabilising action will be entered into in accord ance with the laws, regulations, rules in
place in Hong Kong on stabilisation and stabilising action permitted in Hong Kong. The
stabilising action permitted in Hong Kong pursuant to the Sec urities and Futures (Price
Stabilising) Rules (Chapter 571W of the Laws of Hong Kong) includes: (i) over-allocation for the
purpose of preventing or minimising any reduction in the market price of the Shares; (ii) selling
or agreeing to sell the Shares so as to establish a short position in them for the purpose of
preventing or minimising any reduction in the m arket price of the Shares; (iii) purchasing or
subscribing for, or agreeing to purchase or subscribe for, the shares pursuant to the Over-
allotment Option in order to close out any posit ion established under (i) or (ii) above; (iv)
purchasing, or agreeing to purchase, any of the Shares for the sole purpose of preventing or
minimising any reduction in the market price of the Shares; (v) selling or agreeing to sell any
Shares in order to liquidate any position held as a result of those purchases; and (vi) offering or
attempting to do anything described in (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Shares should note that:
 the Stabilising Manager, or any person ac ting for it, may, in connection with the
stabilising action, maintain a long position in the Shares;
 there is no certainty regarding the extent to which and the time period for which the
Stabilising Manager, or any person acting for it, will maintain such a position;
 liquidation of any such long position by th e Stabilising Manager may have an adverse
impact on the market price of the Shares;
 no stabilising action can be taken to suppor t the price of the Shares for longer than
the stabilising period which will begin on the Listing Date, and is expected to expire
on the last day falling within 30 days after the last day for lodging applications under
the Hong Kong Public Offer. After this date, when no further stabilising action may be
taken, demand for the Shares, and therefore the price of the Shares, could fall;
 the price of the Shares cannot be assured to stay at or above the Offer Price either
during or after the stabilising period by taking any stabilising action; and
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 411 –


--- page 421 ---
 stabilising bids may be made or transactions effected in the course of the stabilising
action at any price at or below the Offer Pri ce, which means that s tabilising bids may
be made or transactions effected at a price below the price paid by applicants for, or
investors, in the Shares.
The Company will ensure or procure that a public announcement in compliance with the
Securities and Futures (Price Stabilising) Rules w ill be made within seven days of the expiration
of the stabilising period. Such stabilisatio n action, if commenced, may be effected in all
jurisdictions where it is permissible to do so, in each case in compliance wit h all applicable laws,
rules and regulatory requirements, including the S ecurities and Futures (Price Stabilising) Rules,
as amended, made under the SFO.
In connection with the Global Offering, the Sole Overall Coordinator and the Sole Global
Coordinator may over-allocate up to and not more than an aggregate of 24,000,000 additional
Shares and cover such over-allocations by exercising the Over-allotment Option, or by making
purchases in the secondary market at prices that do not exceed the Offer Price or through stock
borrowing arrangements or a combination of these means.
All stabilising actions will be taken in accordance with the laws, rules and regulation in
p l a c ei nH o n gK o n go ns t a b i l i s a t i o n .
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
The Company has applied to the Listing Committee for the listing of, and permission to
deal in, the Shares in issue and to be issued pursuant to the Global Offering (including any
Shares that may be issued under the Over-allotment Option and any Shares which may be
issued pursuant to the exercise of any option that may be granted under the Share Option
Scheme).
SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS. If the Listing Committee grants the listin g of, and permission to deal in, the Shares and
the Company complies with the stock admission requirements of HKSCC, the Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with
effect from the date of commencement of dealings in the Shares on the Stock Exchange or any
other date HKSCC may choose. 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 Global Offering becomes unconditional at or before 8:00 a.m. on
Wednesday, 3 July 2024, it is expected that dealings in the Shares on the Main Board will
commence at 9:00 a.m. (Hong Kong time) on Wednesday, 3 July 2024.
The Shares will be traded in board lots of 2,000 Shares each and are fully transferable.
The stock code of the Shares is 2545.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 412 –


--- page 422 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
The Company has adopted a fully electronic application process for the Hong
Kong Public Offer and we will not provide printed copies of this prospectus to the
public in relation to the Hong Kong Public Offer. Set out below are the procedures
through which you can apply for the Hong Kong Public Offer Shares electronically. We
will not provide any physical channels to accept any application for the Hong Kong
Public Offer Shares by the public.
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 the Company ’s website at www.gantongjt.com.
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.
If you are an intermediary, broker or agent, please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses
above.
A. APPLICATION FOR HONG KONG PUBLIC OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Public Offer Shares if you or any person(s) for whose
benefit you are applying for:
 are 18 years of age or older;
 have a Hong Kong address (
for the HK eIPO White Form service );
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act); and
 are not a legal or natural person of the PRC (except those who have complied
with all relevant PRC laws and regulations in relation to such application,
including but not limited to qualified domestic institutional investors).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by
the Stock Exchange to us, you cannot apply for any Hong Kong Public Offer Shares if you
or the person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associate; or
 are a Director or any of his/her close associates.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
– 413 –


--- page 423 ---
2. Application Channels
The Hong Kong Public Offer period will begin at 9:00 a.m. on Friday, 21 June
2024 and end at 12:00 noon on Thursday, 27 June 2024 (Hong Kong time).
T o apply for Hong Kong Public Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service
IPO App (which can be
downloaded by searching ‘‘IPO
App ’’ in App Store or Google
Play or downloaded at
www.hkeipo.hk/IPOApp or
www.tricorglobal.com/
IPOApp )o r www.hkeipo.hk .
Applicants who would like to
receive a physical Share
certificate. Hong Kong Public
Offer Shares successfully
applied for will be allotted and
issued in your own name.
From 9:00 a.m. on Friday, 21
June 2024 to 11:30 a.m. on
Thursday, 27 June 2024,
Hong Kong time.
The latest time for completing full
payment of application monies
will be 12:00 noon on
Thursday, 27 June 2024,
Hong Kong time.
HKSCC EIPO channel Your broker or custodian who is a
HKSCC Participant will submit
a HKSCC EIPO application on
your behalf through HKSCC ’s
FINI system in accordance
with your instruction.
Applicants who would not like to
receive a physical Share
certificate. Hong Kong Public
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.
C o n t a c ty o u rb r o k e ro rc u s t o d i a n
for the earliest and latest time
for giving such instructions, as
t h i sm a yv a r yb yb r o k e ro r
custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait
until the last day of the application period to apply for Hong Kong Public Offer Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through
the HK eIPO White Form service to make an application for Hong Kong Public 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 ap plication instructions for the benefit of the
person for whom you are an agent and that you are duly authorised to give those
instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White
Form service more than once and obtaining different application reference numbers without
effecting full payment in respect of a particular reference number will not constitute an
actual application.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
– 414 –


--- page 424 ---
If you apply through the HK eIPO White Form service, you are deemed to have
authorised the HK eIPO White Form Service Provider to apply on the terms and conditions
in this prospectus, as supplemented and amended by the terms and conditions of the HK
eIPO White Form service.
By instructing your broker or custodian to apply for Hong Kong Public Offer Shares on
your behalf through the HKSCC EIPO Channel, you (and, if you are joint applicants, each
of you jointly and severally) are deemed to have instructed and authorised HKSCC to
cause HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to apply
for Hong Kong Public 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
t oH K S C C( i nw h i c hc a s ea na p p l i c a t i o nw i l lb em a d eb yH K S C CN o m i n e e so ny o u rb e h a l f )
provided such application instruction has not been withdrawn or otherwise invalidated
before the closing time of th eH o n gK o n gP u b l i cO f f e r .
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 Public 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/Joint Applicants For Corporate Applicants
 Full name(s)
2 as shown on your
identity document
 Full name(s) 2 as shown on your
identity document
 Identity document ’s issuing country
or jurisdiction
 Identity document ’s issuing country
or jurisdiction
 Identity document type, with order of
priority:
 Identity document type, with order of
priority:
i. HKID card; or i. LEI registration document; or
ii. National identification
document; or
ii. Certificate of incorporation; or
iii. Passport; and iii. B u s i n e s s r e g i s t r a t i o n
certificate; or
 Identity document number iv. Other equivalent document;
and
 Identity document number
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
– 415 –


--- page 425 ---
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid e-
mail address, a contact telephone number and a Hong Kong address. You are also required to
declare that the identity information provided by you follows the requirements as described in Note 2
below. In particular, where you cannot provide a HKID number, you must confirm that you do not hold
a HKID card. The number of joint applicants may not e x c e e df o u r .I fy o ua r eaf i r m ,t h ea p p l i c a n tm u s t
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 fo llowed and where an individual applicant has a
valid HKID card, the HKID number must be used when making an application to subscribe for Hong
Kong Public Offer Shares in the Hong Kong 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 applicants on FINI is capped at 4 in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document ’s issuing country or jurisdiction, the identity document type; and (ii)
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing
in securities; and (ii) you exercise statutory control over that company, then the application will be
treated as being for your benefit and you should provide the required information in your application
as stated above.
‘‘Unlisted company ’’ means a company with no equity securit ies 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, the Company and the Sole Overall Coordinator, as the Company ’s agent,
has discretion to consider whether to accept it on any conditions they think fit, including
evidence of the attorney ’sa u t h o r i t y .
Failing to provide any required information may result in your application being
rejected.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 426 ---
4. Permitted Number of Hong Kong Public Offer Shares for Application
Board lot size : 2,000 Hong Kong Public Offer Shares for one
board lot.
Permitted number of
Hong Kong Public Offer
Shares for application
and amount payable on
application/successful
allotment
: The maximum Offer Price is HK$1.25 per Offer
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 Public Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
s e v e r a l l y )a r ed e e m e dt oh a v ei n s t r u c t e da n d
authorised HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange p ayment of the final Offer
Price, brokerage, SFC transaction levy, AFRC
transaction levy and the S tock Exchange trading
fee by debiting the relevant nominee bank account
at the Designated Bank for your broker or
custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of Shares you
have selected. You must pay the respective
maximum amount payable on application in full
upon application for Hong Kong Public Offer
Shares.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
– 417 –


--- page 427 ---
No. of Hong Kong
Public Offer
Shares applied
for
Maximum Amount
payable (2) on
application/
successful
allotment
No. of Hong Kong
Public Offer
Shares applied
for
Maximum Amount
payable (2) on
application/
successful
allotment
No. of Hong Kong
Public Offer
Shares applied
for
Maximum Amount
payable (2) on
application/
successful
allotment
No. of Hong Kong
Public Offer
Shares applied
for
Maximum Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
2,000 2,525.21 40,000 50,504.26 600,000 757,563.76 3,300,000 4,166,600.63
4,000 5,050.43 50,000 63,130.31 700,000 883,824.38 3,600,000 4,545,382.50
6,000 7,575.63 60,000 75,756.38 800,000 1,010,085.00 3,900,000 4,924,164.38
8,000 10,100.86 70,000 88,382.43 900,000 1,136,345.63 4,500,000 5,681,728.13
10,000 12,626.07 80,000 101,008.50 1,200,000 1,515,127.50 5,100,000 6,439,291.88
12,000 15,151.28 90,000 113,634.57 1,500,000 1,893,909.38 5,700,000 7,196,855.63
14,000 17,676.49 100,000 126,260.63 1,800,000 2,272,691.26 6,300,000 7,954,419.38
16,000 20,201.70 200,000 252,521.26 2,100,000 2,651,473.13 7,000,000 8,838,243.76
18,000 22,726.91 300,000 378,781.88 2,400,000 3,030,255.00 8,000,000
(1) 10,100,850.00
20,000 25,252.13 400,000 505,042.50 2,700,000 3,409,036.88
30,000 37,878.19 500,000 631,303.13 3,000,000 3,787,818.76
(1) Maximum number of the Hong Kong Public Offer Shares you may apply for and this is 50% of the
Hong Kong Public Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the AFRC transaction levy and
the Stock Exchange trading fee. If your applicat ion is successful, brokerage will be paid to the
Exchange Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service
Provider (for applications made th rough the application channel of the HK eIPO White Form Service
Provider) while the SFC transaction levy, the 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).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying
investor in your application as required under the paragraph headed ‘‘A. Applications for
Hong Kong Public Offer Shares – 3. Information Required to Apply ’’ in this section. If you
are suspected of submitting or cause to submit more than one application, all of your
applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be
rejected. If you have made an application through the HK eIPO White Form service or
HKSCC EIPO channel, you or any person(s) for whose benefit you have made the
application shall not apply further for any Offer Shares in the Global Offering.
The Hong Kong Share Registrar would reco rd all applications into its system and
identify suspected multiple applications with identical names and identification document
numbers according to the Best Practice Note on Treatment of Multiple / Suspected Multiple
Applications ( ‘‘Best Practice Note ’’) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
– 418 –


--- page 428 ---
6. Terms and Conditions of An Application
By applying for Hong Kong Public Offer Shares through the HK eIPO White Form
service or HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do
the following things on your behalf):
(a) undertake to execute all relevant documents and instruct and authorise the
Company to execute any documents for you and to do on your behalf all things
necessary to register any Hong Kong Public 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 Public Offer Shares directly into CCASS for the
credit of your designated HKSCC Participant ’s stock account on your behalf;
(b) confirm that you have read and understand the terms and conditions and
application procedures set out in this prospectus, in the IPO App a n do nt h e
designated website under the HK eIPO White Form service (or as the case may
be, the agreement you entered into with your broker or custodian), and agree to
be bound by them;
(c) (if you are applying through the HKSCC EIPO channel) agree to the
arrangements, undertakings and warranties under the participant agreement
between your broker or custodian and HKSCC and observe the General Rules of
HKSCC and the HKSCC Operational Procedures for giving application
instructions to apply for Hong Kong Public Offer Shares;
(d) confirm that you are aware of the restrictions on the Global Offering as set out in
this prospectus and they do not apply to you, or any person(s) for whose benefit
you have made the application;
(e) confirm that you have read this prospectus and any supplement to it and have
relied only on the information and representations contained therein in making
your application (or as the case may be, causing your application to be made)
and will not rely on any other information or representations;
(f) agree that the Company, the Sole Sponsor, the Sole Overall Coordinator, the
Sole Global Coordinator, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, any of their or the Company ’s respective directors, officers,
employees, partners, agents, advisers and any other parties involved in the
Global Offering (the ‘‘Relevant Persons ’’), the Hong Kong Share Registrar and
HKSCC will not be liable for any information and representations not in this
prospectus and any supplement to it;
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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(g) agree to disclose the details of your application and your personal data and any
other personal data which may be required about you and any person(s) for
whose benefit you have made the application to the Company, the Relevant
Persons, the Hong Kong Share Registrar, HKSCC, HKSCC Nominees, the Stock
Exchange, the SFC and any other statutory regulatory or governmental bodies or
otherwise as required by laws, rules or regulations, for the purposes under the
paragraph headed ‘‘G – Personal Data – 3. Purposes and 4. Transfer of personal
data ’’in this section;
(h) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees ’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(i) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the Hong Kong Share
Registrar by way of publication of the results at the time and in the manner as
specified in the paragraph headed ‘‘B. Publication of Results ’’in this section;
(j) confirm that you are aware of the situations specified in the paragraph headed
‘‘C. Circumstances In Which You Will Not Be Allocated Hong Kong Public Offer
Shares ’’in this section;
(k) agree that your application or HKSCC Nominees ’ application, any acceptance of
it and the resulting contract will be governed by and construed in accordance
with the laws of Hong Kong;
(l) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither the
Company 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;
(m) confirm that (a) your application or HKSCC Nominees ’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) o r existing shareholder(s) of the Company
or any of our subsidiaries or any of their respective close associates; and (b) you
are not accustomed or will not be accustomed to taking instructions from the
Company, any of the directors, chief executives, substantial Shareholder(s) or
existing shareholder(s) of the Company or any of our subsidiaries or any of their
respective close associates in relation to the acquisition, disposal, voting or other
disposition of the Shares registered in your name or otherwise held by you;
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 430 ---
(n) warrant that the information you h ave provided is true and accurate;
(o) confirm that you understand that the Company, the Directors, the Sole Sponsor,
the Sole Overall Coordinator, the Sole Global Coordinator, the Joint Bookrunners
and the Joint Lead Managers will rely on your declarations and representations
in deciding whether or not to allocate any Hong Kong Public Offer Shares to you
and that you may be prosecuted for making a false declaration;
(p) agree to accept Hong Kong Public Offer Shares applied for or any lesser number
allocated to you under the application;
(q) declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for whose
benefit you are applying;
(r) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the HK eIPO White Form
service or by any one as your agent or by any other person; and
(s) (if you are making the application as an agent for the benefit of another person)
warrant that (i) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as
agent for that person by giving electronic application instructions to HKSCC
or the HK eIPO White Form S e r v i c eP r o v i d e r ;a n d( i i )y o uh a v ed u ea u t h o r i t yt o
give electronic application instructions on behalf of that other person as its
agent.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 431 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Public Offer
Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel :
Website From the ‘‘IPO Results ’’function in the
IPO App or at www.hkeipo.hk/
IPOResult or www.tricor.com.hk/ipo/
result with a ‘‘search by ID ’’function
24 hours, from 11:00 p.m.
on Tuesday, 2 July
2024 to 12:00 midnight
on Monday, 8 July 2024
(Hong Kong time)
The full list of (i) wholly or partially
successful applicants using the HK
eIPO White Form service and HKSCC
EIPO channel, and (ii) the number of
Hong Kong Public Offer Shares
conditionally allo tted to them, among
other things, will be displayed at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result .
The Stock Exchange ’s website at
www.hkexnews.hk and the Company ’s
website at www.ganto ngjt.com which
will provide links to the abovementioned
websites of the Hong Kong Share
Registrar.
No later than 11:00 p.m.
on Tuesday, 2 July
2024 (Hong Kong time)
T elephone +852 3691 8488 – the allocation results
telephone enquiry line provided by the
Hong Kong Share Registrar.
B e t w e e n9 : 0 0a . m .a n d
6:00 p.m. from
Wednesday, 3 July
2024 to Monday, 8 July
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 Friday, 28 June 2024 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m.
on Friday, 28 June 2024 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 432 ---
Allotment Announcement
The Company expect to announce the results of the final Offer Price, the level of
indications of interest in the International Placing, the level of applications in the Hong
Kong Public Offer and the basis of allocations of Hong Kong Pubic Offer Shares on the
Stock Exchange ’sw e b s i t ea t www.hkexnews.hk and our website at www.gantongjt.com
by no later than 11:00 p.m. on Tuesday, 2 July 2024 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG PUBLIC
OFFER SHARES
You should note the following situations in which Hong Kong Public 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 the Company or the Company ’s agents exercise their discretion to reject your
application:
The Company, the Sole Overall Coordinator, the Hong Kong 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 Public Offer Shares is void:
The allocation of Hong Kong Public Offer Shares will be void if the Stock Exchange
does not grant permission to list the Shares either:
 within three weeks from the closing date of the Application Lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the Application Lists.
4. If:
 you make multiple applications or suspected multiple applications. You may refer
to the paragraph headed ‘‘A. Applications for Hong Kong Public Offer Shares – 5.
Multiple Applications Prohibited ’’ in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 433 ---
 your payment (or confirmation of funds, as the case may be) is not made
correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 the Company or the Sole Overall Coordinator believe that by accepting your
application, it or they would violate applicable securities or other laws, rules or
regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Public Offer Shares, the
receiving bank will collect the portion of these funds required to settle each HKSCC
Participant ’s actual Hong Kong Public Offer Shares allotment from their Designated Bank.
T h e r ei sar i s ko fm o n e ys e t t l e m e n tf a i l u r e . 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 re ctify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the
affected Hong Kong Public Offer Shares will be reallocated to the International Placing.
Hong Kong Public 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 Public Offer Shares due to the money settlement failure by such
HKSCC Participant. None of the Company, the Relevant Persons, the Hong Kong Share
Registrar and HKSCC is or will be liable if Hong Kong Public Offer Shares are not allocated
to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF APPLICATION
MONIES
You will receive one Share certificate for all Hong Kong Public Offer Shares allotted to you
under the Hong Kong Public Offer (except pursuant to applications made through the HKSCC
EIPO channel where the Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the Shares. No receipt will be
issued for sums paid on application.
Share certificates will only become valid at 8:00 a.m. on Wednesday, 3 July 2024 (Hong
Kong time), provided that the Global Offering has become unconditional in all respect at or
before that time and the right of termi nation described in the section headed ‘‘Underwriting –
Underwriting arrangements and expenses – Hong Kong Public Offer – Grounds for termination ’’
has not been exercised. Investors who trade Shares prior to the receipt of Share certificates or
the Share certificates becoming valid do so entirely at their own risk.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 434 ---
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of Share Certificate 1
For application of
1,000,000 Hong
Kong Public
Offer Shares or
more
Collection in person from the
Hong Kong Share Registrar,
Tricor Investor Services
Limited at 17th Floor, Far East
Finance Centre, 16 Harcourt
Road, Wanchai, Hong Kong.
Share certificate(s) will be
issued in the name of HKSCC
Nominees, deposited into
CCASS and credited to your
designated HKSCC
Participant ’s stock account.
No action by you is required.
Time: from 9:00 a.m. to 1:00
p.m. on Wednesday, 3 July
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
authorisation from your
corporation stamped with your
corporation ’s chop.
Both individuals and
authorised representatives
must produce, at the time of
collection, evidence of identity
acceptable to the Hong Kong
Share Registrar.
Note: I fy o ud on o tc o l l e c t
your Share certificate(s)
personally within the time
above, it/they will be sent to
the address specified in your
application instructions by
ordinary post at your own risk.
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--- page 435 ---
HK eIPO White Form service HKSCC EIPO channel
For application of
less than
1,000,000 Hong
Kong Public
Offer Shares
Your Share certificate(s) will
be sent to the address
specified in your application
instructions by ordinary post
at your own risk.
Date: Tuesday, 2 July 2024
Refund mechanism for surplus application monies paid by you
Date Wednesday, 3 July 2024 Subject to the arrangement
between you and your broker
or custodian
Responsible party Hong Kong Share Registrar Your broker or custodian
Application
monies paid
through single
bank account
HK eIPO White Form e-Auto
Refund payment instructions
to your designated bank
account.
Your broker or custodian will
arrange refund to your
Designated Bank account
subject to the arrangement
between you and it.
Application
monies paid
through multiple
bank accounts
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk.
Note:
1. Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning
and/or an ‘‘Extreme Conditions ’’announcement issued after a super typhoon in force in Hong Kong in
the morning on Tuesday, 2 July 2024 rendering it impossible for the relevant Share certificates to be
despatched to HKSCC in a timely manner, the Company shall procure the Hong Kong Share Registrar
to arrange delivery of the supporting documents a nd Share certificates in accordance with the
contingency arrangement as agreed between them. For further details, please refer to the paragraph
headed ‘‘E. Severe Weather Arrangements ’’in this section.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 436 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The Application Lists will not open or close on Thursday, 27 June 2024 if, there is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions ,
(collectively, the ‘‘Severe Weath er Signals ’’),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, 27 June
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 the section headed ‘‘Expected Timetable ’’ in this prospectus, an
announcement will be made and published on the Stock Exchange ’s website at
www.hkexnews.hk and our website at www.gantongjt.com of the revised timetable.
If a Severe Weather Signal is hoisted on the business day before Listing (i.e.
Tuesday, 2 July 2024), the Hong Kong Share Registrar will make appropriate arrangements
for the delivery of the Share certificates to the CCASS Depository ’s service counter so that
they would be available for trading on the Listing Date (i.e. Wednesday, 3 July 2024).
If a Severe Weather Signal is hoisted on Tuesday, 2 July 2024, for application of less
than 1,000,000 Hong Kong Public Offer Shares, the despatch of physical Share
certificate(s) will be made by ordinary post when the post office re-opens after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Tuesday, 2 July 2024 or on
Wednesday, 3 July 2024).
If a Severe Weather Signal is hoisted on Wednesday, 3 July 2024, for application of
1,000,000 Hong Kong Public Offer Shares or more, physical Share certificate(s) will be
available for collection in person at the Hong Kong Share Registrar ’s office after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Wednesday, 3 July 2024 or
on Thursday, 4 July 2024).
Prospective investors should be aware that if they choose to receive physical
Share certificates issued in their name, t here may be a delay in receiving the Share
certificates.
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--- page 437 ---
F . ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and the Company complies with the stock admission requirements of HKSCC,
the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the Shares or
any other date HKSCC chooses. Settlement of transactions between Exchange Participants is
required to take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the Hong Kong Share Registrar, the receiving bank(s) 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 State ment informs the applicant for, and holder
of, Hong Kong Public Offer Shares, of the policies and practices of the Company and the
Hong Kong 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 Public Offer
Shares to ensure that personal data supplied to the Company or its agents and the Hong
Kong Share Registrar is accurate and up-to-date when applying for the Hong Kong Public
Offer Shares or transferring the Hong Kong Public Offer Shares into or out of their names
or in procuring the services of the Hong Kong Share Registrar.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 438 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Public Offer Shares being rejected, or in the delay or the
inability of the Company or the Hong Kong Share Registrar to effect transfers or otherwise
render their services. It may also prevent or delay registration or transfers of Hong Kong
Public Offer Shares which you have successfully applied for and/or the despatch of Share
certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Public Offer Shares inform
the Company and the Hong Kong Share Registrar immediately of any inaccuracies in the
personal data supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means)
for the following purposes:
 processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification of compliance with
the terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Public Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Publ ic Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends,
rights issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to fa cilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to
enable the Company and the Hong Kong Share Registrar to discharge their
obligations to applicants and holders of the Shares and/or regulators and/or any
other purposes to which applicants and holders of the Shares may from time to
time agree.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 439 ---
4. Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar relating to
the applicants for and holders of Hong Kong Public Offer Shares will be kept confidential
but the Company and the Hong Kong Share Registrar may, to the extent necessary for
achieving any of the above purposes, disclose, obtain or transfer (whether within or outside
Hong Kong) the personal data to, from or with any of the following:
 the Company ’s appointed agents such as financial advisers, receiving bank(s)
and overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer
t h ep e r s o n a ld a t at ot h eH o n gK o n gS h a r eR e g i s t r a r ,i ne a c hc a s ef o rt h e
purposes of providing its services or fa cilities or performing its functions in
accordance with its rules or procedures and operating FINI and CCASS
(including where applicants for the Hong Kong Public Offer Shares request a
deposit into CCASS);
 any agents, contractors or third-party ser vice providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the
Hong Kong 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 sta tutory functions; and
 any persons or institutions with which the holders of Hong Kong Public Offer
Shares have or propose to have dealings, such as their bankers, solicitors,
accountants or brokers etc.
5. Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal data of the
applicants and holders of Hong Kong Public 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).
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 440 ---
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Public Offer Shares have the right to
ascertain whether the Company or the Hong Kong 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 Hong Kong 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 Hong Kong Share Registrar, at their
respective registered address disclosed in the section headed ‘‘Corporate Information ’’ in
this prospectus or as notified from time to time , for the attention of the company secretary
of the Company, or for the attention of the privacy compliance officer of the Hong Kong
Share Registrar.
HOW TO APPLY FOR THE HONG KONG PUBLIC OFFER SHARES
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--- page 441 ---
The following is the text of a report set out on pages I – 1t oI – 71, received from the
Company ’s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS ’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF ZHONGGAN COMMUNICATION (GROUP) HOLDINGS LIMITED AND
ZHONGTAI INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of Zhonggan Communication (Group)
Holdings Limited (the ‘‘Company ’’) and its subsidiaries (together, the ‘‘Group ’’) set out on pages
I – 3t oI – 71, which comprises the consolidated statements of financial position of the Group as
at 31 December 2021, 2022 and 2023, the statements of financial position of the Company as at
31 December 2022 and 2023, the consolidat ed statements of profit or loss and other
comprehensive income, the consolidated statements of changes in equity and the consolidated
cash flow statements, for each of the years ended 31 December 2021, 2022 and 2023 (the
‘‘Track Record Period ’’), and a summary of material accounting policy information and other
explanatory information (together, the ‘‘Historical Financ ial Information ’’). The Historical
Financial Information set out on pages I – 3t oI – 71 forms an integral part of this report, which
has been prepared for inclusion in the prospectus of the Company dated 21 June 2024 (the
‘‘Prospectus ’’) in connection with the initial listing of shares of the Company on the Main Board
of The Stock Exchange of Hong Kong Limited.
Directors ’ responsibility for Historical Financial Information
The directors of the Company are responsible for the preparation of Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation and
presentation set out in note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free fr om material misstatement, whether due to fraud or
error.
Reporting accountants ’ responsibility
Our responsibility is to express an opinion on t he Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 ‘‘Accountants ’ Reports on Historical Financial
Information in Investment Circulars ’’ issued by the Hong Kong Institute of Certified Public
Accountants ( ‘‘HKICPA’’). This standard requires that we comply with ethical standards and plan
and perform our work to obtain reasonable assurance about whether the Historical Financial
Information is free from material misstatement.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 1


--- page 442 ---
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 Info rmation, whether due to fraud or error. In making those risk
assessments, the reporting accountants consi der internal control relevant to the entity ’s
preparation of Historical Financial Information that gives a true and fair view in accordance with
the basis of preparation and presentation set out in note 1 to the Historical Financial Information
in order to design procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity ’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the
Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants ’ report, a true and fair view of the Company ’s financial position as at 31 December
2022 and 2023, the Group ’s financial position as at 31 December 2021, 2022 and 2023 and of
the Group ’s financial performance and cash flows for the Track Record Period in accordance
with the basis of preparation and presentation set out in note 1 to the Historical Financial
Information.
Report on matters under the Rules Governi ng the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Com panies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Informa tion, no adjustments to the Underlying Financial
Statements as defined on page I – 3 have been made.
Dividends
We refer to note 26(e) to the Historical Financial Information which states that no dividends
have been paid by the Company in respect of the Track Record Period.
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its
incorporation.
KPMG
Certified Public Accountants
8th Floor, Prince ’s Building
10 Chater Road
Central, Hong Kong
21 June 2024
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HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants ’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by KPMG Huazhen LLP Xiamen
Branch in accordance with Hong Kong Standards on Auditing issued by the HKICPA
(‘‘Underlying Financial Statements ’’).
The Historical Financial Information is presented in Renminbi ( ‘‘RMB’’) and all value are
rounded to the nearest thousand (RMB ’000) except when otherwise indicated.
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Consolidated statements of profit or loss and other comprehensive income
(Expressed in Renminbi ( ‘‘RMB’’))
Year ended 31 December
2021 2022 2023
Note RMB ’000 RMB ’000 RMB ’000
Revenue ....................................... 4 479,118 413,091 609,301
C o s to fs a l e s .................................... ( 3 8 7 , 9 3 0 ) ( 3 0 9 , 4 5 3 ) ( 4 5 9 , 9 8 2 )
Gross profit .................................... 91,188 103,638 149,319
O t h e rn e ti n c o m e................................. 5 5,850 4,750 5,018
S e l l i n ge x p e n s e s ................................. ( 5 , 0 8 0 ) ( 3 , 4 3 6 ) ( 3 , 2 9 8 )
A d m i n i s t r a t i v ee x p e n s e s ............................. ( 2 0 , 3 5 1 ) ( 3 3 , 0 0 0 ) ( 3 8 , 4 7 4 )
R e s e a r c ha n dd e v e l o p m e n te x p e n s e s.................... (19,208) (17,680) (25,873)
Profit from operations ............................. 5 2 , 3 9 9 5 4 , 2 7 2 8 6 , 6 9 2
F i n a n c ec o s t s ...................................
6(a) (11,480) (15,332) (16,682)
Profit before taxation .............................. 6 40,919 38,940 70,010
I n c o m et a x ..................................... 7(a) (4,746) (3,965) (1,339)
Profit for the year ................................ 3 6 , 1 7 3 3 4 , 9 7 5 6 8 , 6 7 1
Other comprehensive income for the year ............... –––
Total comprehensive income for the year ................ 3 6 , 1 7 3 3 4 , 9 7 5 6 8 , 6 7 1
Attributable to:
Equity shareholders of the Company. . . . . . . . . . . . . . . . . . . . . 36,173 34,473 68,592
N o n - c o n t r o l l i n gi n t e r e s t s ............................. – 502 79
Profit for the year ................................ 3 6 , 1 7 3 3 4 , 9 7 5 6 8 , 6 7 1
Earnings per share
B a s i ca n dd i l u t e d.................................
10 N/A N/A N/A
The accompanying notes form part of the Historical Financial Information.
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Consolidated statements of financial position
(Expressed in RMB)
As at 31 December
2021 2022 2023
Note RMB ’000 RMB ’000 RMB ’000
Non-current assets
P r o p e r t y ,p l a n ta n de q u i p m e n t ................. 11 21,623 21,845 34,003
I n v e s t m e n tp r o p e r t y ........................ 12 19,892 19,367 18,841
I n v e s t m e n t si na s s o c i a t e s .................... 13 –– 7,424
T r a d er e c e i v a b l e s......................... 16(a) 40,625 16,533 27,136
P r e p a y m e n tf o rp u r c h a s e so fp r o p e r t i e s ........... 17 7,096 13,956 –
D e f e r r e dt a xa s s e t s ........................ 25(b) 9,118 23,984 6,513
98,354 95,685 93,917
Current assets
I n v e n t o r i e sa n do t h e rc o n t r a c tc o s t s............. 14 20,295 20,195 11,240
C o n t r a c ta s s e t s .......................... 15(a) 513,462 539,645 726,829
T r a d ea n do t h e rr e c e i v a b l e s.................. 16(a) 219,753 304,969 244,601
O t h e rf i n a n c i a la s s e t s ...................... 6 9 3 4
P l e d g e db a n kd e p o s i t s ......................
18 5,281 5,366 3,193
C a s ha n dc a s he q u i v a l e n t s ................... 19 39,850 68,646 81,540
798,647 938,830 1,067,437
Current liabilities
T r a d ea n do t h e rp a y a b l e s .................... 20 443,540 437,551 677,514
Contract liabilities . . ....................... 15(b) 5,102 7,644 4,795
Lease liabilities . . . ....................... 21 111 45 145
B a n kb o r r o w i n g s .......................... 22 311,449 375,198 347,458
C u r r e n tt a x a t i o n.......................... 25(a) 9,195 24,903 1,258
769,397 845,341 1,031,170
Net current assets ........................ 29,250 93,489 36,267
Total assets less current liabilities ............. 127,604 189,174 130,184
Non-current liabilities
Lease liabilities . . . ....................... 21 – 13 129
D e f e r r e di n c o m e .......................... 23 1,941 1,887 1,833
Other non-current liabilities ................... 20 1,127 ––
3,068 1,900 1,962
NET ASSETS ............................ 1 2 4 , 5 3 6 1 8 7 , 2 7 4 1 2 8 , 2 2 2
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As at 31 December
2021 2022 2023
Note RMB ’000 RMB ’000 RMB ’000
CAPITAL AND RESERVES
S h a r ec a p i t a l ............................ 26(b) – 82 83
S h a r ep r e m i u m ........................... 26(c) – 12,119 12,112
R e s e r v e s .............................. 26(d) 124,536 173,055 116,027
Total equity attributable to equity shareholders of
the Company .......................... 1 2 4 , 5 3 6 1 8 5 , 2 5 6 1 2 8 , 2 2 2
Non-controlling interests . . ................... – 2,018 –
TOTAL EQUITY .......................... 1 2 4 , 5 3 6 1 8 7 , 2 7 4 1 2 8 , 2 2 2
The accompanying notes form part of the Historical Financial Information.
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Statements of financial position of the Company
(Expressed in RMB)
As at 31 December
2022 2023
Note RMB ’000 RMB ’000
Non-current assets
I n v e s t m e n ti nas u b s i d i a r y ................. * 1 2 , 1 1 9
Current assets
O t h e rr e c e i v a b l e s ........................
16(b) 12,545 84
Net current assets ...................... 12,545 84
Total assets less current liabilities .......... 12,545 12,203
NET ASSETS .......................... 1 2 , 5 4 5 1 2 , 2 0 3
CAPITAL AND RESERVES
S h a r ec a p i t a l........................... 26(b) 82 83
S h a r ep r e m i u m ......................... 26(c) 12,119 12,112
R e s e r v e s .............................. 26(d) 344 8
TOTAL EQUITY ......................... 1 2 , 5 4 5 1 2 , 2 0 3
* The balances represent amounts less than RMB1,000.
Note:
(i) Investment in a subsidiary represents the paid-in ca pital of Zhonggan Communication (BVI) Holding Co., Ltd.
(‘‘Zhonggan BVI ’’). Zhonggan BVI was incorporated on 24 May 2022 w ith issued capital of USD1.00. Subsequently
in 2023, the Company injected RMB12,119,000 to Zhonggan BVI, which increased the Company ’s investment in
the subsidiary.
The accompanying notes form part of the Historical Financial Information.
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Consolidated statements of changes in equity
(Expressed in RMB)
Attributable to equity shareholders of the Company
Note Share capital
Share
premium
Other
reserve
PRC
statutory
reserve
Accumulated
losses/
Retained
profits Total
Non-
controlling
interests Total equity
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Note 26(b) Note 26(c) Note 26(d)(i) Note 26(d)(ii)
Balance at 1 January 2021 –– 99,192 4,865 25,942 129,999 – 129,999
Changes in equity for the year ended
31 December 2021
Profit and total comprehensive income
for the year –––– 36,173 36,173 – 36,173
Share repurchase 26(d)(i) –– (37,130) (2,688) (1,818) (41,636) – (41,636)
Appropriation to PRC statutory reserves ––– 3,617 (3,617) –––
Balance at 31 December 2021 and
1 January 2022 –– 62,062 5,794 56,680 124,536 – 124,536
Balance at 1 January 2022 –– 62,062 5,794 56,680 124,536 – 124,536
Changes in equity for the year ended
31 December 2022
Profit and total comprehensive income
for the year –––– 34,473 34,473 502 34,975
Capital injection 26(d)(i) –– 27,681 –– 27,681 – 27,681
Arising from reorganisation 82 12,119 (13,635) –– (1,434) 1,516 82
Appropriation to PRC statutory reserves ––– 3,376 (3,376) –––
Balance at 31 December 2022 and
1 January 2023 82 12,119 76,108 9,170 87,777 185,256 2,018 187,274
Balance at 1 January 2023 ............. 82 12,119 76,108 9,170 87,777 185,256 2,018 187,274
Changes in equity for the year ended
31 December 2023
Profit and total comprehensive income
f o rt h ey e a r ..................... –––– 68,592 68,592 79 68,671
A r i s i n gf r o mr e o r g a n i s a t i o n.............. N o t e2 6 ( d ) ( i ) 1 ( 7 ) ( 7 6 , 1 0 8 ) – (49,512) (125,626) (2,097) (127,723)
A p p r o p r i a t i o nt oP R Cs t a t u t o r yr e s e r v e s...... ––– 6,933 (6,933) 128,197 ––
Balance at 31 December 2023 ........... 8 3 1 2 , 1 1 2 – 16,103 99,924 128,222 – 128,222
The accompanying notes form part of the Historical Financial Information.
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Consolidated cash flow statements
(Expressed in RMB)
Year ended 31 December
2021 2022 2023
Note RMB ’000 RMB ’000 RMB ’000
Operating activities
C a s hg e n e r a t e df r o m / ( u s e di n )o p e r a t i o n s ................. 19(b) (9,819) (33,564) 58,231
I n c o m et a xp a i d.................................. 25(a) (2,427) (3,123) (9,793)
Net cash generated from/(used in) operating activities ....... (12,246) (36,687) 48,438
Investing activities
Payment for the purchase of property, plant and equipment . . . . . . (7,606) (8,528) (863)
Proceeds from disposal of property, plant and equipment . . . . . . . 1 7 –
I n t e r e s tr e c e i v e d .................................. 1 1 2 1 1 9 1 8 0
Payment for purchase of other financial assets . . . . . . . . . . . . . . (4) (2) (23)
Net cash used in investing activities ................... (7,497) (8,404) (706)
Financing activities
C a p i t a le l e m e n to fl e a s er e n t a l sp a i d ....................
19(c) (384) (448) (172)
I n t e r e s te l e m e n to fl e a s er e n t a l sp a i d.................... 19(c) (8) (5) (15)
P r o c e e d sf r o mb a n kb o r r o w i n g s ........................ 19(c) 311,000 407,000 397,000
R e p a y m e n to fb a n kb o r r o w i n g s........................ 19(c) (205,000) (343,000) (425,000)
I n c r e a s ei np l e d g e db a n kd e p o s i t ....................... 18 (44) (31) (64)
I n t e r e s tp a i d .................................... 19(c) (13,177) (15,344) (16,400)
C a p i t a li n j e c t i o nf r o ms h a r e h o l d e r s ...................... 26(d)(i) – 27,681 12,119
Repurchase of shares of the companies now comprising the Group (41,636) ––
P a y m e n to fl i s t i n ge x p e n s e s.......................... ( 1 4 7 ) ( 1 , 9 6 6 ) ( 2 , 2 7 5 )
Net cash (used in)/generated from financing activities ....... 50,604 73,887 (34,807)
Net increase in cash and cash equivalents ............... 3 0 , 8 6 1 2 8 , 7 9 6 1 2 , 9 2 5
Cash and cash equivalents at 1 January ................ 19(a) 8,989 39,850 68,646
Effect of foreign exchange .......................... –– (31)
Cash and cash equivalents as at 31 December ............ 19(a) 39,850 68,646 81,540
The accompanying notes form part of the Historical Financial Information.
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Notes to the Historical Financial Information
(Expressed in RMB unless otherwise indicated)
1 Basis of preparation and presentation of Historical Financial Information
1.1 General information
Zhonggan Communication (Group) Holdings Limited (the ‘‘Company ’’)w a s
incorporated in the Cayman Islands on 20 April 2022 as an exempted company with
limited liability under the Cayman Islands Companies Act.
The Company is an investment holding company and has not carried on any business
since the date of its incorporation save for the group reorganisation mentioned below. The
Company and its subsidiaries (together, the ‘‘Group ’’) are principally engaged in the
provision of (i) telecommunicati ons infrastructure services which comprises infrastructure
construction services and maintenance services and (ii) digitalisation solution services for
the Group ’s customers (together, the ‘‘Listing Business ’’) in the People ’s Republic of China
(the ‘‘PRC’’).
1.2 Reorganisation and basis of presentation
Prior to the incorporation of the Company and completion of the group reorganisation
mentioned below, the Listing Business was carried out by Zhonggan Communication
Company Limited and its subsidiaries (together, ‘‘Zhonggan Communication ’’). T o
rationalise the corporate structure in preparation of the listing of the Company ’ss h a r e so n
The Stock Exchange of Hong Kong Limited, the Group underwent the group reorganisation,
as detailed in the section headed ‘‘History and Reorganisation ’’ in the Prospectus (the
‘‘Reorganisation ’’).
On 25 August 2022, the Company became the holding company of the companies
now comprising the Group.
The Reorganisation only involved inserting newly formed investment entities with no
substantive operations as holding companies of Zhonggan Communication, and there were
no changes in the economic substance of the ownership, business and operations of the
Group before and after the Reorganisation. Accordingly, the Historical Financial Information
has been prepared and presented as a contin uation of the consolidated financial
statements of Zhonggan Comm unication with the assets and liabilities of Zhonggan
Communication recognised and measured at their historical carrying amounts prior to the
Reorganisation.
Intra-group balances, transactions and unrealised gains/losses on intra-group
transactions are eliminated in full in preparing the Historical Financial Information.
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1.3 Subsidiaries
As at the date of this report, no statutory financial statements have been prepared for
the Company as it is an investment holding company and is not subject to statutory audit
requirements under the relevant rules and regulations in the jurisdiction of incorporation.
The financial statements of the subsidiaries of the Group for which there are statutory
requirements were prepared in accordance with the relevant accounting rules and
regulations applicable to entities in the countries regions in which they were incorporated
and/or established.
As at the date of this report, the Company has direct or indirect interests in the
following subsidiaries, all of which are private companies:
Company name
Place and date
of
incorporation/
establishment
Particulars of
issued and
paid-up capital/
registered
capital
Proportion of
ownership interest
Principal activities
Name of
statutory
auditor
Held by the
Company
Held by the
subsidiary
Directly held
Zhonggan Communication (BVI) Holding
Co., Ltd ( ‘‘Zhonggan BVI ’’)
British Virgin
Islands (BVI)/
24 May 2022
US$1/US$50,000 100% – Investment holding note (v)
Indirectly held
Zhonggan Communication Hong Kong
Limited （中贛通信香港有限公司）
Hong Kong/
9 June 2022
HK$1/
HK$1
– 100% Investment holding note (v)
Jiangxi Zhongge Communication
Company Limited ( ‘‘Jiangxi Zhongge ’’)
（ 江西中歌通信有限公司 ）
(notes (i) and (ii))
PRC/
18 July 2022
HK$13,021,217/
HK$22,806,837
– 100% Investment holding note (v)
Zhonggan Communication
Company Limited
（ 中贛通信（ 集團 ）有限公司 ）
(notes (i) and (iii))
PRC/
23 May 2002
RMB65,522,636/
RMB65,522,636
– 100% Infrastructure
Construction
Services/
Digitalisation
Solution Services/
Maintenance
Services
note (iv)
Jiangxi Gelapu T echnology Company
Limited
（ 江西戈拉普科技有限公司 ）
(notes (i) and (iii))
PRC/
30 November
2017
RMB30,000,000/
RMB30,000,000
– 100% Digitalisation
Solution Services
note (v)
Gantong Communication (Jiangxi)
Company Limited
（ 贛通通信（ 江西 ）有限公司 ）
(notes (i) and (iii))
PRC/
28 October 2019
RMB10,000,000/
RMB10,000,000
– 100% Yet to commence
business activities
note (v)
Gantong Communication (Xiamen)
Company Limited
（ 贛通通信（ 廈門 ）有限公司 ）
(notes (i) and (iii))
PRC/
12 November
2021
RMB Nil/
RMB1,000,000
– 100% Yet to commence
business activities
note (v)
Jiangxi Gelapu Software Company Limited
（ 江西歌拉普軟件有限公司 ）
(notes (i) and (iii))
PRC/
11 February
2022
RMB Nil/
RMB5,000,000
– 100% Digitalisation
Solution Services
note (v)
APPENDIX I ACCOUNTANTS ’ REPORT
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Notes:
(i) The official name of this entity is in Chinese. The English name is for identification purpose only.
(ii) This entity was registered as a wholly foreign-owned enterprise under the PRC Law.
(iii) These entities were registered as domestic enterprises under the PRC Law.
(iv) The statutory financial statements for Zhonggan Communication Company Limited for the year ended
31 December 2022 was audited by Nanchang Weida Accounting Firm. No statutory financial
statements were prepared for the years ended 31 December 2021 and 2023.
(v) No statutory audited financia l statements have been prepared for these companies during the Track
Record Period as they were not required to issue audited financial statements under the statutory
requirements of their places of incorporation.
All companies now comprising the Group have adopted 31 December as their
financial year end date.
The Historical Financial Information has been prepared in accordance with all
applicable Hong Kong Financial Reporting Standards ( ‘‘HKFRSs ’’) which collective term
includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong
Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified
Public Accountants (the ‘‘HKICPA’’). Further details of the material accounting policy
information are set out in note 2.
The HKICPA has issued a number of new and revised HKFRSs. For the purpose of
preparing this Historical Financial Information, the Group has adopted all applicable new
and revised HKFRSs to the Track Record Period consistently throughout the Track Record
Period. The revised and new accounting standards and interpretations issued but not yet
effective for the accounting period beginning on 1 January 2023 are set out in note 31.
The Historical Financial Information also complies with the applicable disclosure
provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited.
The accounting policies set out below have been applied consistently to all periods
presented in the Historical Financial Information.
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2 Material accounting policy information
(a) Basis of measurement
The Historical Financial Information is presented in RMB, rounded to the nearest
thousand unless otherwise indicated.
The measurement basis used in the preparation of the Historical Financial Information
is the historical cost basis.
(b) Use of estimates and judgements
The preparation of Historical Financial Information in conformity with HKFRSs requires
management to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates.
(c) Subsidiaries and n on-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it
is exposed, or has rights, to variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. When assessing whether
the Group has power, only substantive rights (held by the Group and other parties) are
considered.
An investment in a subsidiary is consolidated into the Historical Financial Information
from the date that control commences until the date that control ceases. Intra-group
balances, transactions and cash flows and any unrealised profits arising from intra-group
transactions are eliminated in full in prepari ng the Historical Financial Information.
Unrealised losses resulting from intra-group transactions are eliminated in the same way
as unrealised gains but only to the extent that there is no evidence of impairment.
Non-controlling interests repr esent the equity in a subsidiary not attributable directly or
indirectly to the Company, and in respect of which the Group has not agreed any additional
terms with the holders of those interests which would result in the Group as a whole having
a contractual obligation in respect of those interests that meets the definition of a financial
liability. For each business combination , the Group can elect to measure any non-
controlling interests either at fair value or at the non-controlling interests ’ proportionate
share of the subsidiary ’s net identifiable assets.
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Non-controlling interests are presented in the consolidated statement of financial
position within equity, separately from equity attributable to the equity shareholders of the
Company. Non-controlling interests in the res ults of the Group are presented on the face of
the consolidated statement of profit or loss and the consolidated statement of profit or loss
and other comprehensive income as an allocation of the total profit or loss and total
comprehensive income for the year between non-controlling inter ests and the equity
shareholders of the Company. Loans from holders of non-controlling interests and other
contractual obligations towards these holders are presented as financial liabilities in the
consolidated statement of financial position in accordance with notes 2(o) or (p) depending
on the nature of the liability.
Changes in the Group ’s interests in a subsidiary that do not result in a loss of control
are accounted for as equity transactions, whereby adjustments are made to the amounts of
controlling and non-controlling interests with in consolidated equity to reflect the change in
relative interests, but no adjustments are made to goodwill and no gain or loss is
recognised.
In the Company ’s statement of financial position, an investment in a subsidiary is
stated at cost less impairment losses (see note 2(j)(ii)).
(d) Associates
An associate is an entity in which the Group or the Company has significant influence,
but not control or joint control, over in the financial and operating policies.
An investment in an associate is accounted for in the consolidated financial
statements under the equity method, unless it is classified as held for sale (or included in
a disposal group that is classified as held for sale). Under the equity method, the
investment is initially recorded at cost, adjusted for any excess of the Group ’s share of the
acquisition-date fair values of the investee ’s identifiable net assets over the cost of the
investment (if any). The cost of the investment includes purchase price, other costs directly
attributable to the acquisition of the inves tment, and any direct investment into the
associate that forms part of the Group ’s equity investment. Thereafter, the investment is
adjusted for the post acquisition change in the Group ’s share of the investee ’s net assets
and any impairment loss relating to the investment. At each reporting date, the Group
assesses whether there is any objective evidence that the investment is impaired. Any
acquisition-date excess over cost, the Group ’s share of the post-acquisition, post-tax
results of the investees and any impairment losses for the year are recognised in the
consolidated statement of profit or loss, whereas the Group ’s share of the post-acquisition
post-tax items of the investees ’ other comprehensive income is recognised in the
consolidated statement of profit or loss and other comprehensive income.
When the Group ’s share of losses exceeds its interest in the associate, the Group ’s
interest is reduced to nil and recognition of further losses is discontinued except to the
extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the investee. For this purpose, the Group ’s interest is the carrying amount of the
investment under the equity method, together with any other long-term interests that in
substance form part of the Group ’s net investment in the associate, after applying the ECL
model to such other long-term interests where applicable (see note 2(j)(i)).
APPENDIX I ACCOUNTANTS ’ REPORT
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Unrealised profits and losses resulting from transactions between the Group and its
associates are eliminated to the extent of the Group ’s interest in the investee, except where
unrealised losses provide evidence of an impairment of the asset transferred, in which
case they are recognised immediately in profit or loss.
(e) Investment property
Investment properties are land and/or buildings which are owned or held under a
leasehold interest (see note 2(i)) to earn rental income and/or for capital appreciation.
These include land held for a currently undetermined future use and property that is being
constructed or developed for future use as investment property.
Investment properties are stated at cost less accumulated depreciation and
accumulated impairment losses. Rental income from investment properties is accounted
for as described in note 2(t)(ii)(a).
Depreciation is calculated to write off the costs of investment properties, less its
residual value of 5%, if any, using the straight-line method over their estimated useful lives
of 40 years. Both the useful life and residual value, if any, are reviewed annually.
(f) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses (see note 2(j)(ii)):
Gains or losses arising from the retirement or disposal of an item of property, plant
and equipment are determined as the difference between the net disposal proceeds and
the carrying amount of the item and are recognised in profit or loss on the date of
retirement or disposal.
Depreciation is calculated to write-off the cost of items of property, plant and
equipment, less their estimated residual value, if any, using the straight-line method over
their estimated useful lives as follows:
– Buildings 10-40 years
– Machinery 5 years
– Motor vehicles 8 years
– Office and other equipment 3 years
– Right-of-use assets (see note 2(j)) 15-36 months
Depreciation methods, useful lives and residual values are reviewed at each reporting
date and adjusted if appropriate.
(g) Construction in progress
Construction in progress represents buildings and plant under construction and
machinery and equipment under installation and testing, and is stated at cost less
accumulated impairment loss, if any (see note 2(j)(ii)). The cost includes the direct costs of
construction, plant and equipment.
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Construction in progress is not depreciated until such time as the assets are
completed and ready for operational use, after which the costs are transferred to property,
plant and equipment and depreciated in accordance with the policy as stated in note 2(f).
(h) Research and development expenses
Expenditure on research activities is recognised as an expense in the period in which
it is incurred. Development expenditure is capitalised only if the expenditure can be
measured reliably, the product or process is t echnically and commercially feasible, future
economic benefits are probable and the Group has sufficient resources and the intention to
complete development and to use or sell the resulting asset. Otherwise, it is recognised in
profit or loss as incurred. Capitalised development expenditure is subsequently measured
at cost less accumulated amortis ation and impairment losses.
(i) Leased assets
At inception of a contract, the Group assesses whether the contract is, or contains, a
lease. A contract is, or contains, a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration. Control is
conveyed where the customer has both the right to direct the use of the identified asset
and to obtain substantially all of the economic benefits from that use.
(i) As a lessee
Where the contract contains lease components and non-lease components, the
Group has elected not to separate non-lease components and accounts for each
lease component and any associated non-lease components as a single lease
component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and
a lease liability, except for short-term le ases that have a lease term of 12 months or
less and leases of low-value assets. When the Group enters into a lease in respect of
a low-value asset, the Group decides whether to capitalise the lease on a lease-by-
lease basis. The lease payments assoc iated with those leases which are not
capitalised are recognised as an expense on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the
present value of the lease payments payable over the lease term, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily determined, using
a relevant incremental borrowing rate. After initial recognition, the lease liability is
measured at amortised cost and interest expense is calculated using the effective
interest method. Variable lease payments that do not depend on an index or rate are
not included in the measurement of the lease liability and hence are charged to profit
or loss in the accounting period in which they are incurred.
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The right-of-use asset recognised when a lease is capitalised is initially
measured at cost, which comprises the initial amount of the lease liability plus any
lease payments made at or before the commencement date, and any initial direct
costs incurred. Where applicable, the cost of the right-of-use assets also includes an
estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, discounted to their present value,
less any lease incentives received. The right-of-use asset is subsequently stated at
cost less accumulated depreciation and impairment losses (see notes 2(f) and 2(j)(ii)).
Refundable rental deposits are accounted for separately from the right-of-use
assets in accordance with the accounting p olicy applicable to investments in non-
equity securities carried at amortised cost. Any excess of the nominal value over the
initial fair value of the deposits is accounted for as additional lease payments made
and is included in the cost of right-of-use assets.
The lease liability is remeasured when there is a change in future lease
payments arising from a change in an index or rate, or there is a change in the
Group ’s estimate of the amount expected to be payable under a residual value
guarantee, or there is a change arising from the reassessment of whether the Group
will be reasonably certain to exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if
the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in ‘‘property, plant and equipment ’’ and
presents lease liabilities separately in t he consolidated statements of financial
position.
In the consolidated statement of financial position, the current portion of long-
term lease liabilities is determined as the present value of contractual payments that
are due to be settled within twelve months after the reporting period.
(ii) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each
lease is a finance lease or an operating lease. A lease is classified as a finance lease
if it transfers substantially all the risks and rewards incidental to the ownership of an
underlying assets to the lessee. If this is not the case, the lease is classified as an
operating lease.
When a contract contains lease and non-lease components, the Group allocates
the consideration in the contract to each component on a relative stand-alone selling
price basis. The rental income from operating leases is recognised in accordance with
note 2(t)(ii)(a).
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--- page 458 ---
When the Group is an intermediate lessor, the sub-leases are classified as a
finance lease or as an operating lease with reference to the right-of-use asset arising
from the head lease. If the head lease is a short-term lease to which the Group
applies the exemption described in note 2(i)(i), then the Group classifies the sub-lease
as an operating lease.
(j) Credit losses and impairment of assets
(i) Credit losses from financial instruments and contract assets
The Group recognises a loss allowance for expected credit losses (ECLs) on the
following items:
– financial assets measured at amortised cost (including cash and cash
equivalents, pledged bank deposits and trade and other receivables); and
– contract assets as defined in HKFRS 15 (see note 2(l)).
Measurement of ECLs
ECLs are a probability-weighted estima te of credit losses. Credit losses are
measured as the present value of all expected cash shortfalls (i.e. the difference
between the cash flows due to the Group in accordance with the contract and the
cash flows that the Group expects to receive).
The expected cash shortfalls are discounted using the following discount
rates where the effect of d iscounting is material:
– trade and other receivables and contract assets: effective interest rate
determined at initial recognition or an approximation thereof; and
– variable-rate financial assets: current effective interest rate.
The maximum period considered when estimating ECLs is the maximum
contractual period over which the Group is exposed to credit risk.
In measuring ECLs, the Group takes into account reasonable and
supportable information that is available without undue cost or effort. This
includes information about past events, current conditions and forecasts of future
economic conditions.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are losses that are expected to result from
possible default events within the 12 months after the reporting date;
and
– lifetime ECLs: these are losses that are expected to result from all
possible default events over the expected lives of the items to which
the ECL model applies.
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--- page 459 ---
Loss allowances for trade receivables and contract assets are always
measured at an amount equal to lifetime ECLs. ECLs on these financial assets
are estimated using a provision matrix based on the Group ’s historical credit loss
experience, adjusted for factors that are specific to the debtors and an
assessment of both the current and forecast general economic conditions at the
reporting date.
For all other financial instruments, the Group recognises a loss allowance
equal to 12-month ECLs unless there has been a significant increase in credit
risk of the financial instrument since initial recognition, in which case the loss
allowance is measured at an amount equal to lifetime ECLs.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased
significantly since initial recognition, the Group compares the risk of default
occurring on the financial instrument assessed at the reporting date with that
assessed at the date of initial recognition. In making this reassessment, the
Group considers that a default event occurs when (i) the borrower is unlikely to
pay its credit obligations to the Group in full, without recourse by the Group to
actions such as realising security (if any is held); or (ii) the financial asset is 90
days past due. The Group considers both quantitative and qualitative information
that is reasonable and supportable, including historical experience and forward-
looking information that is available without undue cost or effort.
In particular, the following information is taken into account when assessing
whether credit risk has increased significantly since initial recognition:
– failure to make payments of principal or interest on their contractually
due dates;
– an actual or expected significant deterioration in a financial
instrument ’s external or internal credit rating (if available);
– an actual or expected significant deterioration in the operating results
of the debtor; and
– existing or forecast changes in the technological, market, economic or
legal environment that have a significant adverse effect on the debtor ’s
ability to meet its obligation to the Group.
Depending on the nature of the financial instruments, the assessment of a
significant increase in credit risk is performed on either an individual basis or a
collective basis. When the assessment is performed on a collective basis, the
financial instruments are grouped based on shared credit risk characteristics,
such as past due status and credit risk ratings.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 460 ---
ECLs are re-measured at each reporting date to reflect changes in the
financial instrument ’s credit risk since initial recognition. Any change in the ECL
amount is recognised as an impairment gain or loss in profit or loss. The Group
recognises an impairment gain or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance
account.
Basis of calculation of interest income
Interest income recognised in accordan ce with note 2(t)(ii)(b) is calculated
based on the gross carrying amount of the financial asset unless the financial
asset is credit-impaired, in which case interest income is calculated based on the
amortised cost (i.e. the gross carrying amount less loss allowance) of the
financial asset.
At each reporting date, the Group assesses whether a financial asset is
credit-impaired. A financial asset is credit-impaired when one or more events that
have a detrimental impact on the estimated future cash flows of the financial
asset have occurred.
Evidence that a financial asset is credit-impaired includes the following
observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default or delinquency in interest or
principal payments;
– it becoming probable that the borrower will enter into bankruptcy or
other financial reorganisation;
– significant changes in the technological, market, economic or legal
environment that have an adverse effect on the debtor; or
– the disappearance of an active market for a security because of
financial difficulties of the issuer.
Write-off policy
The gross carrying amount of a financial asset or contract asset is written
off (either partially or in full) to the extent that there is no realistic prospect of
recovery. This is generally the case when the Group determines that the debtor
does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are
recognised as a reversal of impairment in profit or loss in the period in which the
recovery occurs.
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--- page 461 ---
(ii) Impairment of other non-current assets
Internal and external sources of information are reviewed at the end of each
reporting period to identify indications that the following assets may be impaired, an
impairment loss previously recognised no longer exists or may have decreased:
– property, plant and equipment, inc luding right-of-use assets and
construction in progress;
– investment property; and
– investments in a subsidiary in the Company ’s statement of financial position.
If any such indication exists, the asset ’s recoverable amount is estimated.
– Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs
of disposal and value in use. In assessing value in use, 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. Where an asset does not generate cash inflows
largely independent of those from other assets, the recoverable amount is
determined for the smallest group of assets that generates cash inflows
independently (i.e. a cash-generating unit).
– Recognition of impairment losses
An impairment loss is recognised in pr ofit or loss if the carrying amount of
an asset, or the cash-generating unit to which it belongs, exceeds its recoverable
amount. Impairment losses recognised in respect of cash-generating units are
allocated to reduce the carrying amount of the assets in the unit (or group of
units) on a pro rata basis, except that the carrying value of an asset will not be
reduced below its individual fair value less costs of disposal (if measurable) or
value in use (if determinable).
– Reversals of impairment losses
An impairment loss is reversed if there has been a favourable change in the
estimates used to determine the recoverable amount.
A reversal of an impairment loss is limited to the asset ’s carrying amount
that would have been determined had no impairment loss been recognised in
prior years. Reversals of impairment lo sses are credited to profit or loss in the
year in which the reve rsals are recognised.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 462 ---
(k) Inventories and other contract costs
(i) Inventories
Inventories are assets which are held for sale in the ordinary course of business,
in the process of production for such sale or in the form of materials or supplies to be
consumed in the production process or in the rendering of services.
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all
costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs necessary to
make the sale.
When inventories are sold, the carrying amount of those inventories is
recognised as an expense in the period in which the related revenue is recognised.
The amount of any write-down of inventories to net realisable value and all
losses of inventories are recognised as an expense in the period the write-down or
loss occurs. The amount of any reversal of any write-down of inventories is
recognised as a reduction in the amount of inventories recognised as an expense in
t h ep e r i o di nw h i c ht h er e v e r s a lo c c u r s .
(ii) Other contract costs
Other contract costs are the costs to fulfil a contract with a customer which are
not capitalised as inventory (see note 2(k)(i)) or, property, plant and equipment (see
note 2(f)).
Costs to fulfil a contract are capitalised if the costs relate directly to an existing
contract or to a specifically identifiable anticipated contract; generate or enhance
resources that will be used to provide goods or services in the future; and are
expected to be recovered. Costs that relate directly to an existing contract or to a
specifically identifiable anticipated contract may include direct labour, direct materials,
allocations of costs, costs that are explicitly chargeable to the customer and other
costs that are incurred only because the Group entered into the contract (for example,
payments to sub-contractors). Other costs of fulfilling a contract, which are not
capitalised as inventory, property, plant and equipment, are expensed as incurred.
Capitalised contract costs are stated at cost less accumulated amortisation and
impairment losses. Impairment losses are recognised to the extent that the carrying
amount of the contract cost asset exceeds the net of (i) remaining amount of
consideration that the Group expects to receive in exchange for the goods or services
to which the asset relates, less (ii) any costs that relate directly to providing those
goods or services that have not yet been recognised as expenses.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 463 ---
Amortisation of capitalised contract costs is charged to profit or loss when the
revenue to which the asset relates is recognised. The accounting policy for revenue
recognition is set out in note 2(t).
(l) Contract assets and c ontract liabilities
A contract asset is recognised when the Group recognises revenue (see note 2(t))
before being unconditionally entitled to the consideration under the payment terms set out
in the contract. Contract assets are assessed for ECLs in accordance with the policy set
out in note 2(j)(i) and are reclassified to receivables when the right to the consideration has
become unconditional (see note 2(m)).
A contract liability is recognised when the customer pays consideration before the
Group recognises the related revenue (see no te 2(t)). A contract liability would also be
recognised if the Group has an unconditional right to receive consideration before the
Group recognises the related revenue. In such cases, a corresponding receivable would
also be recognised (see note 2(m)).
For a single contract with the customer, ei ther a net contract asset or a net contract
liability is presented. For multiple contracts, contract assets and con tract liabilities of
unrelated contracts are not presented on a net basis.
(m) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive
consideration. A right to receive consideration is unconditional if only the passage of time
is required before payment of that consideration is due. If revenue has been recognised
before the Group has an unconditional right to receive consideration, the amount is
presented as a contract asset (see note 2(l)).
Trade receivables that do not contain a significant financing component are initially
measured at their transaction price. Trade receivables that contain a significant financing
component and other receivables are initially measured at fair value plus transaction costs.
All receivables are subsequently stated at amortised cost, using the effective interest
method and including an allowance for credit losses (see note 2(j)(i)).
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and demand deposits with banks.
Cash and cash equivalents are assessed for EC Ls in accordance with the policy set out in
note 2(j)(i).
(o) Trade and other payables
Trade and other payables are initially recogn ised at fair value. Subsequent to initial
recognition, trade and other payables are stated at amortised cost unless the effect of
discounting would be immaterial, in which case they are stated at invoice amounts.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 464 ---
(p) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs.
Subsequent to initial recognition, loan and borrowings are stated at amortised cost using
the effective interest method . Interest expense is recognised in accordance with the
Group ’s accounting policy for borrowing costs (see note 2(v)).
(q) Employee benefits
Short term employee benefits and contributions to defined contribution retirement
plans
Salaries, annual bonuses, paid annual leave, contributions to defined
contribution retirement plans and the cost of non-monetary benefits are accrued in
the year in which the associated services are rendered by employees. Where payment
or settlement is deferred and the effect would be material, these amounts are stated
at their present values.
(r) Income tax
Income tax expense comprises current tax a nd deferred tax. It is recognised in profit
or loss except to the extent that it relates to a business combination, or items recognised
directly in equity or in OCI.
Current tax comprises the estimated tax payable on the taxable income and any
adjustments to the tax payable or receivable in respect of previous years. The amount of
current tax payable is the best estimate of the tax amount expected to be paid that reflects
any uncertainty related to income taxes. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax also includes any tax arising from
dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised in respect of tem porary differences between the carrying
amounts of assets and liabilities for financia l reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for:
– temporary differences on the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting
nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences;
– temporary differences related to investment in subsidiaries, associates and joint
venture to the extent that the Group is able to control the timing of the reversal of
the temporary differences and it is probable that they will not reverse in the
foreseeable future;
– taxable temporary differences arising on the initial recognition of goodwill; and
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 465 ---
– those related to the income taxes arising from tax laws enacted or substantively
enacted to implement the Pillar Two model rules published by the Organisation
for Economic Co-operation and Development.
The Group recognised deferred tax assets an d deferred tax liabilities separately in
relation to its lease liabilities and right-of-use assets.
Deferred tax assets are recognised for unused tax losses, unused tax credits and
deductible temporary differences to the exten t that it is probable that future taxable profits
will be available against which they can be used. Future taxable profits are determined
based on the reversal of relevant taxable temporary differences. If the amount of taxable
temporary differences is insufficient to reco gnise a deferred tax asset in full, then future
taxable profits, adjusted for reversals of existing temporary differences, are considered,
based on the business plans for individual subsidiaries in the Group. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised; such reductions are reversed when
the probability of future taxable profits improves.
Deferred tax assets and liabilities are o ffset only if certain criteria are met.
(s) Provisions and contingent liabilities
Provisions are recognised when the Group has a legal or constructive obligation
arising as a result of a past event, it is probable that an outflow of economic benefits will
be required to settle the obligation and a reliable estimate can be made. Where the time
value of money is material, provisions are stated at the present value of the expenditure
expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the
amount cannot be estimated reliably, the obligation is disclosed as a contingent liability,
unless the probability of outflow of economic benefits is remote. Possible obligations,
whose existence will only be confirmed by the occurrence or non-occurrence of one or
more future events are also disclosed as cont ingent liabilities unless the probability of
outflow of economic benefits is remote.
(t) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods,
the provision of services or the use by others of the Group ’s assets under leases in the
ordinary course of the Group ’s business.
(i) Revenue from contracts with customers
Revenue is recognised when the Group satisfies a performance obligation in a
contract. A performance obligation represents a distinct good or service that is
transferred by the Group to the customer, a nd is satisfied when the customer obtains
control over that distinct good or service. The Group recognises revenue, at the
amount of promised consideration to which the Group is expected to be entitled,
excluding those amounts collected on behalf of third parties. Revenue excludes value
added tax or other sales taxes and is after deduction of any trade discounts.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 466 ---
Revenue is recognised over time by reference to the progress towards complete
satisfaction of the relevant performance obligation if one of the following conditions is
met: (i) the customer simultaneously receives and consumes the benefits provided by
the Group ’s performance as the Group performs ; (ii) the customer is able to control
goods in the progress during the Group ’s performance; (iii) the Group ’s performance
does not create an asset with an alternative use to the Group and the Group has an
enforceable right to payment for performance completed to date. Otherwise, revenue
is recognised at a point of time when the customer obtains control over the relevant
goods or services.
Where the contract contains a financing component which provides a significant
financing benefit to the customer, the Group adjusts the promised amount of
consideration for the effects of time value of money by using a discount rate that
would be reflected in a separate financing transaction with the customer, and interest
income is accrued separately under the effective interest method. Where the contract
contains a financing component which provides a significant financing benefit to the
Group, revenue recognised under that contract includes the interest expense accreted
on the contract liability under the effective interest method. The Group takes
advantage of the practical expedient in paragraph 63 of HKFRS 15 and does not
adjust the consideration for any effects of a significant financing component if the
period of financing is 12 months or less.
Further details of the Group ’s revenue and other income recognition policies are
as follows:
(a) Provision of infrastruc ture construction services
The Group recognises reve nue from provision of infrastructure construction
services over time because the Group ’s construction activities create or enhance
assets controlled by the customers. The Group adopts the input method to
measure performance progress and revenue is recognised based on the
proportion of the actual costs incurred relative to the estimated total costs.
Where the performance progress cannot be determined reasonably, revenue is
recognised based on the amount of cost that is expected to be compensated
based on the cost already incurred, until the performance progress can be
reasonably determined.
The likelihood of the Group suffering settlement amount adjustments
resulting from final completion inspection and project settlement audit are taken
into account in making these estimates, such that revenue is only recognised to
the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The Group applies the most likely
amount approach to estimate such variable consideration by considering the
single most likely amount in a limited range of possible consideration amounts,
taking into account the Group ’s current progress and adjustment rates over
historical periods.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 467 ---
(b) Provision of digitalisation solution services
In this business model, the Group provides the following 3 types of services
based on customer needs:
(i) Integrated solution services
The Group designs and provides integrated IT solutions for the
customers by integrating different hardware and software based on the
service specifications of the customers. The Group develops the integrated
IT solutions at the sites designated by the customers. As the Group ’s
performance creates or enhances assets that the customers control as the
Group performs, the Group recogn ises revenue over time. The Group
adopts the input method to measure performance progress and revenue is
recognised based on the proportion of the actual costs incurred relative to
the estimated total costs. Where th e performance progress cannot be
determined reasonably, revenue is recognised based on the amount of cost
that is expected to be compensated based on the cost already incurred,
until the performance progress can be reasonably determined.
(ii) System maintenance service
The Group offers optional system maintenance service to provide on-
site support to the customers of the integrated solution services. If the
customer chooses to purchase system maintenance service, the Group
allocates the transaction price to th e integrated solution services and
system maintenance services. As the Group does not sell the system
maintenance service separately, i t uses expected cost plus a margin
approach to estimate the stand-alone selling price of the system
maintenance service. Revenue from the system maintenance service is
recognised over time on a straight-line basis as the customer
simultaneously receives and consumes the benefits as the Group performs
and the Group ’s efforts are expended evenly during the on-site support
period.
(iii) Software solution services
In this service type, the Group grants a licence to customers which
allow them to use the software developed by the Group. As the software
has standalone functionality and the G roup will not undertake future
activities that will significantly change the functionality of the software, the
Group recognises revenue from the software licensing at a point in time
when the customers are able to use the software.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 468 ---
(c) Provision of maintenance services in relation to infrastructure
The Group provides maintenance and repair services to fix and rectify
technical issues for infrastructure owned by third parties within their contracted
period. Revenue from maintenance and repair service is recognised over the
scheduled period on a straight-line basis because the customer simultaneously
receives and consumes the benefits provided by the Group.
Additionally, the Group provides emergency and sporadic repair and
maintenance service for customers case by case, the Group recognises revenue
upon the completion of the emergency and sporadic service because the service
is completed within one day.
(ii) Other income
(a) Rental income from operating leases
Rental income receivable under operating leases is recognised in profit or
loss in equal instalments over the periods covered by the lease term, except
where an alternative basis is more representative of the pattern of benefits to be
derived from the use of the leased asset. Lease incentives granted are
recognised in profit or loss as an integral part of the aggregate net lease
payments receivable. Variable lease payments that do not depend on an index or
a rate are recognised as income in th e accounting period in which they are
earned.
(b) Interest income
Interest income is recognised as it ac crues using the eff ective interest
method. For financial assets measured at amortised cost that are not credit-
impaired, the effective interest rate is applied to the gross carrying amount of the
asset. For credit-impaired financial assets, the effective interest rate is applied to
the amortised cost (i.e. gross carrying amount net of loss allowance) of the asset
(see note 2(j)(i)).
(c) Government grants
Government grants are recognised in the statement of financial position
initially when there is reasonable assurance that they will be received and that
the Group will comply with the conditions attaching to them. Grants that
compensate the Group for expenses incurred are recognised as income in profit
or loss on a systematic basis in the same periods in which the expenses are
incurred. Grants that compensate the Group for the cost of an asset are
recognised by setting up the grant as deferred income that is recognised in profit
or loss on a systematic basis over the useful life of the asset.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 469 ---
(u) Translation of foreign currencies
Foreign currency transactions during the year are translated at the foreign exchange
rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign
currencies are translated at the foreign exchange rates ruling at the end of the reporting
period. Exchange gains and losses are recognised in profit or loss.
Non-monetary assets and liabilities that a re measured in terms o f historical cost in a
foreign currency are translated using the foreign exchange rates ruling at the transaction
dates. The transaction date is the date on which the company initially recognises such non-
monetary assets or liabilities.
The results of foreign operations are translated into RMB at the exchange rates
approximating the foreign exchange rates ruling at the dates of the transactions. Statement
of financial position items are translated into RMB at the closing foreign exchange rates at
the end of the reporting period. The resulting exchange differences are recognised in other
comprehensive income and accumulated separately in equity in the exchange reserve.
(v) Borrowing costs
Borrowing costs that are directly attribut able to the acquisition, construction or
production of an asset which necessarily takes a substantial period of time to get ready for
its intended use or sale are capitalised as part of the cost of that asset. Other borrowing
costs are expensed in the period in which they are incurred.
(w) Related parties
(a) A person, or a close member of that person ’s family, is related to the Group if
that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key managemen t personnel of the Group or the Group ’s
parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same Group (which means
that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an
associate or joint venture of a member of a Group of which the other entity
is a member).
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 470 ---
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an
associate of the third 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).
(viii) The entity, or any member of a Group of which it is a part, provides key
management personnel services to the Group or to the Group ’sp a r e n t .
Close members of the family of a person are those family members who may be
expected to influence, or be influenced by, that person in their dealings with the entity.
(x) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial
statements, are identified from the financial information provided regularly to the Group ’s
most senior executive management for the purposes of allocating resources to, and
assessing the performance of, the Group ’s various lines of business and geographical
locations.
Individually material operating segments are not aggregated for financial reporting
purposes unless the segments have similar economic characteristics and are similar in
respect of the nature of products and services, the nature of production processes, the type
or class of customers, the methods used to distribute the products or provide the services,
and the nature of the regulatory environment. Operating segments which are not
individually material may be aggregated if they share a majority of these criteria.
The Group operates in a single business segment, accordingly, no segmental analysis
is presented.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 30


--- page 471 ---
3 Accounting judgements and estimates
Estimates and judgements are continually evaluated and are based on experience and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
The selection of critical accounting polici es, the judgements and other uncertainties
affecting application of those policies and the sensitivity of reported results to changes in
condition and assumptions are factors to be considered when reviewing these financial
statements. The principal accounting policies are set forth in note 2. The Group believes the
following critical accounting policies involve the most significant judgements and estimates used
in the preparation of the Histo rical Financial Information.
(a) Loss allowances of trade receivables and contract assets
The Group estimates the loss allowances for trade receivables and contract assets by
assessing the ECLs. This requires the use of estimates and judgements. ECLs are based
on the Group ’s historical credit loss experience, adjusted for factors that are specific to the
debtors and an assessment of both the current and forecasted general economic
conditions at the end of reporting period. The Group keeps assessing the expected credit
loss of trade receivables and contract assets during their expected lives.
(b) Recognition of deferred tax assets
Deferred tax assets are recognised in respect of deductible temporary differences. As
those deferred tax assets can only be recognised to the extent that it is probable that future
taxable profits will be available against which the deductible temporary differences can be
utilised, management ’s judgement is required to assess the probability of future taxable
profits. Management ’s assessment is revised as necessary and additional deferred tax
assets are recognised if it becomes probable that future taxable profits will allow the
deferred tax asset to be recovered.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 31


--- page 472 ---
4 Revenue
The principal activities of the Group are the provision of infrastructure construction
services, digitalisation solut ion services and maintenance services for customers in the PRC.
(i) Disaggregation of revenue
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Revenue from contracts with customers within
the scope of HKFRS 15
Disaggregated by major products or service lines
Revenue from telecommunications infrastructure services
– i n f r a s t r u c t u r ec o n s t r u c t i o ns e r v i c e s .................... 3 4 4 , 6 3 1 3 0 9 , 2 7 6 4 6 3 , 3 6 7
– i n f r a s t r u c t u r em a i n t e n a n c es e r v i c e s.................... 2 5 , 1 6 0 3 3 , 2 2 4 3 7 , 9 9 0
Revenue from digitalisation solution services
– i n t e g r a t e ds o l u t i o ns e r v i c e s ......................... 1 0 7 , 3 6 4 1 0 , 1 4 8 4 1 , 2 5 8
– s y s t e mm a i n t e n a n c es e r v i c e s........................ 1 , 9 6 3 2 , 0 4 4 4 7 0
– s o f t w a r es o l u t i o ns e r v i c e s .......................... – 58,399 66,216
479,118 413,091 609,301
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Disaggregated by timing of revenue recognition
– O v e rt i m e ..................................... 4 6 7 , 0 5 4 3 3 8 , 2 1 4 5 2 0 , 2 8 8
– P o i n ti nt i m e ................................... 1 2 , 0 6 4 7 4 , 8 7 7 8 9 , 0 1 3
479,118 413,091 609,301
Revenue from major group customers which accounts for 10% or more of the Group ’s
revenue are set out below:
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
C u s t o m e rA ..................................... 3 3 2 , 9 2 9 2 3 7 , 6 6 0 2 9 7 , 2 5 0
C u s t o m e rB ..................................... N / A * 6 0 , 8 1 6 1 2 6 , 3 6 2
C u s t o m e rC ..................................... 6 1 , 0 7 1 N / A * N / A *
C u s t o m e rD ..................................... N / A * 8 9 , 4 0 3 1 3 2 , 0 8 0
394,000 387,879 555,692
* Less than 10% of the Group ’s revenue in the respective years.
Details of concentration of credit risk are set out in note 27(a).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 32


--- page 473 ---
(ii) R e v e n u ee x p e c t e dt ob er e c o g n i s e di nt h ef u t u r ea r i s i n gf r o mc o n t r a c t sw i t h
customers in existence as at 31 December 2021, 2022 and 2023.
As at 31 December 2021, 2022 and 2023, the aggregated amount of the transaction
price allocated to the remaining performance obligations under the Group ’se x i s t i n g
digitalisation solution services contracts is RMB2,810,000, RMB767,000 and
RMB1,274,000 respectively. The Group will recognise the expected revenue in future when
or as the service is provided, which is expected to occur over the next 1 to 5 years after
each reporting date.
The Group has applied the practical expedient in paragraph 121 of HKFRS 15 such
that the above information does not include information about revenue that the Group will
be entitled to when it satisfies the remaining performance obligations under the contracts
that had an original expected duration of one year or less.
5 Other net income
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Interest income (note (i)) ................................ 2 , 0 4 3 3 , 0 1 6 1 , 3 5 4
B a n kd e p o s i ti n t e r e s ti n c o m e .............................. 1 1 2 1 1 9 1 8 0
Government grants
(note (ii)) .............................. 3 , 2 5 4 8 6 9 3 , 2 4 8
Rentals income from investment properties
l e s sd i r e c to u t g o i n g s................................. 6 4 2 6 4 2 6 4 2
(Loss)/gain on disposal of property,
p l a n ta n de q u i p m e n ta n do t h e rf i n a n c i a la s s e t s ................ ( 2 5 ) ( 1 0 3 ) 2
S h a r eo fp r o f i t so fa s s o c i a t e s............................. –– 74
N e tf o r e i g ne x c h a n g eg a i n / ( l o s s ) ........................... – 344 (732)
O t h e r s ............................................ ( 1 7 6 ) ( 1 3 7 ) 2 5 0
5,850 4,750 5,018
Notes:
(i) The interest income is attributable to the significant financing benefit to the Group for contracts containing a
financing component in accordance with the accounting policies as set out in note 2(t).
(ii) The government grants mainly rep resent awards from Jiangxi governmen t authorities attributable to (i) the
recognition of the Group ’s efforts in reducing corporate costs and optimising development environment, (ii)
the support for Zhonggan Communication ’s previous A-Share listing plan and equity financing activities, (iii)
the recognition of the Group ’s contribution to the development of high-tech industries in Nanchang, (iv) as
subsidies for the Group ’s research and development activities and (v) software VAT refund upon collection.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 33


--- page 474 ---
6 Profit before taxation
Profit before taxation is arrive d at after charging/(crediting):
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
(a) Finance costs
I n t e r e s to nb a n kb o r r o w i n g s .......................... 1 0 , 9 2 0 1 5 , 0 9 3 1 6 , 6 6 0
Interest on contract contains a financing component . . . . . . . . . . 552 234 7
I n t e r e s to nl e a s el i a b i l i t i e s ........................... 8 5 1 5
11,480 15,332 16,682
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
(b) Staff costs
Salaries, discretionary bonus and allowance . . . . . . . . . . . . . . . . 26,911 25,550 24,459
Contributions to defined contribution retirement plan (note 24) . . . . 2,175 1,865 2,625
29,086 27,415 27,084
(c) Other items
Depreciation
– property, plant and equipment (note 11) ................. 1 , 6 9 8 1 , 5 6 4 1 , 5 1 7
– investment property (note 12) ........................ 5 2 6 5 2 5 5 2 6
– right-of-use assets (note 11) ......................... 3 3 4 2 0 2 2 8 4
Impairment losses/(reversal)
– trade receivables
(note 16) ......................... 3 , 1 6 5 8 , 3 7 3 1 2 , 4 2 6
– contract assets (note 15(a)) ......................... 9 8 1 , 4 9 1 ( 1 , 1 5 8 )
– other receivables (note 16) ......................... 4 9 6 9 7 8 4 2 6
S h o r t - t e r ma n dl o w - v a l u ea s s e t sl e a s ec h a r g e s .............. 4 8 2 4 7 6 2 9 2
Research and development costs
( e x c l u d i n gs t a f fc o s t )............................. 1 0 , 5 4 8 7 , 2 8 0 1 5 , 0 3 7
Labour cost
(note (i)) ............................... 2 9 9 , 6 7 0 2 7 5 , 8 2 0 4 0 3 , 2 0 3
Cost of inventories (note (ii)) .......................... 4 9 , 1 1 7 5 , 9 3 9 2 3 , 8 0 7
L i s t i n ge x p e n s e .................................. 5 5 7 6 , 6 0 9 8 , 5 6 6
Notes:
(i) The Group engages labour suppliers to supplement the Group ’s labor force in performing labour intensive
projects.
(ii) Cost of inventories mainly include the cost of hardware used for the provision in digitalisation solution
services.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 34


--- page 475 ---
7 Income tax in the consolidated statements of profit or loss and other comprehensive
income
(a) Taxation in the consolidated statements of profit or loss and other
comprehensive income represents:
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Current tax
P r o v i s i o nf o rt h ey e a r .............................. 9 , 9 4 8 1 8 , 8 3 1 ( 1 6 , 1 3 2 )
Deferred tax
Origination and reversal of temporary differences
(note 25(b)) ................................... ( 5 , 2 0 2 ) ( 1 4 , 8 6 6 ) 1 7 , 4 7 1
4,746 3,965 1,339
(b) Reconciliation between tax expense and accounting pr ofit/(loss) at applicable
tax rates:
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Profit before taxation .............................. 4 0 , 9 1 9 3 8 , 9 4 0 7 0 , 0 1 0
Notional tax on profit before taxation, calculated
at the rates applicable to profits in the countries concerned
(notes (i), (ii) and (iii)) ............................ 1 0 , 2 2 9 9 , 7 3 5 1 7 , 5 0 3
T ax effect of PRC preferential tax treatments
(notes (iv) and (vi)) .............................. ( 4 , 0 9 2 ) ( 3 , 9 7 1 ) ( 1 3 , 8 1 7 )
T ax effect of additional deduction on research and development
costs (note (v)) ................................. ( 1 , 7 5 0 ) ( 2 , 1 9 7 ) ( 2 , 9 6 6 )
T a xe f f e c to fn o n - d e d u c t i b l ee x p e n s e s .................... 3 5 9 3 9 8 6 1 9
A c t u a lt a xe x p e n s e................................ 4 , 7 4 6 3 , 9 6 5 1 , 3 3 9
APPENDIX I ACCOUNTANTS ’ REPORT
I – 35


--- page 476 ---
Notes:
(i) Pursuant to the rules and regulations of the Cay man Islands and the BVI, the Group is not subject to
any income tax in the Cayman Islands and the BVI.
(ii) No provision for Hong Kong Profits T ax has been made, as the subsidiary of the Group incorporated
in Hong Kong did not have assessable profits which are subject to Hong Kong Profits T ax during the
Track Record Period.
(iii) The subsidiaries of the Group established in t he PRC is subject to PRC Corporate Income T ax rate at
the statutory rate of 25%.
(iv) The PRC Corporate Income T ax Law allows enterprises to apply for certificate of ‘‘High and New
T echnology Enterprise ’’ (‘‘HNTE ’’) which entitles the qualified companies to a preferential income tax
rate of 15%, subject to fulfilment of the recognition criteria. Zhonggan Communication was qualified
as an HNTE since 2015, Jiangxi Gelapu T echnology Company Limited was qualified as an HNTE
since 2020, and these qualifications have remained valid throughout the Track Record Period.
(v) According to the relevant tax rules in the PRC, qualified research and development costs are allowed
for bonus deduction for income tax purpose, as a result, an additional 75%, 100% and 100% of the
qualified research and development costs could be deemed as deductible expenses in 2021, 2022
and 2023 respectively.
(vi) According to the PRC Corporate Income T ax Law and its implementation regulations, Jiangxi Gelapu
Software Company Limited was qualified as a ‘‘Small Low-profit Enterprise ’’ and enjoyed a reduced
corporate income tax rate of 20% in 2022. In addition, Jiangxi Gelapu Software Company Limited was
qualified as a ‘‘Double-soft Enterprise ’’ in 2023, which entitles the qualified companies to enjoy full
exemption from corporate income tax for the first two years from the profi t-making year and a 50%
reduction on corporate for the next subsequent three years.
(vii) According to the PRC Corporate Income T ax Law and its implementation regulations, dividends
receivable by non-PRC corporate residents from PR C enterprises are subject to withholding tax at a
rate of 10%, unless reduced by tax treaties or arrangements, for profits earned since 1 January 2008.
In addition, under the Arrangement between the Mainland China and the Hong Kong Special
Administrative Region for the Avoidance of Double T axation and the Prevention of Fiscal Evasion with
respect to T axes on Income and its relevant regulations, a qualified Hong Kong tax resident will be
liable for withholding tax at the rate of 5% for dividend income derived from the PRC if the Hong Kong
t a xr e s i d e n ti st h e ‘‘beneficial owner ’’ and holds 25% or more of the equity interests of the PRC
company.
The provision of the related deferred tax liabilities, if any, are based on the expected dividends to be
distributed from these subsidiaries in the foreseeable future in respect of the profits generated since 1
January 2008. Deferred tax liabilities have not bee n recognised in respect of the tax that would be
payable on the distribution of the retained profits as the Company controls the dividend policy of
these subsidiaries and it has been determined th at it is probable that these profits will not be
distributed in the foreseeable future.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 36


--- page 477 ---
8D i r e c t o r s ’ emoluments
For the Track Record Period, details of the emoluments of the directors of the Company
are as follows:
Year ended 31 December 2021
Directors ’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Executive directors
M r .L i uH a o q i o n g .................... – 965 – 69 7 1
M r .L i uD i n g l i ....................... – 247 – 62 5 3
M r .P e n gS h e n g q i a n.................. – 611 – 10 621
M r .Z h o uZ h i q i a n g .................... – 145 32 6 183
M s .X i eX i a o l a n..................... – 82 81 – 163
M r .L i uD i n g y i ...................... – 80 13 6 99
– 2,130 126 34 2,290
Year ended 31 December 2022
Directors ’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Executive directors
M r .L i uH a o q i o n g .................... – 866 – 78 7 3
M r .L i uD i n g l i ....................... – 355 – 73 6 2
M r .P e n gS h e n g q i a n.................. – 610 – 12 622
M r .Z h o uZ h i q i a n g .................... – 229 – 72 3 6
M s .X i eX i a o l a n..................... – 273 –– 273
M r .L i uD i n g y i ...................... – 115 – 71 2 2
– 2,448 – 40 2,488
Year ended 31 December 2023
Directors ’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Executive directors
M r .L i uH a o q i o n g .................... – 404 – 74 1 1
M r .L i uD i n g l i ....................... – 382 – 73 8 9
M r .P e n gS h e n g q i a n.................. – 169 – 20 189
M r .Z h o uZ h i q i a n g .................... – 193 – 72 0 0
M s .X i eX i a o l a n..................... – 192 –– 192
M r .L i uD i n g y i ...................... – 150 – 71 5 7
– 1,490 – 48 1,538
APPENDIX I ACCOUNTANTS ’ REPORT
I – 37


--- page 478 ---
On 19 May 2022, Mr. Liu Haoqiong, Mr. Liu Dingli, Mr. Peng Shengqian, Ms. T ao Xiulan,
Ms. Xie Xiaolan and Mr. Liu Dingyi were appointed as executive directors of the Company. On
13 September 2022, Ms. T ao Xiulan resigned as director of the Company, and Mr. Zhou
Zhiqiang was appointed as director of the Company on the same day.
All executive directors acted as key management personnel of the Group during the Track
Record Period and the emoluments disclosed above include those for services rendered by
them as key management personnel of the Group.
During the Track Record Period, there were no amounts paid or payable by the Group to
the directors or any of the highest paid individuals set out in note 9 below as an inducement to
join or upon joining the Group or as a compensation for loss of office. There was no
arrangement under which an executive director waived or agreed to waive any remuneration
during the Track Record Period.
9 Individuals with highest emoluments
During the Track Record Period, of the five individuals with the highest emoluments three,
three and two are directors whose emoluments are disclosed in note 8. The aggregate of the
emoluments in respect of the remaining two, two and three individuals are as follows:
Year ended 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
S a l a r i e sa n do t h e re m o l u m e n t s.................................. 5 2 7 1 , 0 3 9 8 5 8
R e t i r e m e n ts c h e m ec o n t r i b u t i o n s................................. 1 5 1 9 2 1
542 1,058 879
The emoluments of the individuals who are not directors and who are amongst the five
highest paid individuals of the Group are within the following band:
Year ended 31 December
2021 2022 2023
Number of
individuals
Number of
individuals
Number of
individuals
Nil – H K $ 1 , 0 0 0 , 0 0 0 .................................... 2 2 3
10 Earnings per share
No earnings per share information is presented as its inclusion, for the purpose of this
report, is not considered meaningful due to the Reorganisation and the preparation of the results
during the Track Record Period using the basis of preparation as disclosed in note 1 above.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 38


--- page 479 ---
11 Property, plant and equipment
Buildings Machinery Motor vehicles
Office and
other
equipment Sub-total
Right-of-use
assets
Construction
in progress Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
As at 1 January 2021 24,378 2,571 1,915 3,393 32,257 1,014 – 33,271
Additions ––– 128 128 134 432 694
Disposals ––– (520) (520) (624) – (1,144)
As at 31 December 2021 and
1 January 2022 24,378 2,571 1,915 3,001 31,865 524 432 32,821
Additions ––– 215 215 395 1,488 2,098
Disposals – (1,767) (118) (104) (1,989) (390) – (2,379)
As at 31 December 2022 and
1 January 2023 24,378 804 1,797 3,112 30,091 529 1,920 32,540
Additions – 150 – 110 260 388 13,311 13,959
Transfer from construction in progress 2,321 –– 41 2,362 – (2,362) –
As at 31 December 2023 26,699 954 1,797 3,263 32,713 917 12,869 46,499
Accumulated depreciation:
As at 1 January 2021 (3,403) (2,124) (1,755) (2,372) (9,654) (630) – (10,284)
Charge for the year (1,078) (163) – (457) (1,698) (334) – (2,032)
Written back on disposals ––– 494 494 624 – 1,118
As at 31 December 2021 and
1 January 2022 (4,481) (2,287) (1,755) (2,335) (10,858) (340) – (11,198)
Charge for the year (1,078) (152) – (334) (1,564) (202) – (1,766)
Written back on disposals – 1,678 112 89 1,879 390 – 2,269
As at 31 December 2022 and
1 January 2023 (5,559) (761) (1,643) (2,580) (10,543) (152) – (10,695)
Charge for the year (1,313) (41) – (163) (1,517) (284) – (1,801)
As at 31 December 2023 (6,872) (802) (1,643) (2,743) (12,060) (436) – (12,496)
Net book value:
As at 31 December 2021 19,897 284 160 666 21,007 184 432 21,623
As at 31 December 2022 18,819 43 154 532 19,548 377 1,920 21,845
As at 31 December 2023 19,827 152 154 520 20,653 481 12,869 34,003
Notes:
(i) All property, plant and equipment owned by the Group are located in the PRC.
(ii) The Group has obtained the right to use certain staff dormitory through tenancy agreements during the
Track Record Period. The leases typi cally run for an initial period of 15 to 36 months. None of the leases
includes variable lease payments.
(iii) As at 31 December 2021, 2022 and 2023, property, plant and equipment with a carrying amount of
RMB19,897,000, RMB18,819,000 and RMB19,827,000 respectively are pledged to secure the Group ’sb a n k
borrowings (note 22).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 39


--- page 480 ---
12 Investment property
Buildings
RMB’000
Cost:
At 1 January 2021, 31 December 2021, 2022 and 2023 . . . . . . . . . . . . 22,125
Accumulated a mortisation:
A t1J a n u a r y2 0 2 1....................................... ( 1 , 7 0 7 )
C h a r g ef o rt h ey e a r ...................................... ( 5 2 6 )
A t3 1D e c e m b e r2 0 2 1a n d1J a n u a r y2 0 2 2 ...................... ( 2 , 2 3 3 )
C h a r g ef o rt h ey e a r ...................................... ( 5 2 5 )
A t3 1D e c e m b e r2 0 2 2a n d1J a n u a r y2 0 2 3 ...................... ( 2 , 7 5 8 )
C h a r g ef o rt h ey e a r ...................................... ( 5 2 6 )
A t3 1D e c e m b e r2 0 2 3 ..................................... (3,284)
Net book value:
A t3 1D e c e m b e r2 0 2 1 ..................................... 1 9 , 8 9 2
A t3 1D e c e m b e r2 0 2 2 ..................................... 1 9 , 3 6 7
A t3 1D e c e m b e r2 0 2 3 ..................................... 1 8 , 8 4 1
The Group leases out investment property under operating leases. The leases run for an
i n i t i a lp e r i o do f2 0y e a r s ,w i t ha no p t i o nt or e n e wt h el e a s ea f t e rt h a td a t ea tw h i c ht i m ea l lt e r m s
are renegotiated. Lease payments are usually increased every 3 years to reflect market rentals.
Certain leases include variable lease payment terms that are based on the revenue of tenants.
The Group has engaged an independent, professional valuer to determine the fair value of
the investment property using the market comparison approach and income approach as at 30
September 2021, 2022 and 2023 amounting to RMB27,886,320, RMB26,795,600 and
RMB26,407,500 respectively. The directors of the Company have assessed and estimated the
fair value of the investment properties as at 31 December 2021, 2022 and 2023 to be the same
as their fair values as at 30 September 2021, 2022 and 2023 respectively.
As at 31 December 2021, 2022 and 2023, investment property with a carrying amount of
RMB19,892,000, RMB19,367,000 and RMB18,841,000 respectively was pledged to secure the
Group ’s bank borrowings (note 22).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 40


--- page 481 ---
Undiscounted lease payments under non-cancellable operating leases in place at each
reporting date will be receivable by the Group in future periods as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r ........................................ 1 , 1 8 3 1 , 1 8 3 1 , 1 8 3
A f t e r1y e a rb u tw i t h i n2y e a r s ............................ 1 , 1 8 3 1 , 1 8 3 1 , 2 2 7
A f t e r2y e a r sb u tw i t h i n3y e a r s ............................ 1 , 1 8 3 1 , 2 2 7 1 , 2 4 2
A f t e r3y e a r sb u tw i t h i n4y e a r s ............................ 1 , 2 2 7 1 , 2 4 2 1 , 2 4 2
A f t e r4y e a r sb u tw i t h i n5y e a r s ............................ 1 , 2 4 2 1 , 2 4 2 1 , 2 4 2
A f t e r5y e a r s........................................ 1 8 , 4 1 8 1 7 , 1 7 6 1 5 , 9 3 4
24,436 23,253 22,070
13 Interests in associates
The following list contains the particulars of associates, all of which are unlisted corporate
entities whose quoted market price is not available:
Proportion of ownership interest
Name of associate
Form of
business
structure
Place of
incorporation
and business
Particulars of
issued and
paid-up capital/
registered
capital
Group ’s
effective
interest
Held by the
Company
Held by a
subsidiary
Principal
activity
Jian Qingyoupu Information
T echnology Limited
（ 吉安青優普信息科技
有限公司 ）...........
Incorporate PRC RMB Nil/
RMB5,000,000
49% – 49% Yet to commence
business
activities
Jiangxi Wanpuxing Information
T echnology Limited
（ 江西灣普興科技
有限公司 ）...........
Incorporate PRC RMB Nil/
RMB10,000,000
49% – 49% Digitalisation
solution services
All of the above associates are accounted for using the equity method in the consolidated
financial statements.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 41


--- page 482 ---
Aggregate information of associates that are not individually material:
As at
31 December
2023
RMB’000
Aggregate carrying amount of individually immaterial associates in the
c o n s o l i d a t e df i n a n c i a ls t a t e m e n t s ........................... 7 , 4 2 4
Aggregate amounts of the Group ’s share of those associates ’
P r o f i tf r o mc o n t i n u i n go p e r a t i o n s ........................... 7 4
Post-tax profit or loss from discontinued operations . . . . . . . . . . . . . . . –
O t h e rc o m p r e h e n s i v ei n c o m e ............................... –
T o t a lc o m p r e h e n s i v ei n c o m e ................................ 7 4
14 Inventories and other contract costs
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Inventories (note i)
– H a r d w a r e......................................... 5 , 0 7 8 3 , 7 2 9 5 2 0
– S o f t w a r e ......................................... 5 9 1 5 9 2 6 5
5,669 3,788 785
Other contract costs (note ii) ............................ 1 4 , 6 2 6 1 6 , 4 0 7 1 0 , 4 5 5
20,295 20,195 11,240
Notes:
(i) Inventories
All of the inventories are expected to be recovered within one year.
(ii) Other contact costs
Contract costs capitalised as at 31 December 2021, 2022 and 2023 relate to the suppliers costs incurred in
fulfilling construction contracts with customers. Contr act costs are recognised as part of cost of sales in the
statement of profit or loss and other comprehensive i ncome in the period in which revenue is recognised.
The amount of capitalised costs recognised in profi t or loss during each of the years ended 31 December
2021, 2022 and 2023 was RMB14,626,000, RMB16,407,000 and RMB10,455,000 respectively. There was
no impairment in relation to the opening balance of capitalised costs or the costs capitalised during the
Track Record Period.
All of the other capitalised contract costs are expected to be recovered within one year.
APPENDIX I ACCOUNTANTS ’ REPORT
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15 Contract assets and contract liabilities
(a) Contract assets
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Contract assets
Arising from performance under provision of telecommunications
infrastructure services
– t h i r dp a r t i e s ...................................... 5 1 4 , 3 9 6 5 3 7 , 8 2 5 7 2 8 , 3 9 2
L e s s :l o s sa l l o w a n c e .................................... ( 1 , 5 0 3 ) ( 2 , 2 0 2 ) ( 1 , 9 5 7 )
512,893 535,623 726,435
Arising from performance under provision of
digitalisation solution services
– t h i r dp a r t i e s ...................................... 7 2 8 4 , 9 7 2 4 3 1
L e s s :l o s sa l l o w a n c e .................................... ( 1 5 9 ) ( 9 5 0 ) ( 3 7 )
569 4,022 394
513,462 539,645 726,829
Receivables from contracts with customers within
the scope of HKFRS 15, which are included
in ‘‘Trade and other receivables ’’ (note 16) .................. 2 2 4 , 9 4 3 2 6 0 , 1 5 4 2 4 9 , 9 9 5
The Group ’s contract assets consist of project money and retention money.
The payment billing of project money i s normally conditional on the Group ’sw o r k
satisfactorily passing the customers ’ final inspection. On the other hand, revenue arising
from such contracts are recognised bas ed on their performance progress or upon
completion in accordance with the accounting policies in note 2(t).
Given that the respective considerations can only be collected upon the Group ’sw o r k
satisfactorily passing the customers ’ final inspection, the difference between the revenue
recognised based on the Group ’s accounting policies and the collection of consideration is
recognised as a contract asset until the Group ’s work satisfactorily passes the customers ’
final inspection. As at 31 December 2021, 2022 and 2023, project money held as contract
assets amounted to RMB509,127,000, RMB530,515,000 and RMB724,004,000
respectively.
The Group also typically agrees to retain 3% to 10% of the contract value as retention
money for one to five years upon the completion of work. These amounts are included in
contract assets until the end of the retention period as the Group ’s entitlement to these final
payments are conditional on the proper functioning of the Group ’s projects throughout the
retention period. As at 31 December 2021, 2022 and 2023, retention money held as
contract assets amounted to RMB4,335,000, RMB9,130,000 and RMB2,825,000
respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
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Contract assets are transferred to tr ade receivables when the rights become
unconditional.
Further details on the Group ’s credit policy and credit risk arising from contract assets
are set out in note 27(a).
(b) Contract liabilities
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Contract liabilities
B i l l i n g si na d v a n c eo fp e r f o r m a n c e ........................... 5 , 1 0 2 7 , 6 4 4 4 , 7 9 5
As at 31 December 2021, 2022 and 2023, billings in advance of performance are
expected to be recognised as income within one year.
16 Trade and other receivables
(a) Trade and other receivables of the Group
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Trade receivables
– c u r r e n t .......................................... 1 8 9 , 1 0 1 2 5 6 , 2 1 4 2 4 7 , 1 0 9
– n o n - c u r r e n t ....................................... 4 0 , 6 6 0 1 6 , 5 6 4 2 8 , 5 0 4
229,761 272,778 275,613
B i l l sr e c e i v a b l e ........................................ – 568 –
T r a d ea n db i l l sr e c e i v a b l e s ................................ 2 2 9 , 7 6 1 2 7 3 , 3 4 6 2 7 5 , 6 1 3
O t h e rr e c e i v a b l e s...................................... 2 4 , 6 8 3 1 4 , 6 3 0 9 , 8 7 2
L e s s :l o s sa l l o w a n c e .................................... ( 6 , 0 6 1 ) ( 1 5 , 4 1 2 ) ( 2 8 , 2 6 4 )
Trade and bills receivables and other receivables, net of loss allowance . . 248,383 272,564 257,221
Amounts due from related parties
(note 29(d)) ................... 1 6 6 1 2 , 5 7 4 1 0 9
C u r r e n tt a xp r e p a y m e n t.................................. –– 2,280
P r e p a y m e n tf o rl a b o u ra n ds e r v i c e s.......................... 5 , 4 1 4 2 8 , 8 6 2 2 , 0 0 6
P r e p a y m e n tf o rl i s t i n ge x p e n s e ............................. 1 6 9 2 , 1 3 3 4 , 8 2 2
D e f e r r e dV A Tr e f u n d.................................... 6 , 2 4 6 5 , 3 6 9 5 , 2 9 9
260,378 321,502 271,737
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 485 ---
Notes:
(i) Apart from the non-current trade receivables as stated above, all of the other trade and other
receivables are expected to b e recovered or recognised as expense within one year.
(ii) Bills receivable represented ou tstanding commercial acceptance bills. Bills receivable are due within
6 to 12 months from the date of issue of the bills.
(iii) As at 31 December 2021, 2022 and 2023, trade receivables and contract assets amounted to
RMB729,213,000, RMB793,043,000 and RMB624,886,000 were pledged as security for bank
borrowings (see note 22).
(iv) Other receivables represented tender bonds an d performance bonds which will be released to the
Group upon the award and the completion of t he relevant projects, as the case may be.
(v) As at 31 December 2022, prepayment for labour a nd services mainly consisted of prepayment to
project funds that will be used for the establishment of a research and development team and
purchase of equipment and raw materials.
Ageing analysis
As at 31 December 2021, 2022 and 2023, the ageing analysis of trade and bills
receivable, based on the transaction date or invoice date and net of loss allowance,
are as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n6m o n t h s .................................. 1 8 8 , 7 2 2 1 9 9 , 2 0 5 1 2 0 , 6 6 8
M o r et h a n6m o n t h sb u tw i t h i n1 2m o n t h s................. 2 2 , 1 1 7 3 7 , 2 3 9 8 8 , 1 3 5
M o r et h a n1 2m o n t h sb u tw i t h i n1 8m o n t h s................ 1 1 , 1 0 3 1 9 , 1 6 8 3 9 , 9 7 8
M o r et h a n1 8m o n t h sb u tw i t h i n2 4m o n t h s................ 2 , 3 7 1 1 3 , 4 1 5 1 3 , 5 7 0
M o r et h a n2 4m o n t h s .............................. 5 , 4 4 8 4 , 3 1 9 1 3 , 2 6 2
Trade and bills receivables ........................... 2 2 9 , 7 6 1 2 7 3 , 3 4 6 2 7 5 , 6 1 3
L e s s :l o s sa l l o w a n c e ............................... ( 4 , 8 1 8 ) ( 1 3 , 1 9 2 ) ( 2 5 , 6 1 8 )
224,943 260,154 249,995
Trade receivables related to project money from telecommunications
infrastructure services are normally due within 90 days from the date of billing. As at
31 December 2021, 2022 and 2023, project money receivable related to
telecommunications infrastructure services amounted to RMB73,049,000,
RMB72,623,000 and RMB69,712,000 respectively.
Trade receivables related to project money from digitalisation solution services
are normally due within 90 days from the completion of work, and the Group has
undertaken a few Integrated Solution Services projects for which a payment term of
three to five years have been granted, which were provided at the special request of
the customers. As at 31 December 2021, 2022 and 2023, project money receivable
r e l a t e dt od i g i t a l i s a t i o ns o l u t i o ns e r v i c e sa m o u n t e dt oR M B 1 4 9 , 1 5 3 , 0 0 0 ,
RMB184,927,000 and RMB175,224,000 respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 486 ---
Retention money is normally be settled within 90 days of the end of the retention
period. As at 31 December 2021, 2022 and 2023, retention money receivable
amounted to RMB2,741,000, RMB2,604,000 and RMB5,059,000 respectively.
Further details on the Group ’s credit policy and credit risk arising from trade
receivables are set out in note 27(a).
(b) Other receivables of the Company
Other receivables of the Company as at 31 December 2022 and 2023 are the
amounts due from its shareholders arising from the Reorganisation.
17 Prepayment for purchases of properties
The Group paid installments of RMB7,096,000 and RMB13,956,000 for purchase of certain
office units in Nanchang for office use for the years ended 31 December 2021 and 2022
respectively, in response to the anticipated growt h of its digitalisation so lution service business.
18 Pledged bank deposits
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Pledged for bank borrowings (note 22) .............. 1 , 0 5 4 1 , 0 7 6 1 , 1 1 0
Pledged for bank facilities (note 22) ................ 2 , 0 3 4 2 , 0 4 3 2 , 0 7 3
P l e d g e df o rl e t t e ro fg u a r a n t e e ................... 2 , 1 9 3 2 , 2 4 7 1 0
5,281 5,366 3,193
The pledged bank deposits will be released upon the settlement of bank borrowings and
the maturity of bank facilities and letter of guarantee.
19 Cash and cash equivalents and other cash flow information
(a) Cash and cash equivalents in the consolidated cash flow statements comprise:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
C a s ha tb a n ka n do nh a n d .................. 3 9 , 8 5 0 6 8 , 6 4 6 8 1 , 5 4 0
39,850 68,646 81,540
At 31 December 2021, 2022 and 2023, cash that is placed with banks in the Mainland
China amounted to RMB39,850,000, RMB81,539,000 and RMB54,859,000 respectively.
Remittance of funds out of Mainland China is subject to the relevant rules and regulations
of foreign exchange control promulgated by the PRC government.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 487 ---
(b) Reconciliation of profit before taxa tion to cash genera ted from/(used in)
operations:
Year ended 31 December
2021 2022 2023
Note RMB ’000 RMB ’000 RMB ’000
P r o f i tb e f o r et a x a t i o n ........................................... 4 0 , 9 1 9 3 8 , 9 4 0 7 0 , 0 1 0
Adjustments for:
D e p r e c i a t i o n .............................................. 6(c) 2,558 2,291 2,327
Interest expenses on bank borrowings and leases . . . . . . . . . . . . . . . . . . . . . . 6(a) 10,928 15,098 16,675
Interest income from bank deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (112) (119) (180)
Loss/(gain) on disposal of property, plant and equipment, other financial assets. . . 5 25 103 (2)
Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6(c) 3,759 10,842 11,694
S h a r eo fp r o f i t so fa s s o c i a t e s................................... 5 –– (74)
Foreign exchange loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– 31
Changes in working capital:
Decrease in inventories and other contract costs. . . . . . . . . . . . . . . . . . . . . . . 16,756 100 8,955
(Increase)/decrease in trade and other receivables . . . . . . . . . . . . . . . . . . . . . (90,903) (85,664) 27,337
(Increase)/decrease in non-current trade receivables . . . . . . . . . . . . . . . . . . . . (21,565) 17,236 (11,940)
Increase in contract assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,788) (27,673) (186,026)
Increase/(decrease) in trade and other payables . . . . . . . . . . . . . . . . . . . . . . . 100,764 (6,025) 120,090
Increase/(decrease) in contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,871 2,542 (2,849)
Decrease/(increase) in pledged deposits with banks . . . . . . . . . . . . . . . . . . . . . 2,591 (54) 2,237
Decrease in other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,568) (1,127) –
D e c r e a s ei nd e f e r r e di n c o m e .................................... ( 5 4 ) ( 5 4 ) ( 5 4 )
(Used in)/cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,819) (33,564) 58,231
(c) Reconciliation of liab ilities arising from financing activities
The table below details changes in the Group ’s liabilities from fin ancing activities,
including both cash and non-cash changes. Liabilities arising from financing activities are
liabilities for which cash flows were, or futur e cash flows will be, classified in the Group ’s
consolidated cash flow statement as cash flows from financing activities.
Bank
borrowings
Lease
Liabilities Total
RMB ’000 RMB ’000 RMB ’000
note 22 note 21
As at 1 January 2021 ......................... 207,706 361 208,067
Changes from financing cash flows:
P r o c e e d sf r o mn e wb a n kb o r r o w i n g s ................ 3 1 1 , 0 0 0 – 311,000
R e p a y m e n to fb a n kb o r r o w i n g s ................... ( 2 0 5 , 0 0 0 ) – (205,000)
I n t e r e s tp a i d ............................... ( 1 3 , 1 7 7 ) – (13,177)
C a p i t a le l e m e n to fl e a s er e n t a l sp a i d ............... – (384) (384)
I n t e r e s te l e m e n to fl e a s er e n t a l sp a i d............... – (8) (8)
T o t a lc h a n g e sf r o mf i n a n c i n gc a s hf l o w s ............. 92,823 (392) 92,431
Other changes
Interest expense (Note 6(a)) ..................... 1 0 , 9 2 0 8 1 0 , 9 2 8
Increase in lease liabilities from entering into
n e wl e a s e sd u r i n gt h ey e a r.................... – 134 134
As at 31 December 2021 ....................... 3 1 1 , 4 4 9 1 1 1 3 1 1 , 5 6 0
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 488 ---
Bank
borrowings
Lease
Liabilities Total
RMB ’000 RMB ’000 RMB ’000
note 22 note 21
As at 1 January 2022 ......................... 311,449 111 311,560
Changes from financing cash flows:
P r o c e e d sf r o mn e wb a n kb o r r o w i n g s ................ 4 0 7 , 0 0 0 – 407,000
R e p a y m e n to fb a n kb o r r o w i n g s ................... ( 3 4 3 , 0 0 0 ) – (343,000)
I n t e r e s tp a i d ............................... ( 1 5 , 3 4 4 ) – (15,344)
C a p i t a le l e m e n to fl e a s er e n t a l sp a i d ............... – (448) (448)
I n t e r e s te l e m e n to fl e a s er e n t a l sp a i d............... – (5) (5)
T o t a lc h a n g e sf r o mf i n a n c i n gc a s hf l o w s ............. 48,656 (453) 48,203
Other changes
Interest expense (note 6(a)) ..................... 1 5 , 0 9 3 5 1 5 , 0 9 8
Increase in lease liabilities from entering into
n e wl e a s e sd u r i n gt h ey e a r.................... – 395 395
As at 31 December 2022 ....................... 3 7 5 , 1 9 8 5 8 3 7 5 , 2 5 6
Bank
borrowings
Lease
Liabilities Total
RMB ’000 RMB ’000 RMB ’000
note 22 note 21
As at 1 January 2023 ......................... 3 7 5 , 1 9 8 5 8 3 7 5 , 2 5 6
Changes from financing cash flows:
P r o c e e d sf r o mn e wb a n kb o r r o w i n g s ................ 3 9 7 , 0 0 0 – 397,000
R e p a y m e n to fb a n kb o r r o w i n g s ................... ( 4 2 5 , 0 0 0 ) – (425,000)
I n t e r e s tp a i d ............................... ( 1 6 , 4 0 0 ) – (16,400)
C a p i t a le l e m e n to fl e a s er e n t a l sp a i d ............... – (172) (172)
I n t e r e s te l e m e n to fl e a s er e n t a l sp a i d............... – (15) (15)
T o t a lc h a n g e sf r o mf i n a n c i n gc a s hf l o w s ............. (44,400) (187) (44,587)
Other changes
Interest expense (note 6(a)) ..................... 1 6 , 6 6 0 1 5 1 6 , 6 7 5
Increase in lease liabilities from entering into
n e wl e a s e sd u r i n gt h ey e a r.................... – 388 388
As at 31 December 2023 ....................... 3 4 7 , 4 5 8 2 7 4 3 4 7 , 7 3 2
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 489 ---
20 Trade and other payables
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Trade payables
– t h i r dp a r t i e s ............................. 3 8 5 , 9 9 6 3 6 2 , 8 3 6 4 3 8 , 0 5 3
A c c r u e dp a y r o l l ............................. 4 , 8 6 5 3 , 4 9 7 4 , 0 4 9
Amounts due to shareholders (note 29(d)) ............ 1 , 1 7 6 1 2 , 1 4 3 1 4 4 , 8 6 1
Amounts due to associates (note 29(d)) .............. –– 7,350
O t h e rt a xp a y a b l e s........................... 4 8 , 1 8 7 5 4 , 1 2 8 7 6 , 1 8 6
O t h e rp a y a b l e sa n da c c r u a l s ..................... 3 , 3 1 6 4 , 9 4 7 7 , 0 1 4
443,540 437,551 677,514
Notes:
(i) The above trade and other payables are expected to be settled within one year or are repayable on
demand.
(ii) Other tax payables primarily comprised VAT payables.
As at 31 December 2021, 2022 and 2023, the ageing analysis of trade payables (which are
included in trade and other payables), based on the transaction date, is as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r ............................... 3 4 9 , 0 5 6 2 6 5 , 2 7 7 3 2 7 , 6 9 1
O v e r1y e a rb u tw i t h i n2y e a r s ................... 2 8 , 2 2 8 7 5 , 2 1 9 6 8 , 2 1 5
O v e r2y e a r sb u tw i t h i n3y e a r s ................... 1 , 9 0 5 1 3 , 6 4 2 2 0 , 9 3 8
O v e r3y e a r s ............................... 6 , 8 0 7 8 , 6 9 8 2 1 , 2 0 9
385,996 362,836 438,053
(i) As at 31 December 2021, 2022 and 2023, other non-current liabilities amounted to RMB1,127,000, nil and
nil are project money payable to labour suppliers, which is expected to be settled after more than one year.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 490 ---
21 Lease liabilities
As at 31 December 2021, 2022 and 2023, the le ase liabilities were repayable as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a ro ro nd e m a n d..................... 1 1 1 4 5 1 4 5
A f t e r1y e a rb u tw i t h i n2y e a r s ................... – 13 129
111 58 274
22 Bank borrowings
(a) The Group ’s bank borrowings are repayable as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a ro ro nd e m a n d................. 3 1 1 , 4 4 9 3 7 5 , 1 9 8 3 4 7 , 4 5 8
(b) Assets pledged as security and covenants for bank loans and overdrafts
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
U n s e c u r e db a n kb o r r o w i n g s ................. – 50,026 50,074
S e c u r e db a n kb o r r o w i n g s ................... 3 1 1 , 4 4 9 3 2 5 , 1 7 2 2 9 7 , 3 8 4
311,449 375,198 347,458
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 491 ---
The bank borrowings are secured by certa in assets of the Group and the carrying
amounts of these assets are as below:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Property, plant and equipment
(note 11) ............................ 1 9 , 8 9 7 1 8 , 8 1 9 1 9 , 8 2 7
Investment property (note 12) ................ 1 9 , 8 9 2 1 9 , 3 6 7 1 8 , 8 4 1
Trade receivables and contract
assets (note 16) ....................... 7 2 9 , 2 1 3 7 9 3 , 0 4 3 6 2 4 , 8 8 6
Bank deposits pledged for bank
borrowings (note 18) .................... 1 , 0 5 4 1 , 0 7 6 1 , 1 1 0
Bank deposits pledged for bank
facilities (note 18) ...................... 2 , 0 3 4 2 , 0 4 3 2 , 0 7 3
772,090 834,348 666,737
The amount of bank borrowings secured by assets of the Group and the shareholders,
or guaranteed by the shareholders and their close family member, the key management
personnel and their close family member of the Group (together, the ‘‘Affiliated
Individuals ’’) are as below:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Secured by trade receivables and contract
a s s e t so ft h eG r o u p .................................. – 170,090 170,223
Secured by trade receivables and contract
assets of the Group and guaranteed by
A f f i l i a t e dI n d i v i d u a l s .................................. 1 5 6 , 2 2 5 ––
Secured by trade receivables and contract
assets of the Group, secured by the properties
of shareholders and guaranteed by
A f f i l i a t e dI n d i v i d u a l s .................................. –––
Secured by trade receivables, contract assets, property, plant and
equipment and investment property of the Group, secured by the
p r o p e r t i e so fs h a r e h o l d e r sa n dg u a r a n t e e db yA f f i l i a t e dI n d i v i d u a l s .... 1 5 5 , 2 2 4 1 5 5 , 0 8 2 1 2 7 , 1 6 1
311,449 325,172 297,384
As of the date of this report, the securities from shareholders and guarantees from the
Affiliated Individuals have been released.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 492 ---
As at 31 December 2021, 2022 and 2023, the Group ’sb a n kb o r r o w i n g sf r o mC h i n a
Construction Bank Corporation, Nanchang Xihu Branch amounted to RMB155,224,000,
RMB155,082,000 and RMB127,161,000 are subjected to loan covenants based on
Zhonggan Communication ’s balance sheet ratios, as are commonly found in lending
arrangements with financial institutions. If Zhonggan Communication were to breach the
covenants, the bank borrowings would become payable on demand.
Zhonggan Communication ’s loan covenants based on its balance sheet ratios had
been breached as at 31 December 2021, 2022 and 2023.
Further details of the Group ’s management of liquidity risk are set out in note 27(b).
23 Deferred income
Government
grant
RMB’000
A t1J a n u a r y2 0 2 1....................................... 1 , 9 9 5
Amortisation credited to consolidated statement of profit or loss and
o t h e rc o m p r e h e n s i v ei n c o m e.............................. ( 5 4 )
A t3 1D e c e m b e r2 0 2 1a n d1J a n u a r y2 0 2 2 ...................... 1 , 9 4 1
Amortisation credited to consolidated statement of profit or loss and
o t h e rc o m p r e h e n s i v ei n c o m e.............................. ( 5 4 )
A t3 1D e c e m b e r2 0 2 2a n d1J a n u a r y2 0 2 3 ...................... 1 , 8 8 7
Amortisation credited to consolidated statement of profit or loss and
o t h e rc o m p r e h e n s i v ei n c o m e.............................. ( 5 4 )
A t3 1D e c e m b e r2 0 2 3 ..................................... 1 , 8 3 3
24 Employee retirement benefits
Defined contribution retirement plans
Pursuant to the relevant labour rules and regulations in the PRC, the Group ’s
subsidiaries in the PRC participate in defined contribution retirement benefit schemes (the
‘‘Schemes ’’) organised by the PRC municipal government authorities whereby the Group is
required to make contributions to the Schemes based on a percentage of the participating
employee ’s salaries. The local government authorities are responsible for the entire
pension obligations payable to retired employees.
The Group has no other material obligation for the payment of pension benefits
associated with the Schemes beyond the contributions described above.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 493 ---
25 Income tax in the consolidated st atements of financial position
(a) Movements of current taxation in the consolidated statements of financial
position:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
A tt h eb e g i n n i n go ft h ey e a r............................... 1 , 6 7 4 9 , 1 9 5 2 4 , 9 0 3
Provision for the year (note 7(a)) ............................ 9 , 9 4 8 1 8 , 8 3 1 ( 1 6 , 1 3 2 )
I n c o m et a xp a i d....................................... ( 2 , 4 2 7 ) ( 3 , 1 2 3 ) ( 9 , 7 9 3 )
A tt h ee n do ft h ey e a r ................................... 9 , 1 9 5 2 4 , 9 0 3 ( 1 , 0 2 2 )
Reconciliation to the consolidated statements
of financial position:
C u r r e n tt a xp a y a b l e ..................................... 9 , 1 9 5 2 4 , 9 0 3 1 , 2 5 8
Current tax prepayment (note 16(a)) .......................... –– (2,280)
9,195 24,903 (1,022)
(b) Deferred tax assets an d liabilities recognised:
(i) Movement of each component of de ferred tax assets and liabilities
Deferred tax arising from:
Accrued
expenses
Significant
financing
component
Credit loss
allowances
Depreciation
charge of
property,
plant and
equipment
Right-of-use
assets
Lease
liabilities
Deferred
income
Cumulative
tax losses Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
As at 1 January 2021 . . ............ 2 , 5 2 7 3 3 6 5 9 5 1 6 2 ( 5 8 ) 5 4 3 0 0 – 3,916
Credited/(charged) to profit or loss . . .... 4 , 3 1 0 3 7 3 5 6 3 ( 2 9 ) 3 0 ( 3 7 ) ( 8 ) – 5,202
As at 31 December 2021 and 1 January
2022 . . . . . . . . . . ............ 6 , 8 3 7 7 0 9 1 , 1 5 8 1 3 3 ( 2 8 ) 1 7 2 9 2 – 9,118
Credited/(charged) to profit or loss . . .... 1 3 , 7 1 5 ( 4 1 7 ) 1 , 6 2 7 ( 1 3 ) ( 2 9 ) ( 8 ) ( 9 ) – 14,866
As at 31 December 2022 and 1 January
2023 . . . . . . . . . . ............ 2 0 , 5 5 2 2 9 2 2 , 7 8 5 1 2 0 ( 5 7 ) 9 2 8 3 – 23,984
Credited/(charged) to profit or loss . . .... ( 1 8 , 9 4 8 ) ( 1 8 5 ) 1 , 6 7 7 ( 2 4 ) ( 1 5 ) 3 2 ( 8 ) – (17,471)
As at 31 December 2023 ............ 1 , 6 0 4 1 0 7 4 , 4 6 2 9 6 ( 7 2 ) 4 1 2 7 5 – 6,513
(ii) Reconciliation to the consolidated statement of financial position
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Net deferred tax asset in the consolidated statement of financial
p o s i t i o n ..................................... 9 , 1 1 8 2 3 , 9 8 4 6 , 5 1 3
APPENDIX I ACCOUNTANTS ’ REPORT
I – 53


--- page 494 ---
(c) Deferred tax liabilities not recognised
The Group did not recognise deferred tax liabilities in respect of the PRC dividend
withholding tax relating to certain undistributed profits of the PRC subsidiaries as at 31
December 2021, 2022 and 2023 since the Group controls the dividend policy of these
subsidiaries. Based on the assessment of the management, as of 31 December 2021, 2022
and 2023, the undistributed profits amoun ted to RMB56,680,000, RMB87,777,000 and
RMB99,924,000 would not be distributed in the foreseeable future.
26 Capital, reserves and dividends
(a) Movements in components of equity
The reconciliation between the opening and closing balances of the Group ’s
consolidated equity is set out in the consolidated statement of changes in equity. Details of
the changes in the Company ’s individual components of equity are set out below:
Share
capital
Share
premium
Other
reserve Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000
B a l a n c ea t2 0A p r i l2 0 2 2
(date of incorporation) ................ * –– *
Changes in equity for 2022:
Profit and total comprehensive income for the year –– 344 344
S h a r e si s s u e df o rr e o r g a n i s a t i o n ............ 8 2 1 2 , 1 1 9 – 12,201
Balance at 31 December 2022 and
1 January 2023 ..................... 8 2 1 2 , 1 1 9 3 4 4 1 2 , 5 4 5
Changes in equity for 2023:
Loss and total comprehensive income
f o rt h ey e a r........................ –– (336) (336)
S h a r e si s s u e df o rr e o r g a n i s a t i o n ............ 1 ( 7 ) – (6)
Balance at 31 December 2023 ............. 8 3 1 2 , 1 1 2 8 1 2 , 2 0 3
* The balances represent amounts less than RMB1,000.
(b) Share capital
The Company was incorporated in the Cayman Islands on 20 April 2022 with an
authorised share capital of HK$100,000 divided into 1,000,000 Shares with a par value of
HK$0.1 each.
Following its incorporation, the shares of the Company were allotted and issued to
shareholders of Zhonggan Communications as part of the Reorganisation set out in note 1.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 54


--- page 495 ---
On 15 May 2023, the shareholders of the Company approved the issue of 11,260
shares at subscription price of HK$0.1 per share. As a result of the share issue, the
Company had an authorised share capital of HK$101,126 divided into 1,011,260 shares.
Number of
shares
’000
A t2 0A p r i l2 0 2 2( d a t eo fi n c o r p o r a t i o n )..................... *
S h a r e si s s u e d....................................... 1 , 0 0 0
At 31 December 2022 and 1 January 2023. . . . . . . . . . . . . . . . . . . 1,000
S h a r e si s s u e d....................................... 1 1
A t3 1D e c e m b e r2 0 2 3 .................................. 1 , 0 1 1
* The balances represents less than 1,000.
(c) Share Premium
As at 31 December 2022 and 2023, share premium represented the amount of capital
excess of share capital that the Company ’s shareholders has promised to inject into the
Company as part of the Reorganisation set out in note 1.
(d) Nature and purpose of reserves
(i) Other reserve
As at 1 January 2021, 31 December 2021 and 2022, other reserve mainly
consisted of the paid-in capital of Zhonggan Communication.
On 23 August 2021, Zhonggan Communication held an extraordinary general
meeting, in which the shareholders of the Group approved the repurchase by
Zhonggan Communication of its 3,200,862 shares held by Gao Xin Hang Chuang. On
20 October 2021, Gao Xin Hang Chuang, Zhonggan Communication and its
shareholders entered into a supplemental agreement for share repurchase. Pursuant
to the supplemental agreement, Zhonggan Communication paid a total
RMB41,636,000 to Gao Xin Hang Chuang for the repurchase of its shares. The
consideration paid for the repurchase will reduce the share capital, PRC statutory
reserve and retained profits of Zhonggan Communication, which will reduce the other
reserve, PRC statutory reserve and retain profits of the Group.
On 14 April 2022, shareholders of Zhonggan Communication and Ms. Yeung Hoi
Ka entered into an investment agreement. Pursuant to the agreement, Ms. Yeung Hoi
Ka injected RMB5,241,000 to Zhonggan Communication in April 2022 in exchange for
655,226 shares of Zhonggan Communication. The consideration received on the
investment will increase share capital of Zhonggan Communication, which will
increase the other reserve of the Group.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 496 ---
On 14 April 2022, shareholders of Zhonggan Communication and Shenzhen
Youpo Business Consulting Partnership (Limited Partnership) ( ‘‘Y o uP oI n v e s t m e n t’’)
entered into an investment agreement. Pursuant to the agreement, You Po Investment
injected RMB22,440,000 to Zhonggan Communication in April 2022 in exchange for
2,805,000 shares of Zhonggan Communication. The consideration received on the
investment will increase share capital of Zhonggan Communication, which will
increase the other reserve of the Group.
On 22 August 2022, as part of the Reorganisation, Jiangxi Zhongge, an indirect
wholly-owned subsidiary of the4 Company, entered into an equity transfer agreement
with shareholders of Zhonggan Communication (the ‘‘Transferors ’’), pursuant to which
the Transferors agreed to transfer in aggregate approximately 98.9% of the equity
interest in Zhonggan Communication to Jiangxi Zhongge for a cash consideration of
RMB136,262,000. As Jiangxi Zhongge was newly established with insufficient capital,
certain of the Transferors and Jiangxi Zhongge entered into a waiver agreement to
waive the payment of a part of the consideration amounting to RMB124,142,000 which
increased the other reserve of the Group. On 20 February 2023, the remaining 1.1%
of the equity interest in Zhonggan Communication held by another shareholder was
transferred to Jiangxi Zhongge for a cash consideration of RMB3,575,000, which was
subsequently waived under a similar waiver agreement entered between the two
parties which increased the other reserve of the Group. Subsequently on 14
December 2023, the relevant shareholders and Jiangxi Zhongge and Zhonggan
Communication enter into termination agree ments to terminate the aforementioned
waiver agreements and revive the obligation of Jiangxi Zhongge to pay the above
considerations totaling RMB127,717,000 which decreased the other reserve of the
Group.
(ii) Statutory reserve
In accordance with the relevant PRC laws and regulations, the Group ’s
subsidiaries established in the PRC are required to transfer 10% of its net profit each
year to the statutory reserve until the reser ve reaches 50% of the registered capital.
The transfer to this reserve must be made before distributions to equity holders. This
reserve can be utilised in setting off accumulated losses or increase capital of the
subsidiary and is non-distributable other than in liquidation.
(e) Dividends
No dividends were paid or declared by the Company or any of its subsidiaries during
the Track Record Period.
(f) Capital management
The Group ’s primary objectives when managing capital are to safeguard the Group ’s
ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 56


--- page 497 ---
The Group actively and regularly reviews and manages its capital structure to
maintain a balance between the higher shareholder returns that might be possible with
higher levels of borrowings and the advantages and security afforded by a sound capital
position, and makes adjustments to the capital structure in light of changes in economic
conditions.
For the year ended 31 December 2021, 2022 and 2023, except as disclosed in note
22, neither the Company nor any of its subsidiaries are subject to any externally imposed
capital requirements.
27 Financial risk management and fair values of financial instruments
Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of
the Group ’s business.
The Group ’s exposure to these risks and the financial risk management policies and
practices used by the Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counte rparty will default on its contractual
obligations resulting in a financi al loss to the Group. The Group ’s exposure to credit
risk arising from cash and cash equivalents is limited because the counterparties are
banks, for which the Group considers to have a low credit risk. The Group ’sc r e d i tr i s k
is primarily attributable to trade receivables and contract assets and other receivables.
Trade receivables and contract assets comprise project money and retention
money. Project money is transferred from contract assets to trade receivables when
the Group ’s work satisfactorily passes inspection. Trade receivables related to project
money from telecommunications infrastructure services are normally due within 90
days from the date of billing. Trade receivables related to project money from
digitalisation solution services are normally due within three to five years. Retention
money is transferred from contract assets to trade receivables at the end of the
retention period (which is normally due within one to five years upon the completion of
work). Trade receivables related to retention money are normally due within 90 days
from the end of retention period. Normally, the Group does not obtain collateral from
customers.
The Group ’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer rather than the industry or country in which the
customers operate and therefore significant concentrations of credit risk primarily
arise when the Group has significant exposure to individual customers. As at 31
December 2021, 2022 and 2023, 79.12%, 72.12% and 69.66% of total trade
receivables and contract assets, respectively, were due from the Group ’s largest
customer in each year during the Track Record Period, and 98.63%, 99.04% and
98.90% of total trade receivables and contract assets, respectively, were due from the
five largest customers in each year during the Track Record Period.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 57


--- page 498 ---
The Group measures loss allowances for trade receivables and contract assets
at an amount equal to lifetime ECLs, which is calculated using a provision matrix.
When reasonable and supportable information to measure lifetime ECLs on individual
trade receivables and contract asset s is available, the Group measures loss
allowances for those trade receivables and contract assets on an individual basis. As
the Group ’s historical credit loss experience indicate different loss patterns between
project money and retention money, the loss allowance is further distinguished
between project money and retention money.
The following table provides information about the Group ’s exposure to credit risk
and ECLs for trade receivables and contract assets related to project money as at 31
December 2021, 2022 and 2023:
As at 31 December 2021
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 0 . 0 9 % 6 9 4 , 7 7 3 6 0 7
L e s st h a n6m o n t h sp a s td u e ............ 1 . 2 3 % 1 7 , 0 4 8 2 1 0
More than 6 months but less than 12 months
p a s td u e........................ 5 . 7 3 % 2 0 , 4 9 0 1 , 1 7 4
More than 12 months but less than 18 months
p a s td u e........................ 2 5 . 9 4 % 1 , 1 6 8 3 0 3
More than 18 months but less than 24 months
p a s td u e........................ 6 2 . 7 9 % 3 8 7 2 4 3
M o r et h a n2 4m o n t h sp a s td u e ........... 1 0 0 . 0 0 % 8 9 9 8 9 9
T o t a l ............................ 7 3 4 , 7 6 5 3 , 4 3 6
As at 31 December 2022
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 0 . 1 9 % 7 0 8 , 7 2 7 1 , 3 2 7
L e s st h a n6m o n t h sp a s td u e ............ 1 . 8 1 % 4 3 , 4 9 9 7 8 9
More than 6 months but less than 12 months
p a s td u e........................ 7 . 9 3 % 3 3 , 4 7 6 2 , 6 5 3
More than 12 months but less than 18 months
p a s td u e........................ 2 5 . 7 6 % 2 , 0 4 2 5 2 6
More than 18 months but less than 24 months
p a s td u e........................ 5 3 . 7 4 % 1 0 , 9 1 2 5 , 8 6 4
M o r et h a n2 4m o n t h sp a s td u e ........... 1 0 0 . 0 0 % 1 , 2 9 3 1 , 2 9 3
T o t a l ............................ 7 9 9 , 9 4 9 1 2 , 4 5 2
APPENDIX I ACCOUNTANTS ’ REPORT
I – 58


--- page 499 ---
As at 31 December 2023
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 0 . 1 8 % 8 3 1 , 5 8 7 1 , 4 8 2
L e s st h a n6m o n t h sp a s td u e ............ 2 . 0 4 % 3 8 , 4 6 8 7 8 6
More than 6 months but less than 12 months
p a s td u e........................ 8 . 4 0 % 1 9 , 6 6 4 1 , 6 5 2
More than 12 months but less than 18 months
p a s td u e........................ 2 4 . 7 6 % 2 0 6 5 1
More than 18 months but less than 24 months
p a s td u e........................ 4 7 . 9 7 % 2 , 6 1 4 1 , 2 5 4
M o r et h a n2 4m o n t h sp a s td u e ........... 1 0 0 . 0 0 % 6 , 1 4 9 6 , 1 4 9
898,688 11,374
Provision on individual basis (note) ......... 9 3 , 7 9 1 1 2 , 1 6 5
T o t a l ............................ 9 9 2 , 4 7 9 2 3 , 5 3 9
Note: During the year ended 31 December 2023, some of the trade receivables related to project
money from digitalisation solution services were modified with extended payment terms. In
general, the payment terms were extended for three months to two years from the original due
dates. In view of the renegotiated payment schedules, the Group had individually assessed the
loss allowances from these contracts.
The following table provides information about the Group ’s exposure to credit risk
and ECLs for trade receivables and contract assets related to retention money as at
31 December 2021, 2022 and 2023:
As at 31 December 2021
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 2 1 . 9 2 % 5 , 5 5 2 1 , 2 1 7
P a s td u e .......................... 4 0 . 0 0 % 4 , 5 6 8 1 , 8 2 7
T o t a l ............................ 1 0 , 1 2 0 3 , 0 4 4
APPENDIX I ACCOUNTANTS ’ REPORT
I – 59


--- page 500 ---
As at 31 December 2022
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 1 9 . 1 0 % 1 1 , 2 8 7 2 , 1 5 6
P a s td u e .......................... 4 0 . 0 0 % 4 , 3 3 9 1 , 7 3 6
T o t a l ............................ 1 5 , 6 2 6 3 , 8 9 2
As at 31 December 2023
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 1 9 . 8 8 % 3 , 5 2 6 7 0 1
P a s td u e .......................... 4 0 . 0 0 % 8 , 4 3 1 3 , 3 7 2
T o t a l ............................ 1 1 , 9 5 7 4 , 0 7 3
Expected loss rates are based on actua l loss experience over the recent past
years and forward-looking information. The se rates are adjusted to reflect differences
between economic conditions during the period over which the historic data has been
collected, current conditions and the Group ’s view of economic conditions over the
expected lives of the receivables.
Movement in the loss allowance account i nr e s p e c to ft r a d e receivables and
contract assets during the Track Record Period is as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
B a l a n c ea tt h eb e g i n n i n go ft h ey e a r .................... 3 , 2 1 7 6 , 4 8 0 1 6 , 3 4 4
I m p a i r m e n tl o s s e sr e c o g n i s e d......................... 3 , 2 6 3 9 , 8 6 4 1 1 , 2 6 8
B a l a n c ea tt h ee n do ft h ey e a r ........................ 6 , 4 8 0 1 6 , 3 4 4 2 7 , 6 1 2
The following changes in gross carrying amounts of trade receivables and
contract assets contributed to the increase in the loss allowance:
For trade receivables and contract assets related to project money, increases in
amounts past due led to an increase in loss allowance for 2021, 2022 and 2023.
Renegotiation of new payment schedules with certain customers related to the project
m o n e yf r o md i g i t a l i s a t i o ns o l u t i o ns e r v i c e sa l s or e s u l t e di na ni n c r e a s ei nl o s s
allowance for 2023.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 60


--- page 501 ---
For trade receivables and contract assets related to retention money, the
origination of new trade receivables resulted in an increase in loss allowance for
2022, while an increase in amounts past due led to an increase in loss allowance for
2023.
Other receivables
The following table provides information about the Group ’s exposure to credit risk
and ECLs for other receivables related to tender bonds and performance bonds at 31
December 2021, 2022 and 2023:
As at 31 December 2021
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 3 . 3 1 % 1 0 , 2 4 7 3 3 9
P a s td u e .......................... 1 0 0 . 0 0 % 9 0 4 9 0 4
T o t a l ............................ 1 1 , 1 5 1 1 , 2 4 3
As at 31 December 2022
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 4 . 7 8 % 9 , 2 8 4 4 4 4
P a s td u e .......................... 7 9 . 3 9 % 2 , 2 3 7 1 , 7 7 6
T o t a l ............................ 1 1 , 5 2 1 2 , 2 2 0
As at 31 December 2023
Expected
loss rate
Gross
carrying
amount
Loss
allowance
%R M B ’000 RMB ’000
C u r r e n t ........................... 5 . 5 4 % 4 , 2 2 1 2 3 4
P a s td u e .......................... 5 1 . 9 5 % 4 , 6 4 3 2 , 4 1 2
T o t a l ............................ 8 , 8 6 4 2 , 6 4 6
APPENDIX I ACCOUNTANTS ’ REPORT
I – 61


--- page 502 ---
In determining ECLs for other receivables related to tender bonds and
performance bonds, the management of the Group has taken into account the
historical default experience and forward-looking information, as appropriate. The
management of the Group has assessed that the risk of default of other receivables
was not material.
(b) Liquidity risk
The Group ’s policy is to regularly monitor its liquidity requirements and
communicate with major financial institutions to ensure that it maintains sufficient
reserves of cash and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
The following tables show the remai ning contractual maturities as at 31
December 2021, 2022 and 2023 of the Group ’s financial liabilitie s, which are based
on contractual undiscounted cash flows (including interest payments computed using
contractual rates or, if floating, based on rates current at the end of the reporting
period) and the earliest date the Group can be required to pay.
As at 31 December 2021
Contractual undiscounted cash outflow
Within 1
year or on
demand
More than 1
year but
less than 2
years Total
Carrying
amount
RMB ’000 RMB ’000 RMB ’000 RMB ’000
B a n kb o r r o w i n g s ................... 3 1 8 , 5 9 8 – 318,598 311,449
T r a d ep a y a b l e s ................... 3 8 5 , 9 9 6 – 385,996 385,996
Amounts due to shareholders . . . . . . . . . . 1,176 – 1,176 1,176
Other payables and accruals . . . . . . . . . . . 51,503 – 51,503 51,503
L e a s el i a b i l i t i e s ................... 1 1 4 – 114 111
O t h e rn o n - c u r r e n tl i a b i l i t i e s ............ – 1,134 1,134 1,127
757,387 1,134 758,521 751,362
APPENDIX I ACCOUNTANTS ’ REPORT
I – 62


--- page 503 ---
As at 31 December 2022
Contractual undiscounted cash outflow
Within 1
year or on
demand
More than 1
year but
less than 2
years Total
Carrying
amount
RMB ’000 RMB ’000 RMB ’000 RMB ’000
B a n kb o r r o w i n g s ................... 3 8 2 , 8 4 6 – 382,846 375,198
T r a d ep a y a b l e s ................... 3 6 2 , 8 3 6 – 362,836 362,836
Amounts due to shareholders . . . . . . . . . . 12,143 – 12,143 12,143
Other payables and accruals . . . . . . . . . . . 59,075 – 59,075 59,075
L e a s el i a b i l i t i e s ................... 4 6 1 3 5 9 5 8
816,946 13 816,959 809,310
As at 31 December 2023
Contractual undiscounted cash outflow
Within 1
year or on
demand
More than 1
year but
less than 2
years Total
Carrying
amount
RMB ’000 RMB ’000 RMB ’000 RMB ’000
B a n kb o r r o w i n g s ................... 3 4 7 , 4 5 8 – 347,458 347,458
T r a d ep a y a b l e s ................... 4 3 8 , 0 5 3 – 438,053 438,053
Amounts due to shareholders . . . . . . . . . . 144,861 – 144,861 144,861
A m o u n t sd u et oa s s o c i a t e s ............ 7 , 3 5 0 – 7,350 7,350
Other payables and accruals . . . . . . . . . . . 83,201 – 83,201 83,201
L e a s el i a b i l i t i e s ................... 1 4 5 1 3 1 2 7 6 2 7 4
1,021,068 131 1,021,199 1,021,197
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Group ’s
interest rate risk arises primarily from loans and borrowing. Borrowings issued at
variable rates and fixed rates expose the Group to cash flow interest rate risk and fair
value interest rate risk respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 63


--- page 504 ---
(i) Interest rate profile
The following table details the interest rate profile of the Group ’s loans and
borrowings at the end of each reporting period:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Fixed rate borrowings:
B a n kb o r r o w i n g s ............................. ( 1 5 5 , 2 2 4 ) ( 2 0 5 , 1 0 8 ) ( 1 7 7 , 2 3 5 )
Lease liabilities . . . .......................... ( 1 1 1 ) ( 5 8 ) ( 2 7 4 )
(155,335) (205,166) (177,509)
Variable rate borrowings:
B a n kb o r r o w i n g s ............................. ( 1 5 6 , 2 2 5 ) ( 1 7 0 , 0 9 0 ) ( 1 7 0 , 2 2 3 )
(ii) Sensitivity analysis
As at 31 December 2021, 2022 and 2023, it is estimated that a general
increase/decrease of 100 basis points in interest rates, with all other variables
held constant, would have decreased/increased the Group ’s profit for the year
and retained profits by approxim ately RMB1,328,000, RMB1,446,000 and
RMB1,447,000 respectively.
The sensitivity analysis above indicates the instantaneous change in the
Group ’s profit for the year and retained profits that would arise assuming that the
change in interest rates had occurred at the end of the reporting period and had
been applied to those financial instruments held by the Group which expose the
Group to cash flow interest rate risk at the end of the reporting period. The
analysis is performed on the same basis during the Track Record Period.
(d) Currency risk
The Group has no significant foreign exchange exposure as substantially all of
the Group ’s transactions are denominated in RMB.
(e) Fair value measurement
The carrying amounts of the Group ’s financial instruments measured at
amortised cost are not materially different from their fair values as at 31 December
2021, 2022 and 2023.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 64


--- page 505 ---
28 Capital commitments
Capital commitments outstanding at 31 December 2021, 2022 and 2023 for property, plant
and equipment, which was not provided in the Historical Financial Information were as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
C o n t r a c t e df o rp r o p e r t y ,p l a n ta n de q u i p m e n t................... 6 , 9 6 9 4 5 3 –
29 Material related party transactions
(a) Name and relationship with related parties
During the Track Record Period, the directors are of the view that the following are
major related parties of the companies now comprising the Group:
Name of party Relationship
Mr. Liu Haoqiong Controlling shareholder of the Group
Ms. T ao Xiulan Controlling s hareholder of the Group
GT & Yangtze Limited Company owned as to 70.0% by Mr. Liu
Haoqiong and as to 30.0% by Ms. T ao
Xiulan, respectively
Mr. Liu Dingli Non-controlling shareholder of the Group
Huat Huat Limited Company wholly-owned by Mr. Liu Dingli
Mr. Liu Dingyi Non-controlling shareholder of the Group
Octuple Hills Limited Company wh olly-owned by Mr. Liu Dingyi
Ms. Yeung Hoi Ka Non-controlling shareholder of the Group
Y o uP oC o m m e r c eL i m i t e d(‘‘You Po
BVI’’)
Non-controlling shareholder of the Group
Ying Hua Investment Management
Limited ( ‘‘Ying Hua BVI ’’)
Non-controlling shareholder of the Group
Shu Zhi Shen Kong Investment Limited
(‘‘Shu Zhi Cayman ’’)
Non-controlling shareholder of the Group
Rui Da Xin T ao Capital Management
Centre Limited ( ‘‘Rui Da BVI ’’)
Non-controlling shareholder of the Group
You Po Investment Parent company of You Po BVI
Gongqingcheng Ying Hua Investment
Management Partnership (Limited
Partnership) ( ‘‘Ying Hua
Investment ’’)
Parent company of Ying Hua BVI
Hainan Shu Zhi Shen Kong Investment
Partnership (Limited Partnership)
(‘‘Shu Zhi Shen Kong ’’)
Parent company of Shu Zhi Cayman
APPENDIX I ACCOUNTANTS ’ REPORT
I – 65


--- page 506 ---
Name of party Relationship
Beijing Rui Da Xin T ao Capital
Management Centre (Limited
Partnership) ( ‘‘Rui Da Xin Tao ’’)
Parent company of Rui Da BVI
Jian Qingyoupu Information
T echnology Limited
Associate of the Group
Jiangxi Wanpuxing Information
T echnology Limited
Associate of the Group
Ms. T ao Hailan Close family member of the controlling
shareholder, Ms. T ao Xiulan
Ms. Zou Haiqin Close family member of a key management
personnel, Mr. Zhou Zhiqiang
Ms. Chen Jingyuan Close family member of a key management
personnel, Mr. Xiao Wei
Ms. Xiao Haiyan Key management personnel
Mr. Zhang Jimao Key management personnel
Mr. Wang Chaoguo Key management personnel
Mr. Chen Wenjie Key management personnel
Mr. Zhou Zhiqiang Key management personnel
Mr. Huang Linjiang Key management personnel
Mr. Wang Hao Key management personnel
Ms. Chai Wenxin Key management personnel
Mr. Xiao Wei Key management personnel
(b) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to
the Company ’s directors as disclosed in note 8 and certain of the highest paid employees
as disclosed in note 9, is as follows:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
S h o r t - t e r me m p l o y e eb e n e f i t s .............................. 3 , 6 8 5 4 , 7 8 0 3 , 1 8 9
C o n t r i b u t i o n st od e f i n e dc o n t r i b u t i o nr e t i r e m e n tp l a n ................ 7 2 9 0 8 9
3,757 4,870 3,278
T otal remuneration is included in ‘‘staff costs ’’(see note 6(b)).
APPENDIX I ACCOUNTANTS ’ REPORT
I – 66


--- page 507 ---
(c) Material transactions with related parties
In addition to the related party informati on disclosed elsewhere in this Historical
Financial Information, the Group enter into the f ollowing material related party transactions
during the Track Record Period:
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Non-recurring transactions:
Non-trade related:
Repayment from/advance from related parties
– M r .L i uH a o q i o n g ..................................... –– 86,042
– M r .L i uD i n g l i ....................................... – 246 9,995
– M s .T a oX i u l a n ...................................... –– 36,645
– M r .L i uD i n g y i....................................... –– 13,365
– M s .Y e u n gH o iK a.................................... –– 1,378
– M s .T a oH a i l a n ...................................... 4 2 4 4 –
– M s .X i a oH a i y a n ..................................... 7 ––
– M r .Z h a n gJ i m a o..................................... – 45 –
– M r .W a n gH a o ....................................... – 104 33
– M r .W a n gC h a o g u o .................................... 5 0 ––
– M sC h a iW e n x i n ..................................... – 104 40
– M r .X i a oW e i ........................................ 1 5 2 8 0 –
– M r .H u a n gL i n j i a n g .................................... 1 0 0 ––
– Y o uP oI n v e s t m e n t .................................... – 5,899 –
– Y i n gH u aI n v e s t m e n t ................................... – 3,589 –
– S h uZ h iS h e nK o n g................................... – 1,842 –
– R u iD aX i nT a o...................................... – 789 –
– Y o uP oB V I ........................................ –– 6,067
– Y i n gH u aB V I ....................................... –– 3,691
– S h uZ h iC a y m a n..................................... –– 1,895
– R u iD aB V I ......................................... –– 812
– J i a nQ i n g y o u p uI n f o r m a t i o nT e c h n o l o g yL i m i t e d................. –– 2,450
– J i a n g x iW a n p u x i n gI n f o r m a t i o nT e c h n o l o g yL i m i t e d............... –– 4,900
351 12,742 167,313
APPENDIX I ACCOUNTANTS ’ REPORT
I – 67


--- page 508 ---
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Repayment to/advance to related parties
– M r .L i uH a o q i o n g ..................................... – 1,152 14,500
– M r .L i uD i n g l i ....................................... – 246 206
– M s .T a oH a i l a n ...................................... 1 1 4 ––
– M r .Z h a n gJ i m a o..................................... 4 5 ––
– M r .H u a n gL i n j i a n g .................................... 1 0 0 ––
– M r .W a n gH a o ....................................... – 104 33
– M r .W a n gC h a o g u o .................................... 5 0 ––
– M s .C h a iW e n x i n..................................... 3 1 0 1 4 0
– M r .X i a oW e i ........................................ 1 9 4 3 4 –
– Y o uP oB V I ........................................ – 6,067 –
– Y i n gH u aB V I ....................................... – 3,691 –
– S h uZ h iC a y m a n..................................... – 1,895 –
– R u iD aB V I ......................................... – 812 –
– G T&Y a n g t z eL i m i t e d .................................. – 68 –
– H u a tH u a tL i m i t e d .................................... – 6 –
– Octuple Hills Limited ................................... 6 1
– M s .Y e u n gH o iK a.................................... – 1 –
506 14,183 14,780
For the year ended 31 December 2023, increases in non-recurring transactions
relevant to related parties were mainly due t o the termination of waiver agreements (see
note 26(d)(i)).
(d) Balances with related parties
(i) Amounts due from related parties
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Non-trade related
Other receivables
– M s .T a oH a i l a n ................................. 7 2 2 8 2 8
– M s .C h a iW e n x i n................................ 3 ––
– M r .X i a oW e i ................................... 4 6 ––
– M r .Z h a n gJ i m a o................................ 4 5 ––
– Y o uP oB V I ................................... – 6,067 –
– Y i n gH u aB V I .................................. – 3,691 –
– S h uZ h iC a y m a n................................ – 1,895 –
– R u iD aB V I .................................... – 812 –
– G T&Y a n g t z eL i m i t e d ............................. – 68 68
– H u a tH u a tL i m i t e d ............................... – 66
– Octuple Hills Limited. ............................. – 67
– M s .Y e u n gH o iK a............................... – 1 –
166 12,574 109
APPENDIX I ACCOUNTANTS ’ REPORT
I – 68


--- page 509 ---
For the year ended 31 December 2023, movements of amounts due from related
parties were mainly due to receive the investment funds from shareholders.
(ii) Amounts due to related parties
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Non-trade related
Other payables
– M r .L i uH a o q i o n g ................................ 1 , 1 5 2 – 71,542
– M r .L i uD i n g l i .................................. 2 4 2 4 9 , 8 1 3
– M s .T a oX i u l a n ................................. –– 36,645
– M r .L i uD i n g y i.................................. –– 13,365
– M s .Y e u n gH o iK a............................... –– 1,377
– Y o uP oI n v e s t m e n t ............................... – 5,899 5,899
– Y i n gH u aI n v e s t m e n t .............................. – 3,589 3,589
– S h uZ h iS h e nK o n g . .............................. – 1,842 1,842
– R u iD aX i nT a o . ................................. – 789 789
– J i a nQ i n g y o u p uI n f o r m a t i o nT e c h n o l o g yL i m i t e d............ –– 2,450
– J i a n g x iW a n p u x i n gI n f o r m a t i o nT e c h n o l o g yL i m i t e d.......... –– 4,900
1,176 12,143 152,211
The balance with these related parties are unsecured, interest free and have no fixed
repayment terms.
For the year ended 31 December 2023, movements of amounts due to related parties
were mainly due to the termination of waiver agreements (see note 26(d)(i)).
As of the date of this report, all of the non- trade amounts due from/to related parties
have been settled.
(e) Bank borrowings guaranteed by related parties
As at 31 December
2021 2022 2023
RMB ’000 RMB ’000 RMB ’000
Non-trade in nature
Bank borrowings guaranteed by
– M r .L i uH a o q i o n ga n dM s .T a oX i u l a n ........................ –––
– Mr. Liu Haoqiong, Ms. T ao Xiulan and
M r .L i uD i n g y i..................................... 1 5 6 , 2 2 5 ––
– M s .T a oH a i l a n ,M r .X i a oW e ia n dM s .C h e nJ i n g y u a n ............. – 64,034 127,161
– Mr. Liu Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli,
Mr. Liu Dingyi, Ms. T ao Hailan, Mr. Zhou Zhiqiang
a n dM s .Z o uH a i q i n ,M r .X i a oW e i ........................ 1 5 5 , 2 2 4 9 1 , 0 4 8 –
311,449 155,082 127,161
APPENDIX I ACCOUNTANTS ’ REPORT
I – 69


--- page 510 ---
As of the date of this report, all of the guarantees provided by related parties have
been released.
30 Immediate and ultimate controlling party
As at 31 December 2021, 2022 and 2023, the directors considered the ultimate controlling
shareholder of the Group to be Mr. Liu Haoqiong and Ms. T ao Xiulan. As at 31 December 2023,
the immediate controlling shareholder of the Company is GT & Yangtze Limited, which was
incorporated in the BVI and does not produce financial statements available for public use.
31 Possible impact of amendments, new stan dards and interpretations issued but not
yet effective for the year ended 31 December 2023
Up to the date of issue of this Historical Finan cial Information, the HKICPA has issued a
number of new or amended standards, which are not yet effective for the year ended 31
December 2023 and which have not been adopted in the Historical Financial Information. These
include the following:
Effective for
accounting
periods beginning
on or after
Amendments to HKAS 1, Presentation of financial statements:
Classification of liabilities as current or non-current . . . . . . . . . . . 1 January 2024
Amendments to HKAS 1, Presentation of financial statements:
Non-current liabilities with covenants . . . . . . . . . . . . . . . . . . . . . 1 January 2024
Amendments to HKAS 1, Non-current Liabilities with Covenants . . . 1 January 2024
Amendments to HKAS 7, Statement of cash flows and HKFRS 7,
Financial Instruments: Disclosures: Supplier finance arrangements 1 January 2024
Amendments to HKAS 21, The effects of changes in foreign
exchange rates: Lack of exchangeability . . . . . . . . . . . . . . . . . . . 1 January 2025
Amendments to HKFRS 10 and HKAS 28, Sale or contribution of
assets between an investor and its associate or joint venture . . . . T o be decided
The Group is in the process of making an assessment of what the impact of these
amendments, new standards and interpretations is expected to be in the period of initial
application. So far, the Group has concluded that the adoption of them is unlikely to have a
significant impact on the Group ’s consolidated financial statements.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 70


--- page 511 ---
32 Subsequent events after the reporting period
In early 2024, the relevant shareholders contributed approximately RMB127,717,000 to the
Group and the amounts due to relevant shareholders of RMB127,717,000 arising from the
termination of waiver agreements with relevant shareholders (see note 26(d)(i)) was settled on 3
April 2024.
Aside from the above, no significant subsequent events have occurred to the Group since
the end of the period reported on.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries
comprising the Group in respect of any period subsequent to 31 December 2023.
APPENDIX I ACCOUNTANTS ’ REPORT
I – 71


--- page 512 ---
The following information does not form part of the Accountants ’ Report received from the
Company ’s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, as set out
in Appendix I to this prospectu s, and is included herein for illustrative purposes only.
The unaudited pro forma financial information should be read in conjunction with the
section headed ‘‘Financial information ’’ in this prospectus and the historical financial information
included in the Accountants ’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of our Group
is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below to illustrate
the effect of the Global Offering on the consolidated net tangible assets of the Group attributable
to the equity shareholders of the Company as at 31 December 2023 as if the Global Offering
had taken place on 31 December 2023.
The unaudited pro forma statement of adjusted net tangible assets has been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture of
the financial position of the Group had the Global Offering been completed as at 31 December
2023 or at any future date.
Consolidated
net tangible
assets of the
Group
attributable to
equity
shareholders
of the
Company
as at
31 December
2023
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma
adjusted
consolidated
net tangible
assets
attributable to
equity
shareholders
of the
Company
Unaudited pro forma adjusted
consolidated net tangible
assets attributable to equity
shareholders of the Company
per Share
RMB ’000 RMB ’000 RMB ’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price of HK$1.13 per Offer
S h a r e ........................... 1 2 8 , 2 2 2 1 3 6 , 6 6 7 2 6 4 , 8 8 9 0 . 4 1 0 . 4 6
Based on an Offer Price of HK$1.25 per Offer
S h a r e ........................... 1 2 8 , 2 2 2 1 5 3 , 2 4 8 2 8 1 , 4 7 0 0 . 4 4 0 . 4 8
Notes:
(1) The consolidated net tangible assets of the Group attributable to equity shareholders of the Company as at
31 December 2023 is calculated based on the total equity attributable to equity shareholders of the
Company as at 31 December 2023 of RMB128,222,000, which is derived from the Accountants ’ Report as
set out in Appendix I to this Prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 1


--- page 513 ---
(2) The estimated net proceeds from the Global Offer ing are based on the expected issuance of 160,000,000
Shares and the indicative Offer Prices of HK$1.13 per Share (being the minimum Offer Price) and HK$1.25
per Share (being the maximum Offer Price), after deduction of the estimated underwriting fees and other
related expenses related to the Global Offering paid or payable by the Group (excluding the listing expenses
of RMB15,732,000 that have been charged to profit or loss during the Track Record Period), and does not
take into account any shares which may be issued upon the exercise of the Over-allotment Option or any
shares which may be issued pursuant to the general mandate.
The estimated net proceeds of the Global Offering have been converted to Renminbi at the PBOC rate of
HK$1.10 to RMB1.00. No representation is made that Hong Kong dollars amount have been, could have
been or may be converted to Renminbi, or vice versa, at that rate or at any other rate.
(3) The unaudited pro forma adjusted net tangible assets attributable to equity shareholders of the Company
per Share is arrived at by dividing the unaudited pro forma adjusted net tangible assets attributable to equity
shareholders of the Company by 640,000,000 Shares, being the number of shares expected to be in issue
following the completion of the Capitalisation Issue and the Global Offering, and does not take into account
any shares which may be issued upon the exercise of the Over-allotment Option or any shares which may
be issued pursuant to the general mandate.
(4) The unaudited pro forma adjusted net tangible assets per Share attributable to equity shareholders of the
Company per Share amounts in RMB are converted to Hong Kong dollar with the PBOC rate of RMB1.00 to
HK$1.10 prevailing on 31 December 2023. No representation is made that Renminbi amount have been,
could have been or may be converted to Hong Kong dollars, or vice versa, at that rate or any other rate.
(5) The Group ’s property interests located in the People ’s Republic of China (the ‘‘PRC’’) as at 31 May 2024
have been valued by HG Appraisal & Consulting Limited, an independent property valuer, and the full text of
the valuation report is set out in Appendix III to this Prospectus. The above unaudited pro forma statement
of adjusted net tangible assets does not take into account the surplus arising from the revaluation of the
Group ’s property interests. The revaluation surplus has not been recorded in the historical financial
information of the Group as at 31 December 2023 and will not be recorded in the consolidated financial
statements of the Group in future periods as the Group ’s investment property is stated at cost less
accumulated depreciation and impairment loss, if any. Had such property interests as at 31 December 2023
been recorded at the value as stated in the valuation report set out in Appendix III to this prospectus,
addition annual depreciation of approximately RMB497, 000 would be charged against the profit in the future
periods.
(6) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to equity
shareholders of the Company to reflect any trading result or other transactions of the Group entered into
subsequent to 31 December 2023, including but not limited to the provision of RMB127,717,000 to the
Group and the settlement of amounts due to the rel evant shareholders on 3 April 2024 arising from
termination of waiver agreement with relevant shareholders. Had such provision of funds and termination
been completed on 31 December 2023, the unaudited pro forma adjusted net tangible assets attributable to
equity shareholders of the Company would have been increased by RMB127,717,000, and the unaudited
pro forma adjusted consolidated net tangible assets a ttributable to equity shareholders of the Company per
Share would have been increased by approximately RMB0.20 (equivalent to HK$0.22).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 2


--- page 514 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group ’s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS ’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF ZHONGGAN COMMUNICATION (GROUP) HOLDINGS LIMITED
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Zhonggan Communication (Group) Holdings Limited (the ‘‘Company ’’)
and its subsidiaries (collectively the ‘‘Group ’’) by the directors of the Company (the ‘‘Directors ’’)
for illustrative purposes only. The unaudited pr o forma financial information consists of the
unaudited pro forma statement of adjusted net tangible assets as at 31 December 2023 and
related notes as set out in Part A of Appendix II to the prospectus dated 21 June 2024 (the
‘‘Prospectus ’’) issued by the Company. The applicable criteria on the basis of which the
Directors have compiled the pro forma financial information are described in Part A of Appendix
II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the ordinary shares of the Company (the ‘‘Global Offering ’’)
on the Group ’s financial position as at 31 December 2023 as if the Global Offering had taken
place at 31 December 2023. As part of this process, information about the Group ’s financial
position as at 31 December 2023 has been extracted by the Directors from the Group ’sh i s t o r i c a l
financial information included in the Accountants ’ Report as set out in Appendix I to the
Prospectus.
Directors ’ Responsibilities for the Pro Forma Financial Information
The Directors are res ponsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the ‘‘Listing Rules ’’) and with reference to Accounting
Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars ’’ (‘‘AG 7 ’’) issued by the Hong Kong Institute of Certified Public Accountants
(‘‘HKICPA’’).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 3


--- page 515 ---
The 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 inform ation beyond that owed to those to whom those
reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements ( ‘‘HKSAE ’’)3 4 2 0 ‘‘Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus ’’ issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financ ial 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 pro forma financial information included in an investment circular is solely
to illustrate the impact of a significant event or tran saction on unadjusted fin ancial information of
the Group as if the event had occurred or the transaction had been undertaken at an earlier date
selected for purposes of the illustration. Accordingly, we do not provide any assurance that the
actual outcome of events or transactions as at 31 December 2023 would have been as
presented.
A reasonable assurance engagement to repor t on whether the pro forma financial
information has been properly compiled on th e 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 event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give app ropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those adjustments
to the unadjusted financial information.
The procedures selected depend on the reporting accountants ’ judgement, having regard to
the reporting accountants ’ understanding of the nature of the Group, the event or transaction in
respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 4


--- page 516 ---
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in
the United States of America, auditing standar ds of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as if
they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company ’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed ‘‘Future Plans and Use of
Proceeds ’’in the Prospectus.
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 purposes of the pro forma financial information
as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
8th Floor, Prince ’s Building
10 Chater Road
Central, Hong Kong
21 June 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
II – 5


--- page 517 ---
The following is the text of a letter and a valuation certificate, prepared for the purpose of
incorporation in this prospectus received from HG Appraisal & Consulting Limited, an
independent valuer, in connection with its valuation as at 31 May 2024 of the property interests
of the Group.
HG Appraisal & Consulting Limited
17th Floor
80 Gloucester Road
Wanchai
Hong Kong
21 June 2024
The Board of Directors
Zhonggan Communication (Group) Holdings Limited
Room 101, Block 99
2799 Tianxiang Avenue
Nanchang Jiahai Industrial Park
Nanchang High-tech Industrial Development Zone
Nanchang City
Jiangxi Province, the PRC
Dear Sirs
INSTRUCTIONS, PURPOSE & VALUATION DATE
In accordance with the instructions of Zhonggan Communication (Group) Holdings Limited
(the ‘‘Company ’’) for us to value the property interest held by the Company and its subsidiaries
(hereinafter referred to as the ‘‘Group ’’) in the People ’s Republic of China (the ‘‘PRC ’’), we
confirm that we have carried out inspections, made relevant enquiries and obtained such further
information as we consider necessary for the purpose of providing you with our opinion of the
market value of such property interests as at 31 May 2024 (the ‘‘Valuation Date ’’)f o rt h e
purpose of incorporating into the prospectus.
BASIS OF VALUATION
Our valuation is prepared in accordance with the HKIS Valuation Standards 2020 published
by the Hong Kong Institute of Surveyors (HKIS) and the requirements set out in Chapter 5 and
Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange
of Hong Kong Limited.
Our valuation is our opinion of the market value of the property interest which we would
define market value as intended to mean ‘‘the estimated amount for which an asset or liability
should exchange on the valua tion date between a willing buyer and a willing seller in an arm ’s
length transaction after proper marketing and where the parties had each acted knowledgeably,
prudently and without compulsion ’’.
APPENDIX III PROPERTY VALUATION REPORT
III – 1


--- page 518 ---
VALUATION METHODOLOGY
In valuing the property interest, the Property has been valued by Income Capitalisation
Approach. The Income Capitalisation Approach is a valuation method commonly applied for
investment property. The rental income derived from the existing tenancies are capitalised for
their respective unexpired terms of the contractual tenancies while vacant units are assumed to
be let at their respective market rents at the date of valuation. Upon expiry of the existing
tenancies, each unit is assumed to be let at its current market rent as at the Valuation Date,
which is then capitalised for the remaining term of the land use rights of the property. The sum
of the capitalised value of the term income, the re versionary incomes as appropriately deferred
and the vacant units provides the market value of the property.
VALUATION ASSUMPTIONS
Our valuation has been made on the assumption that the owner sells the property interest
on the open market in their existing states without the benefit of a deferred terms contract,
leaseback, joint venture, management agreement or any similar arrangement which would serve
to increase the value of the property interest. In addition, no forced sale situation in any manner
is assumed in our valuation.
We have not caused title searches to be made for the property interest at the relevant
government bureau in the PRC. We have been provided with certain extracts of title documents
relating to the property interest in the PRC. However, we have not inspected the original
documents to verify the ownership, encumbrances or the existence of any subsequent
amendments which may not appear on the copies handed to us. In undertaking our valuation
for the property interest, we have relied on the legal opinion provided by the Company ’sP R C
legal advisers, JunZeJun Law Offices (the ‘‘PRC Legal Opinion ’’).
We have relied to a considerable extent on information provided by the Company and have
accepted advice given to us by the Company on such matters as planning approvals or statutory
notices, easements, tenure, occupation, lettings, site and floor areas and in the identification of
the property and other relevant matter. We have also been advised by the Company that no
material facts had been concealed or omitted in the information provided to us. All documents
have been used for reference only.
All dimensions, measurements and areas included in the valuation certificate are based on
information contained in the documents provided to us by the Company and are approximations
only. No on-site measurement has been taken.
We have inspected the exterior and, where possible, the interior of the property. However,
we have not carried out a structural survey nor have we inspected woodwork or other parts of
the structures which are covered, unexposed or inaccessible and we are therefore unable to
report that any such parts of the property is free from defect. No tests were carried out on any of
the services.
No allowance has been made in our valuation for any charges, mortgages or amounts
owing on the property interest nor for any expenses or taxation which may be incurred in
effecting a sale. Unless otherwise stated, it is assumed that the property interest is free from
encumbrances, restrictions and outgoings of an onerous nature which could affect its value.
APPENDIX III PROPERTY VALUATION REPORT
III – 2


--- page 519 ---
CURRENCY
Unless otherwise stated, all money amounts stated are in Renminbi ( ‘‘RMB ’’). The
exchange rate used in valuing the property in the PRC as at 31 May 2024 was RMB1=HK$1.1.
There has been no significant fluctuation in the exchange rate for RMB against Hong Kong
Dollars between that date and the date of this letter.
We enclose herewith the valuation certificate.
Yours faithfully
For and on behalf of
HG Appraisal & Consulting Limited
Raymond Ho Kai Kwong
Registered Professional Surveyor (GP)
MRICS MHKIS MSc(e-com)
China Real Estate Appraiser
Managing Director
Note: Mr. Raymond Ho Kai Kwong, Chartered Surveyor, MRI CS MHKIS MSc(e-com), has over thirty three years ’
experiences in undertaking valuations of properties in Hong Kong and has over twenty eight years ’ experiences in
valuations of properties in the PRC.
APPENDIX III PROPERTY VALUATION REPORT
III – 3


--- page 520 ---
VALUATION CERTIFICATE
Property interest held by the Group as an investment property in the PRC
Property Description and tenur e Particulars of occupancy
Market Value in
existing state as
at Valuation Date
F l o o r s1t o7 ,B l o c k9 9 ,
2799, Tianxiang Avenue,
Nanchang Jiahai Industrial
Park, Nanchang Hi-tech
Industrial Development
Zone, Nanchang City,
Jiangxi Province,
the PRC
The property comprises Levels
1t o7o fa1 2 - s t o r e yb u i l d i n g
completed in 2016.
The gross floor area of the
property is approximately 7,042
sq.m., breakdown as follows:
Floor GFA(sq.m.)
1F 795.28
2F 1,041.12
3F 1,041.12
4F 1,041.12
5F 1,041.12
6F 1,041.12
7F 1,041.12
Total 7,042.00
The land use rights of the
property have been granted for
a term of 50 years commencing
from 1 September 2012 and
expiring on 31 August 2062 for
industrial uses
(Note 4(iii)-(vii)) .
The property is subject to a
tenancy for a term of 20 years
commencing from 5 March
2020 and expiring on 4 March
2040 as office and enterprise
ancillary uses (hospitality,
catering, etc.).
Monthly detailed rental:
Year one to five: RMB14/sq.m.
Year six to eight: 5% rental
increment
Year nine to twenty:
5% rental increment for each
every three years.
RMB26,880,000
(equivalent to
approximately
HK$29,568,000)
Interest
attributable to the
Group
100%
Market Value in
existing state
attributable to the
Group as at
31 May 2024
RMB26,880,000
(equivalent to
approximately
HK$29,568,000)
Notes:
1. According to a Nanchang City Commodity Real Estate Sale and Purchase Contract dated 20 September 2016,
Zhonggan Communication (Group) Co., Ltd. acquired Block 99, 2799, Tianxiang Avenue, Nanchang Jiahai
Industrial Park at the consideration of RMB38,964,086.
2. According to a Real Estate Title Certificate (Document No.: Gan (2022) Nanchang City Bu Dong Chan Quan No.
0093346) dated 21 August 2019, the land use rights of the property having a site area of approximately 1,048.11
sq.m. and gross floor area of approximately 12,569.06 sq.m. were granted to Zhonggan Communication (Group)
Co. Ltd. for a term of 50 years commencing from 1 September 2012 and expiring on 31 August 2062 for industrial
uses. (see Note 4(iii)-(vii)).
3. According to the Real Estate Lease Agreement, the prope rty with a gross floor area of approximately 7,042 sq.m.
has been leased to Jiangxi Yiting Hotel Management Co., Ltd. for office and ancillary use (hospitality, catering,
etc.), with a lease term from 5 March 2020 to 4 March 2040. The monthly rent for the first to fifth years is RMB14/
sq.m., with an increment of 5% for the sixth to eighth years, and an increment of 5% for each every three years for
the nineth to twentieth year.
APPENDIX III PROPERTY VALUATION REPORT
III – 4


--- page 521 ---
4. The PRC Legal Opinion states, inter alia , the followings:
(i) The registered owner of the property has obtained th e relevant title certificates and has legal ownership of
the property.
(ii) The registered owner of the property can legally leas e, mortgage or dispose of the abovementioned property
rights in other legal ways. Currently, apart from mortgage, there are no legal procedures or rights restrictions
that have a significant adverse impact on the use of the land or house, such as being seised, frozen, or
sued.
(iii) The Nanchang High-tech Zone Management Committee issued a confirmation on 6 May 2021 agreeing to
change floors 1 to 8 of Block 99 of Nanchang Jiahai Industrial Park to an office and enterprise ancillary use
(hospitality, cate ring, etc.) space.
(iv) The High tech Industrial Development Zone Branc h of Nanchang Natural Resources and Planning Bureau
has issued two confirmations dated 16 March 2023 and 25 January 2024, it is certified that Zhonggan
Communication (Group) Co., Ltd. has not been pena lised by the High-tech Industrial Development Zone
Branch of Nanchang Natural Resources and Planning Bureau from 1 January 2020 to 16 March 2023 and
from 1 January 2023 to 25 January 2024.
(v) The Nanchang High-tech Zone Management Commi ttee Urban Rural Construction Bureau has issued a
confirmation dated 1 February 2024, it is certified that Zhonggan Communication (Group) Co. Ltd. was not
involved in any illegal action and did not violate any construction regulations in the period from 1 January
2020 to 26 January 2024.
(vi) The High-tech Industrial Development Zone Branc h of Nanchang Natural Resources and Planning Bureau
has issued a confirmation dated 23 April 2023, it is certified that Zhonggan Communication (Group) Co., Ltd.
can legally use the property (Re: Real Estate Title Certificate (Document No: Gan (2022) Nanchang City Bu
Dong Chan Quan No. 0093346) Right No. 0093346) for office and commercial purposes, and is not subject
to any form of administrative penalty by the aforesaid bureau.
(vii) Based on the above, the risk of being penalised by the competent authorities for not fully utilising the
property according to the land and housing purposes recorded in the real estate certificate is relatively low,
and it will not have a significant adverse impact on the operation of Zhonggan Communication (Group) Co.,
Ltd.
(viii) All legal documents and the relevant planning permits were obtained.
5. The status of title and grant of major approvals and permits in accordance with the PRC Legal Opinion and
information provided by the Company are as follows:
(i) Real Estate Title Certificate Yes
(ii) Real Estate Lease Agreement Yes
6. In arriving of our valuation, we have made the following assumptions:
(i) The owner is entitled to sell, transfer, mortgage, charge, lease, sub-lease or otherwise dispose of the
property to any third party (either local or overseas) at a consideration without payment of any additional
premium or other onerous payment to the government d uring the whole of the unexpired term of their land
use rights periods;
(ii) All land premiums and other costs of ancillary utility services have been settled in full; and
(iii) The property is free from any mortgages, orders a nd other legal encumbrances which may cause adverse
effects to the title of the property.
APPENDIX III PROPERTY VALUATION REPORT
III – 5


--- page 522 ---
7. Valuation technique Inputs Weighted average
Income Capitalisation Approach Estimated market rental value per square metre RMB34
(equivalent to
approximate HK$37)
Capitalisation rate 5.5%
8. The property was inspected by Senior Valuer, Mrs. Zhu Yunyu, on 7 May 2024.
APPENDIX III PROPERTY VALUATION REPORT
III – 6


--- page 523 ---
Set out below is a summary of certain provisions of the Memorandum and Articles of
Association of the Company and of certain aspects of the Cayman Islands Companies Act.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 20 April 2022 under the Cayman Islands Companies Act. The Company ’s
constitutional documents consist of its Memorandum of Association and its Articles of
Association.
1. MEMORANDUM OF ASSOCIATION
(a) The Memorandum states, inter alia , that the liability of members of the Company is
limited to the amount, if any, for the time being unpaid on the shares respectively held
by them and that the objects for which the Company is established are unrestricted
(including acting as an investment company), and that the Company shall have and
be capable of exercising all the functions of a natural person of full capacity
irrespective of any question of corporate benefit, as provided in section 27(2) of the
Cayman Islands Companies Act and in view of the fact that the Company is an
exempted company that the Company will not trade in the Cayman Islands with any
person, firm or corporation except in furtherance of the business of the Company
carried on outside the Cayman Islands.
(b) The Company may by special resolution al ter its Memorandum with respect to any
objects, powers or other matters specified therein.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on 17 June 2024 with effect from the Listing Date.
The following is a summary of certain provisions of the Articles:
(a) Shares
(i) Classes of shares
The share capital of the Company consists of ordinary shares.
(ii) Variation of rights of existing shares or classes of shares
Subject to the Cayman Islands Companies Act, if at any time the share capital of
the Company is divided into different classes of shares, all or any of the special rights
attached to the shares or any class of shares may (unless otherwise provided for by
the terms of issue of that class) be varied, modified or abrogated either with the
consent in writing of the holders of not less than three-fourths of the voting rights of
the holders of that class or with the sanction of a special resolution passed at a
separate general meeting of the holders of the shares of that class. T o every such
separate general meeting the provisions of the Articles relating to general meetings
will mutatis mutandis apply, but so that the necessary quorum (other than at an
adjourned meeting, in which case, the quorum shall be two holders present in person
(or, in the case of the shareholder being a corporation, by its duly authorised
representative) or by proxy (whatever the number of shares held by them)) shall be
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 1


--- page 524 ---
two persons holding (or, in the case of a shareholder being a corporation, by its duly
authorised representative) or representing by proxy holding not less than one-third of
the issued shares of that class. Every holder of shares of the class shall be entitled to
one vote for every such share held by him.
Any special rights conferred upon the holders of any shares or class of shares
shall not, unless otherwise expressly provided in the rights attaching to the terms of
issue of such shares, be deemed to be varied by the creation or issue of further
shares ranking pari passu therewith.
(iii) Alteration of capital
The Company may by ordinary resolution of its members:
(i) increase its share capital by the creation of new shares;
(ii) consolidate or divide all or any of its capital into shares of larger or smaller
amount than its existing shares;
(iii) divide its shares into several cl asses and attach to such shares any
preferential, deferred, qualified or special rights, privileges, conditions or
restrictions as the Company in general meeting or as the directors may
determine;
(iv) subdivide its shares or any of them into shares of smaller amount than is
fixed by the Memorandum;
(v) cancel any shares which, at the date of passing of the resolution, have not
been taken and diminish the amount of its capital by the amount of the
shares so cancelled;
(vi) make provision for the issue and allotment of shares which do not carry any
voting rights;
(vii) change the currency of denomination of its share capital; and
(viii) reduce its share premium account in any manner authorised and subject to
any conditions prescribed by law.
The Company may reduce its share capital or any capital redemption reserve or
other undistributable reserve in any way by special resolution.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 2


--- page 525 ---
(iv) Transfer of shares
All transfers of shares may be effected b y an instrument of transfer in writing in
the usual or common form or in such other form as the Board may approve provided
always that it shall be in such a form prescribed by the Stock Exchange and which
may be under hand only or, if the transferor or transferee is a clearing house or its
nominee(s), by hand or by machine imprinted signature or by such other manner of
execution as the Board may approve from time to time.
Notwithstanding the foregoing, for so long as any shares are listed on the Stock
Exchange, titles to such listed shares may be evidenced and transferred in
accordance with the laws applicable to and the rules and regulations of the Stock
Exchange that are or shall be applicable to such listed shares. The register of
members in respect of its listed shares (whether the principal register or a branch
register) may be kept by recording the particulars required by Section 40 of the
Cayman Islands Companies Act in a form otherwise than legible if such recording
otherwise complies with the laws applicable to and the rules and regulations of the
Stock Exchange that are or shall be applicable to such listed shares.
The instrument of transfer shall be executed by or on behalf of the transferor and
t h et r a n s f e r e ep r o v i d e dt h a tt h eB o a r dmay dispense with the execution of the
instrument of transfer by the transferor or the transferee. The transferor shall be
deemed to remain the holder of the share until the name of the transferee is entered
in the register of members in respect of that share.
The Board may, in its absolute discretion, at any time transfer any share upon
the principal register to any branch register or any share on any branch register to the
principal register or any other branch register.
The Board may decline to recognise any instrument of transfer unless a fee (not
exceeding the maximum sum as the Stock Exchange may determine to be payable)
determined by the Directors is paid to the Company, the instrument of transfer is
properly stamped (if applicable), it is in respect of only one class of share, the shares
concerned are free of any lien in favour of the Company and is lodged at the relevant
registration office or registered office or such other place at which the principal
register is kept accompanied by the relevant Share certificate(s) and such other
evidence as the Board may reasonably require to show the right of the transferor to
make the transfer (and if the instrument of transfer is executed by some other person
on his behalf, the authority of that person so to do).
The registration of transfers may be suspended and the register may be closed
on giving notice by advertisement in any newspaper or by any other means in
accordance with the requirements of the Stock Exchange, at such times and for such
periods (not exceeding in the whole 30 days in any year) as the Board may determine.
The period of thirty (30) days may be extended for a further period or periods not
exceeding thirty (30) days in respect of any year if approved by shareholders by
ordinary resolution.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 3


--- page 526 ---
Subject to the above, fully paid shares are free from any restriction on transfer
and free of all liens in favour of the Company.
(v) Power of the Company to purchase its own shares
The Company is empowered by the Cayman Islands Companies Act and the
Articles to purchase its own shares subject to certain restrictions and the Board may
only exercise this power on behalf of the Company subject to any applicable
requirements imposed from time to time by the Stock Exchange and/or any competent
regulatory authority.
Where the Company purchases for redemption a redeemable share, purchases
not made through the market or by tend er must be limited to a maximum price
determined by the Company in general meeting. If purchases are by tender, tenders
must be made available to all members alike.
The Board may accept the surrender for no consideration of any fully paid share.
(vi) Power of any subsidiary of the C ompany to own shares in the Company
There are no provisions in the Articles relating to ownership of shares in the
Company by a subsidiary.
(vii) Calls on shares and forfeiture of shares
T h eB o a r dm a yf r o mt i m et ot i m em a k es u c hc a l l su p o nt h em e m b e r si nr e s p e c t
of any monies unpaid on the shares held by them respectively (whether on account of
the nominal value of the shares or by way of premium) and not by the conditions of
allotment thereof made payable at a fixed time. A call may be made payable either in
one lump sum or by instalments. If the sum payable in respect of any call or
instalment is not paid on or before the day appointed for payment thereof, the person
or persons from whom the sum is due shall pay interest on the same at such rate not
exceeding twenty per cent. (20%) per annum as the Board may agree to accept from
the day appointed for the payment thereof to the time of actual payment, but the
Board may waive payment of such interest wholly or in part. The Board may, if it
thinks fit, receive from any member willin g to advance the same, either in money or
money ’s worth, all or any part of the monies uncalled and unpaid or instalments
payable upon any shares held by him, and upon all or any of the monies so advanced
the Company may pay interest at such rate (if any) as the Board may decide.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 4


--- page 527 ---
If a member fails to pay any call on the day appointed for payment thereof, the
Board may serve not less than fourteen (14) days ’ notice on him requiring payment of
so much of the call as is unpaid, together with any interest which may have accrued
and which may still accrue up to the date of actual payment and stating that, in the
event of non-payment at or before the time appointed, the shares in respect of which
the call was made will be liable to be forfeited.
If the requirements of any such notice are not complied with, any share in
respect of which the notice has been given may at any time thereafter, before the
payment required by the notice has been made, be forfeited by a resolution of the
Board to that effect. Such forfeiture will include all dividends and bonuses declared in
respect of the forfeited share and not actually paid before the forfeiture.
A person whose shares have been forfeited shall cease to be a member in
respect of the forfeited shares but shall, notwithstanding, remain liable to pay to the
Company all monies which, at the date of forfeiture, were payable by him to the
Company in respect of the forfeited shares, together with (if the Board shall in its
discretion so require) interest thereon from the date of forfeiture until the date of
actual payment at such rate not exceeding twenty per cent. (20%) per annum as the
Board determines.
(b) Directors
(i) Appointment, retirement and removal
At each annual general meeting, one third of the Directors for the time being (or
if their number is not a multiple of three, then the number nearest to but not less than
one third) shall retire from office by rotation provided that every Director (including
those appointed for a specific term) shall be subject to retirement at an annual general
meeting at least once every three years. The Directors to retire by rotation shall
include any Director who wishes to retire and not offer himself for re-election. Any
further Directors so to retire shall be those who have been longest in office since their
last re- election or appointment but as between persons who became or were last re-
elected Directors on the same day those to retire will (unless they otherwise agree
among themselves) be determined by lot.
Neither a Director nor an alternate Director is required to hold any shares in the
Company by way of qualification. Further, there are no provisions in the Articles
relating to retirement of Directors upon reaching any age limit.
The Directors have the power to appoint any person as a Director either to fill a
casual vacancy on the Board or as an addition to the existing Board. Any Director
appointed to fill a casual vacancy shall hold office only until the first annual general
meeting of members after his appointment and be subject to re-election at such
meeting and any Director appointed as an addition to the existing Board shall hold
office only until the next first annual general meeting of the Company after his
appointment and shall then be eligible for re-election.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 5


--- page 528 ---
A Director may be removed by an ordinary resolution of the Company ’s
shareholders before the expiration of his term of office (including a managing director
or other executive director, but without prejudice to any claim for damages under any
contract) and members of the Company may by ordinary resolution appoint another in
his stead. Unless otherwise determined by the Company in general meeting, the
number of Directors shall not be less than two. There is no maximum number of
Directors.
The office of director shall be vacated if:
(aa) he becomes bankrupt or has a receiving order made against him or
suspends payment or compounds with his creditors generally; or
(bb) he dies or is declared to be of unsound mind as determined pursuant to an
order made by any competent court or official and the Board resolves that
his office be vacated; or
(cc) without special leave, he is absent from meetings of the Board for six (6)
consecutive months, and the Board resolves that his office is vacated; or
(dd) he is prohibited by law from acting as a director or he ceases to be a
director by operation of law; or
(ee) he has been validly required by the stock exchange of the Relevant
T erritory (as defined in the Articles) to cease to be a Director; or
(ff) by notice in writing delivered to our Company at its Registered Office (as
defined in the Articles) or at the Head Office (as defined in the Articles) or
tendered at a meeting of the Board he resigns his office; or
(gg) he is removed from office by an ordinary resolution of the Company or
otherwise pursuant to the Articles; or
(hh) he is removed from office by notice in writing served on him signed by not
less than three-fourth in number (or if that is not a round number, the
nearest lower round number) of the Directors (including himself) then in
office.
The Board may appoint one or more of its body to be managing director, joint
managing director, or deputy managing director or to hold any other employment or
executive office in the management of the business of the Company for such period
and upon such terms as the Board may determine and the Board may revoke or
terminate any of such appointments. The Board may delegate any of its powers,
authorities and discretions to committees consisting of such Director or Directors and
other persons as the Board thinks fit, and it may from time to time revoke such
delegation or revoke the appointment of and discharge any such committees either
wholly or in part, and either as to persons or purposes, but every committee so
formed must, in the exercise of the powers, authorities and discretions so delegated,
conform to any regulations that may from time to time be imposed upon it by the
Board.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 6


--- page 529 ---
(ii) Power to allot and issue shares and warrants
Subject to the provisions of the Cayman Islands Companies Act, the rules of the
Stock Exchange and the Memorandum and Articles and without prejudice to any
special rights or restrictions conferred on the holders of any shares or attaching to any
class of shares, any share may be issued (a) with or have attached thereto such
rights, or such restrictions, whether with regard to dividend, voting, return of capital, or
otherwise, as the Directors may determine, or (b) on terms that, at the option of the
Company or the holder thereof, it is liable to be redeemed.
The Board may issue warrants conferring the right upon the holders thereof to
subscribe for any class of shares or other securities in the capital of the Company on
such terms as it may determine.
Subject to the provisions of the Cayman Islands Companies Act and the Articles
and, where applicable, the rules of the Stock Exchange and without prejudice to any
special rights or restrictions for the time being attached to any shares or any class of
shares, all unissued shares and other securities in the Company are at the disposal of
the Board, which may offer, allot, grant options over or otherwise dispose of them to
such persons, at such times, for such consideration and on such terms and conditions
as it in its absolute discretion thinks fit, but so that no shares shall be issued at a
discount to their nominal value.
Neither the Company nor the Board is obliged, when making or granting any
allotment of, offer of, option over or disposal of shares or other securities, to make, or
make available, any such allotment, offer, option or shares or other securities to
members or others with registered addresses in any particular te rritory or territories
being a territory or territories where, in the absence of a registration statement or
other special formalities, this would or might, in the opinion of the Board, be unlawful
or impracticable. Members affected as a result of the foregoing sentence shall not be,
or be deemed to be, a separate class of members for any purpose whatsoever.
(iii) Power to dispose of the assets of the Company or any of its subsidiaries
There are no specific provisions in the Articles relating to the disposal of the
assets of the Company or any of its subsidiaries. The Directors may, however,
exercise all powers and do all acts and things which may be exercised or done or
approved by the Company and which are not required by the Articles or the Cayman
Islands Companies Act to be exercised or done by the Company in general meeting.
(iv) Borrowing powers
The Board may exercise all the powers of the Company to raise or borrow
money, to mortgage or charge all or any part of the undertaking, property and assets
and uncalled capital of the Company and, subject to the Cayman Islands Companies
Act, to issue debentures, bonds and other securities of the Company, whether outright
or as collateral security for any debt, liab ility or obligation of the Company or of any
third party.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 7


--- page 530 ---
(v) Remuneration
The ordinary remuneration of the Directors is to be determined by the Company
in general meeting or by the Board, such sum (unless otherwise directed by the
resolution by which it is voted) to be divided amongst the Directors in such
proportions and in such manner as the Board may agree or, failing agreement,
equally, except that any Director holding office for part only of the period in respect of
which the remuneration is payable shall only rank in such division in proportion to the
time during such period for which he held office. The Directors are also entitled to be
prepaid or repaid all travelling, hotel and incidental expenses reasonably expected to
be incurred or incurred by them in attending any Board meetings, committee meetings
or general meetings or separate meetings of any class of shares or of debentures of
the Company or otherwise in connection with the discharge of their duties as
Directors.
Any Director who, by request, goes or resides abroad for any purpose of the
Company or who performs services which in the opinion of the Board go beyond the
ordinary duties of a Director may be paid such extra remuneration as the Board may
determine and such extra remuneration shall be in addition to or in substitution for any
ordinary remuneration as a Director. An executive director or a Director appointed to
be a managing director, joint managing director, deputy managing director or other
executive officer shall receive such remuneration and such other benefits and
allowances as the Board may from time to t ime decide. Such remuneration may be
either in addition to or in lieu of his remuneration as a Director.
The Board may establish and maintain or procure the establishment and
maintenance of any contributory or non-contributory pension or superannuation funds
or personal pension plans for the benefit of, or give or procure the giving of donations,
gratuities, pensions, allowances or emoluments to, any persons who are or were at
any time in the employment or service of our Company, or of any company which is a
subsidiary of our Company, or is allied or associated with our Company or with any
such subsidiary company, or who are or were at any time directors or officers of our
Company or of any such other company as aforesaid, and holding or who have held
any salaried employment or office in our Company or such other company, and the
spouses, widows, widowers, families a nd dependants of any such persons.
The Board may also establish and subsidise or subscribe to any institutions,
associations, clubs or funds calculated to be for the benefit of or to advance the
interests and well-being of our Company or of any such other company as aforesaid
or of any such persons as aforesaid, and may make payments for or towards the
insurance of any such persons as aforesa id, and subscribe or guarantee money for
charitable or benevolent objects or for any exhibition or for any public, general or
useful object.
The Board may do any of the matters aforesaid, either alone or in conjunction
with any such other company as aforesaid. Any Director holding any such employment
or office shall be entitled to participate in and retain for his own benefit any such
donation, gratuity, pension, allowance or employment.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 8


--- page 531 ---
Our Company in general meeting may, upon the recommendation of the Board,
resolve to capitalise any sum standing to the credit of any of our Company ’sr e s e r v e
accounts which are available for distribution (including its share premium account and
capital redemption reserve fund, subject to the Cayman Islands Companies Act) and
to appropriate such sums to the holders of shares on the principal register and any
branch register of shareholders of our Company to be maintained at such place within
or outside the Cayman Islands as the Board shall determine from time to time at the
close of business on the date of the relevant resolution (or such other date as may be
specified therein or determined as provided therein) in the proportions in which such
sum would have been divisible amongst them had the same been a distribution of
profits by way of dividend and to apply such sum on their behalf in paying up in full
unissued shares for allotment and distribution credited as fully paid-up to and amongst
them in the proportion aforesaid.
(vi) Compensation or payments for loss of office
Pursuant to the Articles, payments to any Director or past Director of any sum by
way of compensation for loss of office or as consideration for or in connection with his
retirement from office (not being a payment to which the Director or past Director is
contractually entitled) must be approved by the Company in general meeting.
(vii) Loans and provision of secu rity for loans to Directors
The Company must not make any loan, directly or indirectly, to a Director or his
close associate(s) if and to the extent it would be prohibited by the Companies
Ordinance as if the Company were a company incorporated in Hong Kong.
(viii) Disclosure of interests in contracts with the Company or any of its
subsidiaries
A Director may hold any other office or place of profit with the Company (except
that of the auditor of the Company) in conjunction with his office of Director for such
period and upon such terms as the Board may determine, and may be paid such extra
remuneration therefor in addition to any remuneration provided for by or pursuant to
the Articles. A Director may be or become a director or other officer of, or otherwise
interested in, any company promoted by the Company or any other company in which
the Company may be interested, and shall not be liable to account to the Company or
the members for any remuneration, profits or other benefits received by him as a
director, officer or member of, or from his interest in, such other company. The Board
may also cause the voting power conferred by the shares in any other company held
or owned by the Company to be exercised in such manner in all respects as it thinks
fit, including the exercise thereof in favour of any resolution appointing the Directors
or any of them to be directors or officers of such other company, or voting or providing
for the payment of remuneration to the directors or officers of such other company.
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No Director or proposed or intended Director shall be disqualified by his office
from contracting with the Company, either with regard to his tenure of any office or
place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall
any such contract or any other contract or arrangement in which any Director is in any
way interested be liable to be avoided, nor shall any Director so contracting or being
so interested be liable to account to the Company or the members for any
remuneration, profit or other benefits realised by any such contract or arrangement by
reason of such Director holding that office or the fiduciary relationship thereby
established. A Director who to his knowledge is materially, whether directly or
indirectly, interested in a contract or arrangement or proposed contract or
arrangement with the Company must declare the nature of his interest at the earliest
meeting of the Board at which it is practicable for him to do so.
A Director shall not vote (nor be counted in the quorum) on any resolution of the
Board approving any contract or arrangement or other proposal in which he or any of
his close associates is materially interest ed, but this prohibition does not apply to any
of the following matters, namely:
(aa) any contract or arrangement for giving to such Director or his close
associate(s) any security or indemnity in respect of money lent by him or
any of his close associates or obligations incurred or undertaken by him or
any of his close associates at the request of or for the benefit of the
Company or any of its subsidiaries;
(bb) any contract or arrangement for the giving of any security or indemnity to a
third party in respect of a debt or obligation of the Company or any of its
subsidiaries for which the Director o r his close associate(s) has himself/
themselves assumed responsibility in whole or in part whether alone or
jointly under a guarantee or indemnity or by the giving of security;
(cc) any proposal, contract or arrangement concerning an offer of shares or
debentures or other securities of or by the Company or any other company
which the Company may promote or be interested in for subscription or
p u r c h a s e ,w h e r et h eD i r e c t o ro rh i sc l o s ea s s o c i a t e ( s )i s / a r eo ri s / a r et ob e
interested as a participant in the underwriting or sub-underwriting of the
offer;
(dd) any contract or arrangement in which the Director or his close associate(s)
is/are interested in the same manner as other holders of shares or
debentures or other securities of the Company by virtue only of his/their
interest in shares or debentures or other securities of the Company; or
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(ee) any proposal or arrangement concerning the adoption, modification or
operation of any employees ’ share scheme or any share incentive or share
option scheme, a pension f und or retirement, death, or disability benefits
scheme or other arrangement which relates both to the Directors, his close
associates and employees of the Company or of any of its subsidiaries and
does not provide in respect of any Director, or his close associate(s), as
such any privilege or advantage not accorded generally to the class of
persons to which such scheme or fund relates.
(c) Proceedings of the Board
The Board may meet for the despatch of business, adjourn and otherwise regulate its
meetings and proceedings as it considers appropriate. Questions arising at any meeting
shall be determined by a majority of votes. In the case of an equality of votes, the chairman
of the meeting shall have a second or casting vote.
(d) Alterations to constitutional documents and the Company ’sn a m e
The Articles may be rescinded, altered or amended by the Company in general
meeting by special resolution. The Articles state that a special resolution shall be required
to alter the provisions of the Memorandum, to amend the Articles or to change the name of
the Company.
(e) Meetings of members
(i) Special and ordinary resolutions
A special resolution of the Company must be passed by a majority of not less
than three-fourths of the votes cast by such members as, being entitled so to do, vote
in person or, in the case of such members as are corporations, by their duly
authorised representatives or, where proxies are allowed, by proxy at a general
meeting of which notice has been duly given in accordance with the Articles.
Under the Cayman Islands Companies Act, a copy of any special resolution must
be forwarded to the Registrar of Companies in the Cayman Islands within fifteen (15)
days of being passed.
An ordinary resolution is defined in the Articles to mean a resolution passed by a
simple majority of the votes of such member s of the Company as, being entitled to do
so, vote in person or, in the case of corporations, by their duly authorised
representatives or, where proxies are allowed, by proxy at a general meeting of which
notice has been duly given in accordance with the Articles.
A resolution in writing signed by or on behalf of all members shall be treated as
an ordinary resolution duly passed at a general meeting of the Company duly
convened and held, and where relevant as a special resolution so passed.
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(ii) Voting rights and right to demand a poll
Subject to any special rights, privileges or restrictions as to voting for the time
being attached to any shares, at any general meeting on a poll every member present
in person or by proxy or, in the case of a member being a corporation, by its duly
authorised representative shall have one vote for every fully paid share of which he is
the holder but so that no amount paid up or credited as paid up on a share in advance
of calls or installments is treated for the foregoing purposes as paid up on the share.
A member entitled to more than one vote need not use all his votes or cast all the
v o t e sh eu s e si nt h es a m ew a y .
At any general meeting a resolution put to the vote of the meeting is to be
decided by way of a poll save that the chairman of the meeting may, pursuant to the
the rules of the Stock Exchange, allow a resolution which relates purely to a
procedural or administrative matter to be voted on by a show of hands in which case
every member present in person (or being a corporation, is present by a duly
authorised representative), or by proxy(ies) shall have one vote provided that where
more than one proxy is appointed by a member which is a clearing house (or its
nominee(s)), each such proxy shall have one vote on a show of hands. Votes
(whether on a show of hands or by way of poll) may be cast by such means,
electronic or otherwise, as the Directors or the chairman of the meeting may
determine.
If a recognised clearing house (or its nominee(s)) is a member of the Company it
may authorise such person or persons as it thinks fit to act as its representative(s) or
proxy(ies) at any meeting of the Company or at any meeting of any class of members
of the Company or at any meeting of the creditors of the Company provided that, if
more than one person is so authorised, the authorisation shall specify the number and
class of shares in respect of which each such person is so authorised. A person
authorised pursuant to this provision shall be deemed to have been duly authorised
without further evidence of the facts and be entitled to exercise the same powers on
behalf of the recognised clearing house (or its nominee(s)) as if such person was the
registered holder of the shares of the Company held by that clearing house (or its
nominee(s)) including, the right to speak and vote, and where a show of hands is
allowed, the right to vote individually on a show of hands.
Shareholders must have the right to: (a) speak at general meetings of the
Company; and (b) vote at a general meeting except whether a shareholder is
required, by the the rules of the Stock Exchange, to abstain from voting to approve
the matter under consideration.
Where the Company has any knowledge that any shareholder is, under the rules
of the Stock Exchange, required to abstain from voting on any particular resolution of
the Company or restricted to voting only for or only against any particular resolution of
the Company, any votes cast by or on behalf of such shareholder in contravention of
such requirement or restriction shall not be counted.
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(iii) Annual general meetings and extraordinary general meeting
Other than the year of the Company ’s adoption of the Articles, in each financial
year during the Relevant Period (as defined in the Articles), the Company shall hold a
general meeting as its annual general meeting within six months after the end of each
financial year in addition to any other meeting in that financial year and shall specify
the meeting as such in the notice calling it.
Extraordinary general meetings may be convened on the requisition of one or
more shareholder(s) holding, at the date of deposit of the requisition, not less than
one-tenth of the paid up capital of the Company having the right of voting at general
meetings, on a one vote per share basis in the share capital of the Company and the
foregoing shareholders shall be able to add resolutions to the meeting agenda. Such
requisition shall be made in writing to the Board or the secretary for the purpose of
requiring an extraordinary general meeting to be called by the Board for the
transaction of any business specified in such requisition. Such meeting shall be held
within 2 months after the deposit of such requisition. If within 21 days of such deposit,
the Board fails to proceed to convene such meeting, the requisitionist(s) himself/
herself (themselves) may do so in the same manner, and all reasonable expenses
incurred by the requisitionist(s) as a re sult of the failure of the Board shall be
reimbursed to the requisitionist(s) by the Company.
Notwithstanding any provisions in the Articles, a meeting of the shareholders or
any class thereof may be held by means of such telephone, electronic or other
communication facilities as permit all pe rsons participating in the meeting to
communicate with each other simultaneously and instantaneously, and participation in
such a meeting shall constitute presence at such meetings.
(iv) Notices of meetings and business to be conducted
An annual general meeting must be called by notice in writing of not less than
twenty-one (21) days. All other general meetings must be called by notice of at least
fourteen (14) days. The notice is exclusive of the day on which it is served or deemed
to be served and of the day for which it is given, and must specify the time and place
of the meeting and particulars of resolutions to be considered at the meeting and, in
the case of special business, the general nature of that business.
In addition, notice of every general meeting must be given to all members of the
Company other than to such members as, under the provisions of the Articles or the
terms of issue of the shares they hold, are not entitled to receive such notices from
the Company, and also to, among others, the auditors for the time being of the
Company.
Any notice to be given to or by any person pursuant to the Articles may be
served on or delivered to any member of the Company personally, by post to such
member ’s registered address or by advertisement in newspapers in accordance with
the requirements of the Stock Exchange. Subject to compliance with Cayman Islands
law and the rules of the Stock Exchange, notice may also be served or delivered by
the Company to any member by electronic means to such contact details or websites
as may from time to time be supplied by the member concerned or by publishing it on
the website of our Company and the Stock Exchange.
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All business that is transacted at an extraordinary general meeting and at an
annual general meeting is deemed special, save that in the case of an annual general
meeting, each of the following business is deemed an ordinary business:
(aa) the declaration and sanctioning of dividends;
(bb) the consideration and adoption of the accounts and balance sheet and the
reports of the directors and the auditors;
(cc) the election of directors whether by rotation or otherwise in place of those
retiring;
(dd) the appointment of auditors and other officers;
(ee) the fixing of, or the determination of the method of fixing of the
remuneration of the Directors and of the auditors;
(ff) the granting of any mandate or authority to the Board to offer, allot, grant
options over, or otherwise dispose of the unissued shares representing not
more than 20% (or such other percentage as may from time to time be
specified in the rules of the Stock Exchange) in nominal value of its then
existing issued share capital and the number of any securities repurchased
pursuant to paragraph (gg) below; and
(gg) the granting of any mandate or a uthority to the Board to repurchase
securities of the Company.
(v) Quorum for meetings and separate class meetings
No business shall be transacted at any general meeting unless a quorum is
present when the meeting proceeds to business and continues to be present until the
conclusion of the meeting, but the absence of a quorum shall not preclude the
appointment of a chairman.
The quorum for a general meeting shall be two members present in person (or, in
the case of a member being a corporation, by its duly authorised representative) or by
proxy and entitled to vote. In respect of a separate class meeting (other than an
adjourned meeting) convened to sancti on the modification of class rights the
necessary quorum shall be two persons (or, in the case of a member being a
corporation, by its duly authorised representative) holding or representing by proxy not
less than one-third of the issued shares of that class.
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(vi) Proxies
Any member of the Company entitled to attend and vote at a meeting of the
Company is entitled to appoint another person as his proxy to attend and vote instead
of him. A member who is the holder of two or more shares may appoint more than one
proxy to represent him and vote on his behalf at a general meeting of the Company or
at a class meeting. A proxy need not be a member of the Company and is entitled to
exercise the same powers on behalf of a member who is an individual and for whom
he acts as proxy as such member could exercise. In addition, every member being a
corporation shall be entitled to appoint a representative to attend and vote at any
general meeting of the Company and, where a corporation is so represented, it shall
be treated as being present at any meeting in person. The person so authorised shall
be entitled to exercise the same powers on behalf of such corporation as the
corporation could exercise if it were an individual member. A corporation may execute
a form of proxy under the hand of a duly authorised officer and such a proxy is
entitled to exercise the same powers on behalf of a member which is a corporation
and for which he acts as proxy as such member could exercise as if it were an
individual member. On a poll or a show of hands, votes may be given either
personally (or, in the case of a member being a corporation, by its duly authorised
representative) or by proxy.
(f) Accounts and audit
The Board shall cause true accounts to be kept of the sums of money received and
expended by the Company, and the matters in respect of which such receipt and
expenditure take place, and o f the assets and liabilities of the Company and of all other
matters required by the Cayman Islands Companies Act or necessary to give a true and
fair view of the state of the Company ’s affairs and to show and explain its transactions.
The accounting records must be kept at the Head Office or at such other place or
places as the Board decides and shall always be open to inspection by any Director. No
member (other than a Director) or other person shall have any right to inspect any
accounting record or book or document of the Company except as conferred by the
Cayman Islands Companies Act or ordered by a court of competent jurisdiction or
authorised by the Board or the Company in general meeting. However, an exempted
company must make available at its registered office in electronic form or any other
medium, copies of its books of account or parts thereof as may be required of it upon
service of an order or notice by the T ax Information Authority pursuant to the T ax
Information Authority Act (Revised) of the Cayman Islands.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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A copy of every balance sheet (including every document required by law to be
annexed thereto) and profit and loss account which is to be laid before the Company at its
annual general meeting, together with a copy of the Directors ’ report and a copy of the
auditors ’ report, shall not less than twenty-one (21) days before the date of the meeting
and at the same time as the notice of annual general meeting be sent to every person
entitled to receive notices of general meetings of the Company under the provisions of the
Articles; however, subject to compliance with all applicable laws, including the rules of the
Stock Exchange, the Company may send to such persons summarised financial statements
derived from the Company ’s annual accounts and the directors ’ report provided that any
such person may by notice in writing served on the Company, demand that the Company
sends to him, in addition to summarised finan cial statements, a complete copy of the
Company ’s annual financial statement and the directors ’ report thereon.
At the annual general meeting in each year, the members shall by ordinary resolution
appoint an auditor to audit the accounts of the Company and such auditor shall hold office
until the next annual general meeting. Moreover, the members may, at any general
meeting, by ordinary resolution remove the auditors at any time before the expiration of his
terms of office and shall by ordinary resolution at that meeting appoint another auditor for
the remainder of his term. The appointment, removal and remuneration of the auditors must
be approved by a simple majority of the Company ’s shareholders in a general meeting or
by other body that is independent of the Board.
The financial statements of the Company shall be audited by the auditor in
accordance with generally accepted auditing standards which may be those of a country or
jurisdiction other than the Cayman Islands. The auditor shall make a written report thereon
in accordance with generally accepted auditing standards and the report of the auditor
must be submitted to the members in general meeting.
The auditors shall audit the financial statements of the Company in accordance with
generally accepted accounting principles of Hong Kong, the International Accounting
Standards or such other standards as may be permitted by the Stock Exchange.
(g) Dividends and other methods of distribution
The Company in general meeting may declare dividends in any currency to be paid to
the members but no dividend shall be declared in excess of the amount recommended by
the Board.
The Articles provide dividends may be declared and paid out of the profits of the
Company, realised or unrealised, or from any reserve set aside from profits which the
directors determine is no longer needed. With the sanction of an ordinary resolution
dividends may also be declared and paid out of share premium account or any other fund
or account which can be authorised for this purpose in accordance with the Cayman
Islands Companies Act.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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Except in so far as the rights attaching t o, or the terms of issue of, any share may
otherwise provide, (i) all dividends shall be declared and paid according to the amounts
paid up on the shares in respect whereof the dividend is paid but no amount paid up on a
share in advance of calls shall for this purpose be treated as paid up on the share and (ii)
all dividends shall be apportioned and paid pro rata according to the amount paid up on the
shares during any portion or portions of the period in respect of which the dividend is paid.
The Directors may deduct from any dividend or other monies payable to any member or in
respect of any shares all sums of money (if any) presently payable by him to the Company
on account of calls or otherwise.
Whenever the Board or the Company in general meeting has resolved that a dividend
be paid or declared on the share capital of the Company, the Board may further resolve
either (a) that such dividend be satisfied wholly or in part in the form of an allotment of
shares credited as fully paid up, provided that the shareholders entitled thereto will be
entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment,
or (b) that shareholders entitled to such dividend will be entitled to elect to receive an
allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend
as the Board may think fit.
The Company may also upon the recommendation of the Board by an ordinary
resolution resolve in respect of any one particular dividend of the Company that it may be
satisfied wholly in the form of an allotment of shares credited as fully paid up without
offering any right to shareholders to elect to receive such dividend in cash in lieu of such
allotment.
Any dividend, interest or other sum payable in cash to the holder of shares or
bonuses, rights or other distributions in respect of any share may be paid by cheque or
warrant or certificate or other documents or evidence of title sent through the post
addressed to the holder at his registered address, or in the case of joint holders, addressed
to the holder whose name stands first in the register of the Company in respect of the
shares at his address as appearing in the register or addressed to such person and at such
addresses as the holder or joint holders may in writing direct. Every such cheque or
warrant or certificate or other document or evidence of title so sent shall, unless the holder
or joint holders otherwise direct, be made payable to the order of the holder to whom it is
sent or, in the case of certificates or other documents or evidence of title as aforesaid, in
favour of the shareholder(s) entitled thereto and shall be sent at his or their risk and
payment of the cheque or warrant by the bank on which it is drawn shall constitute a good
discharge to the Company in respect of the dividend and/or other moneys represented
thereby. Any one of two or more joint holders may give effectual receipts for any dividends
or other moneys payable or property distributable and bonuses, rights and other
distributions in respect of the shares held by such joint holders.
Whenever the Board or the Company in general meeting has resolved that a dividend
be paid or declared the Board may further resolve that such dividend be satisfied wholly or
in part by the distribution of specific assets of any kind.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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All dividends or bonuses unclaimed for one year after having been declared may be
invested or otherwise made use of by the Board for the benefit of the Company until
claimed and the Company shall not be constituted a trustee in respect thereof. All
dividends or bonuses unclaimed for six years after having been declared may be forfeited
by the Board and shall revert to the Company.
No dividend or other monies payable by the Company on or in respect of any share
shall bear interest against the Company.
(h) Inspection of corporate records
Pursuant to the Articles, the register and branch register of members maintained in
Hong Kong shall be open to inspection during business hours by members without charge,
or by any other person upon a maximum payment of HK$2.50 or such lesser sum specified
by the Board, at the registered office or such other place at which the register is kept in
accordance with the Cayman Islands Companies Act or, upon a maximum payment of
HK$1.00 or such lesser sum specified by the Board, at the office where the branch register
of members is kept, unless the register i s closed in accordance with the Articles.
(i) Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles relat ing to rights of minority shareholders in
relation to fraud or oppression. However, certain remedies are available to shareholders of
the Company under Cayman Islands law, as summarised in paragraph 3(f) of this Appendix
IV.
(j) Procedures on liquidation
The Company may at any time and from time to time be wound up voluntarily by a
special resolution. If the Company shall be wound up the liquidator shall apply the assets
of the Company in such manner and order as he thinks fit in satisfaction of creditors ’
claims.
Subject to any special rights, privileges or restrictions as to the distribution of
available surplus assets on liquidation for the time being attached to any class or classes
of shares:
(i) if the Company is wound up and the assets a vailable for distrib ution amongst the
members of the Company shall be more th an sufficient to repay the whole of the
capital paid up at the commencement of the winding up after payment to all
creditors, the excess shall be distributed
pari passu amongst such members in
proportion to the amount paid up on the shares held by them respectively; and
(ii) if the Company is wound up and the assets a vailable for distrib ution amongst the
members as such shall be insufficient to repay the whole of the paid-up capital,
such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the members in proportion to the capital paid up, or which ought to
have been paid up, at the commencement of the winding up on the shares held
by them respectively.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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If the Company is wound up (whether the liquidation is voluntary or by the court) the
liquidator may, with the authority of a special resolution and any other sanction required by
the Cayman Islands Companies Act divide among the members in specie or kind the whole
or any part of the assets of the Company whether the assets shall consist of property of
one kind or shall consist of properties of different kinds and the liquidator may, for such
purpose, set such value as he deems fair upon any one or more class or classes of
property to be divided as aforesaid and may determine how such division shall be carried
out as between the members or different classes of members and the members within each
class. The liquidator may, with the like autho rity, vest any part of the assets in trustees
upon such trusts for the benefit of members as th e liquidator, with the like authority, shall
think fit, but so that no member shall be compelled to accept any shares or other property
in respect of which there is a liability.
(k) Subscription rights reserve
The Articles provide that to the extent that it is not prohibited by and is in compliance
with the Cayman Islands Companies Act, if warrants to subscribe for shares have been
issued by the Company and the Company does any act or engages in any transaction
which would result in the subscription price of such warrants being reduced below the par
value of a share, a subscription rights reserve shall be established and applied in paying
up the difference between the subscription price and the par value of a share on any
exercise of the warrants.
3. CAYMAN ISLANDS COMPANIES ACT
The Company is incorporated in the Cayman Islands subject to the Cayman Islands
Companies Act and, therefore, operates subject to Cayman Islands law. Set out below is a
summary of certain provisions of the Cayman Islands Companies Act, although this does not
purport to contain all applicable qualifications and exceptions or to be a complete review of all
matters of the Cayman Islands Companies Act and taxation, which may differ from equivalent
provisions in jurisdictions with which interested parties may be more familiar (for the avoidance
of doubt, special resolution used in the below summary shall have the meaning as set out in the
Cayman Islands Companies Act):
(a) Company operations
As an exempted company, the Company ’s operations must be conducted mainly
outside the Cayman Islands. An exempted company is required to file an annual return
each year with the Registrar of Companies of the Cayman Islands and pay a fee which is
based on the amount of its authorised share capital.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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(b) Share capital
The Cayman Islands Companies Act provides that where a company issues shares at
a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the
value of the premiums on those shares shall be transferred to an account, to be called the
‘‘share premium account ’’. At the option of a company, these provisions may not apply to
premiums on shares of that company allotted pursuant to any arrangement in consideration
of the acquisition or cancellation of shares in any other company and issued at a premium.
The Cayman Islands Companies Act provides that the share premium account may be
applied by a company subject to the provisions, if any, of its memorandum and articles of
association in (a) paying distributions or dividends to members; (b) paying up unissued
shares of the company to be issued to members as fully paid bonus shares; (c) the
redemption and repurchase of shares (subject to the provisions of section 37 of the
Cayman Islands Companies Act); (d) writing-off the preliminary expenses of the company;
and (e) writing-off the expenses of, or the commission paid or discount allowed on, any
issue of shares or debentures of the company.
No distribution or dividend may be paid to members out of the share premium account
unless immediately following the date on which the distribution or dividend is proposed to
be paid, the company will be able to pay its debts as they fall due in the ordinary course of
business.
The Cayman Islands Companies Act provides that, subject to confirmation by the
Grand Court of the Cayman Islands, a company limited by shares or a company limited by
guarantee and having a share capital may, if so authorised by its articles of association, by
special resolution reduce its share capital in any way.
(c) Financial assistance to purchase sh ares of a company or its holding company
There is no statutory prohibition in the Cayman Islands on the provision of financial
assistance by a company to another person for the purchase of, or subscription for, its own
or its holding company ’s shares. Accordingly, a company may provide financial assistance
if the directors of the company consider, in discharging their duties of care and acting in
good faith, for a proper purpose and in the interests of the company, that such assistance
can properly be given. Such assistance should be on an arm ’s length basis.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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(d) Purchase of shares and warrants by a company and its subsidiaries
A company limited by shares or a company limited by guarantee and having a share
capital may, if so authorised by its articles of association, issue shares which are to be
redeemed or are liable to be redeemed at the option of the company or a shareholder and
the Cayman Islands Companies Act expressly provides that it shall be lawful for the rights
attaching to any shares to be varied, sub ject to the provisions of the company ’s articles of
association, so as to provide that such shares are to be or are liable to be so redeemed. In
addition, such a company may, if authorised to do so by its articles of association,
purchase its own shares, including any redeemable shares. However, if the articles of
association do not authorise the manner and terms of purchase, a company cannot
purchase any of its own shares unless the manner and terms of purchase have first been
authorised by an ordinary resolution of the company. At no time may a company redeem or
purchase its shares unless they are fully paid. A company may not redeem or purchase
any of its shares if, as a result of the redemption or purchase, there would no longer be
any issued shares of the company other than shares held as treasury shares. A payment
out of capital by a company for the redemption or purchase of its own shares is not lawful
unless immediately following the date on which the payment is proposed to be made, the
company shall be able to pay its debts as they fall due in the ordinary course of business.
Shares purchased by a company is to be treated as cancelled unless, subject to the
memorandum and articles of association of the company, the directors of the company
resolve to hold such shares in the name of the company as treasury shares prior to the
purchase. Where shares of a company are held as treasury shares, the company shall be
entered in the register of members as holding those shares, however, notwithstanding the
foregoing, the company is not be treated as a member for any purpose and must not
exercise any right in respect of the treasury shares, and any purported exercise of such a
right shall be void, and a treasury share must not be voted, directly or indirectly, at any
meeting of the company and must not be counted in determining the total number of issued
shares at any given time, whether for the purposes of the company ’s articles of association
or the Cayman Islands Companies Act.
A company is not prohibited from purchasing and may purchase its own warrants
subject to and in accordance with the terms and conditions of the relevant warrant
instrument or certificate. There is no requirement under Cayman Islands law that a
company ’s memorandum or articles of association contain a specific provision enabling
such purchases and the directors of a company may rely upon the general power contained
in its memorandum of association to buy and sell and deal in personal property of all kinds.
Under Cayman Islands law, a subsidiary may hold shares in its holding company and,
in certain circumstances, may acquire such shares.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 21


--- page 544 ---
(e) Dividends and distributions
The Cayman Islands Companies Act permits, subject to a solvency test and the
p r o v i s i o n s ,i fa n y ,o fac o m p a n y’s memorandum and articles of association, the payment of
dividends and distributions out of the share premium account. With the exception of the
foregoing, there are no statutory provisions relating to the payment of dividends. Based
upon English case law, which is regarded as persuasive in the Cayman Islands, dividends
may be paid only out of profits.
No dividend may be declared or paid, and no other distribution (whether in cash or
otherwise) of a company ’s assets (including any distribution of assets to members on a
winding up) may be made to the company, in respect of a treasury share.
(f) Protection of minorities and shareholders ’ suits
The Cayman Islands courts (each the Court and together the Courts) ordinarily would
be expected to follow English case law precedents which permit a minority shareholder to
commence a representative action against or derivative actions in the name of a company
to challenge (a) an act which is ultra vires or illegal, (b) an act which constitutes a fraud
against the minority shareholder and the wrongdoers are themselves in control of the
company, and (c) an irregularity in the passing of a resolution which requires a qualified (or
special) majority.
In the case of a company (not being a bank) having a share capital divided into
shares, the Court may, on the application of members holding not less than one fifth of the
shares of the company in issue, appoint an inspector to examine into the affairs of the
company and to report thereon in such manner as the Court shall direct.
Any shareholder of a company may petition the Court which may make a winding up
order if the Court is of the opinion that it is just and equitable that the company should be
wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of
the company ’s affairs in the future, (b) an order requiring the company to refrain from doing
or continuing an act complained of by the shareholder petitioner or to do an act which the
shareholder petitioner has complained it has omitted to do, (c) an order authorising civil
proceedings to be brought in the name and on behalf of the company by the shareholder
petitioner on such terms as the Court may direct, or (d) an order providing for the purchase
of the shares of any shareholders of the company by other shareholders or by the company
itself and, in the case of a purchase by the company itself, a reduction of the company ’s
capital accordingly.
Generally claims against a company by its shareholders must be based on the
general laws of contract or tort applicable in the Cayman Islands or their individual rights
as shareholders as established by a company ’s memorandum and articles of association.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 22


--- page 545 ---
(g) Disposal of assets
The Cayman Islands Companies Act contains no specific restrictions on the power of
directors to dispose of assets of a company. However, as a matter of general law, every
officer of a company, which includes a director, managing director and secretary, in
exercising his powers and discharging his duties must do so honestly and in good faith with
a view to the best interests of the company and exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
(h) Accounting and auditing requirements
A company must cause proper books of account to be kept with respect to (i) all sums
of money received and expended by the company and the matters in respect of which the
receipt and expenditure takes place; (ii) all sales and purchases of goods by the company;
and (iii) the assets and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such
books as are necessary to give a true and fair view of the state of the company ’sa f f a i r s
and to explain its transactions.
An exempted company must make available at its registered office in electronic form
or any other medium, copies of its books of account or parts thereof as may be required of
it upon service of an order or notice by the T ax Information Authority pursuant to the T ax
Information Authority Act (Revised) of the Cayman Islands.
(i) Exchange control
There are no exchange control regulations or currency restrictions in the Cayman
Islands.
(j) Taxation
Pursuant to the T ax Concessions Act (Revised) of the Cayman Islands, the Company
has obtained an undertaking from the Governor-in-Cabinet:
(1) that no law which is enacted in the Cayman Islands imposing any tax to be
levied on profits, income, gains or appreciation shall apply to the Company or its
operations; and
(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax
shall not be payable on or in respect of the shares, debentures or other
obligations of the Company; or by way of the withholding in whole or in part of
any relevant payment as defined in the T ax Concessions Act (Revised) of the
Cayman Islands.
The undertaking for the Company is for a period of twenty years from 6 May 2022.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 23


--- page 546 ---
The Cayman Islands currently levy no taxes on individuals or corporations based
upon profits, income, gains or appreciations and there is no taxation in the nature of
inheritance tax or estate duty. There are no other taxes likely to be material to the
Company levied by the Government of the Cayman Islands save for certain stamp duties
which may be applicable, from time to time, on certain instruments executed in or brought
within the jurisdiction of the Cayman Islands. The Cayman Islands are a party to a double
tax treaty entered into with the United Kingdom in 2010 but otherwise is not party to any
double tax treaties.
(k) Stamp duty on transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman
Islands companies except those which hold interests in land in the Cayman Islands.
(l) Loans to directors
There is no express provision in the Cayman Islands Companies Act prohibiting the
making of loans by a company to any of its directors.
(m) Inspection of corporate records
Members of a company have no general right under the Cayman Islands Companies
Act to inspect or obtain copies of the register of members or corporate records of the
company. They will, however, have such rights as may be set out in the company ’sA r t i c l e s .
(n) Register of members
An exempted company may maintain its principal register of members and any branch
registers at such locations, whether within or without the Cayman Islands, as the directors
may, from time to time, think fit. A branch r egister must be kept in the same manner in
which a principal register is by the Cayman Islands Companies Act required or permitted to
be kept. A company shall cause to be kept at the place where the company ’s principal
register is kept a duplicate of any branch register duly entered up from time to time.
There is no requirement under the Cayman Islands Companies Act for an exempted
company to make any returns of members to the Registrar of Companies of the Cayman
Islands. The names and addresses of the members are, accordingly, not a matter of public
record and are not available for public inspection. However, an exempted company shall
make available at its registered office, in electronic form or any other medium, such
register of members, including any branch register of members, as may be required of it
upon service of an order or notice by the T ax Information Authority pursuant to the T ax
Information Authority Act (Revised) of the Cayman Islands.
(o) Register of Directors and Officers
A company is required to maintain at its reg istered office a register of directors and
officers which is not available for inspection by the public. A copy of such register must be
filed with the Registrar of Companies in the Cayman Islands and any change must be
notified to the Registrar within thirty (30) days of any change in such directors or officers.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 24


--- page 547 ---
(p) Beneficial Ownership Register
An exempted company is required to maintain a beneficial ownership register at its
registered office that records details of the persons who ultimately own or control, directly
or indirectly, more than 25% of the equity interests or voting rights of the company or have
rights to appoint or remove a majority of the directors of the company. The beneficial
ownership register is not a public document and is only accessible by a designated
competent authority of the Cayman Islands.
Such requirement does not, however, apply to an exempted company with its shares
listed on an approved stock exchange, which includes the Stock Exchange. Accordingly, for
so long as the shares of a company are listed on the Stock Exchange, the company is not
required to maintain a beneficial ownership register.
(q) Winding up
A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily by
its members, or (c) under the supervision of the Court.
The Court has authority to order winding up in a number of specified circumstances
including where the members of the company have passed a special resolution requiring
the company to be wound up by the Court, or where the company is unable to pay its
debts, or where it is, in the opinion of the Court, just and equitable to do so. Where a
petition is presented by members of the company as contributories on the ground that it is
just and equitable that the company should be wound up, the Court has the jurisdiction to
make certain other orders as an alternative to a winding-up order, such as making an order
regulating the conduct of the company ’s affairs in the future, making an order authorising
civil proceedings to be brought in the name and on behalf of the company by the petitioner
on such terms as the Court may direct, or making an order providing for the purchase of
the shares of any of the members of the company by other members or by the company
itself.
A company (save with respect to a limited duration company) may be wound up
voluntarily when the company so resolves by special resolution or when the company in
general meeting resolves by ordinary resolution that it be wound up voluntarily because it
is unable to pay its debts as they fall due. In the case of a voluntary winding up, such
company is obliged to cease to carry on its business (except so far as it may be beneficial
for its winding up) from the time of passing the resolution for voluntary winding up or upon
the expiry of the period or the occurrence of the event referred to above.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 25


--- page 548 ---
For the purpose of conducting the proceedings in winding up a company and assisting
the Court therein, there may be appointed an off icial liquidator or official liquidators; and
the Court may appoint to such office such person, either provisionally or otherwise, as it
thinks fit, and if more persons than one are appointed to such office, the Court must
declare whether any act required or authorised to be done by the official liquidator is to be
done by all or any one or more of such persons. The Court may also determine whether
any and what security is to be given by an official liquidator on his appointment; if no
official liquidator is appointed, or during any vacancy in such office, all the property of the
company shall be in the custody of the Court.
As soon as the affairs of the company are fully wound up, the liquidator must make a
report and an account of the winding up, showing how the winding up has been conducted
and how the property of the company has been disposed of, and thereupon call a general
meeting of the company for the purposes of laying before it the account and giving an
explanation thereof. This final general meeting must be called by at least 21 days ’ notice to
each contributory in any manner authorised by the company ’s articles of association and
published in the Gazette.
(r) Reconstructions
There are statutory provisions which facilitate reconstructions and amalgamations
approved by (i) seventy-five per cent. ( 75%) in value of shareholders or class of
shareholders, or (ii) a majority in number representing seventy-five per cent. (75%) in
value of creditors, as the case may be, as are present and voting either in person or by
proxy at a meeting called for such purpose and thereafter sanctioned by the Court. Whilst a
dissenting shareholder would have the right to express to the Court his view that the
transaction for which approval is sought would not provide the shareholders with a fair
value for their shares, the Court is unlikely to disapprove the transaction on that ground
alone in the absence of evidence of fraud or bad faith on behalf of management.
The Cayman Islands Companies Act also contains statutory provisions which provide
that a company may present a petition to the Court for the appointment of a restructuring
officer on the grounds that the company (a) is or is likely to become unable to pay its debts
within the meaning of section 93 of the Cayman Islands Companies Act; and (b) intends to
present a compromise or arrangement to its creditors (or classes thereof) either, pursuant
to the Cayman Islands Companies Act, the law of a foreign country or by way of a
consensual restructuring. The petition may be presented by a company acting by its
directors, without a resolution of its shareholders or an express power in its articles of
association. On hearing such a petition, the Court may, among other things, make an order
appointing a restructuring officer or mak e any other order as the Court thinks fit.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 26


--- page 549 ---
(s) Take-overs
Where an offer is made by a company for the shares of another company and, within
four (4) months of the offer, the holders of not less than ninety per cent. (90%) of the
shares which are the subject of the offer accept, the offeror may at any time within two (2)
months after the expiration of the said four (4) months, by notice in the prescribed manner
require the dissenting shareholders to transfer their shares on the terms of the offer. A
dissenting shareholder may apply to the Court within one (1) month of the notice objecting
to the transfer. The burden is on the dissenting shareholder to show that the Court should
exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or
bad faith or collusion as between the offeror and the holders of the shares who have
accepted the offer as a means of unfairly forcing out minority shareholders.
(t) Indemnification
Cayman Islands law does not limit the extent to which a company ’sa r t i c l e so f
association may provide for indemnification of officers and directors, except to the extent
any such provision may be held by the Court to be contrary to public policy (e.g. for
purporting to provide indemnification against the consequences of committing a crime).
(u) Economic Substance Requirements
Pursuant to the International T ax Cooperation (Economic Substance) Act (Revised) of
the Cayman Islands ( ‘‘ES Act ’’) that came into force on 1 January 2019, a ‘‘relevant entity ’’
is required to satisfy the economic substance test set out in the ES Act. A ‘‘relevant entity ’’
includes an exempted company incorporated in the Cayman Islands as is the Company;
however, it does not include an entity that is tax resident outside the Cayman Islands.
Accordingly, for so long as the Company is a tax resident outside the Cayman Islands,
including in Hong Kong, it is not required to satisfy the economic substance test set out in
the ES Act.
4. GENERAL
Ogier, the Company ’s legal counsel as to Cayman Islands law, have sent to the Company a
letter of advice summarising ce rtain aspects of Cayman Islands Companies Act. This letter,
together with a copy of the Cayman Islands Companies Act, is available for inspection as
r e f e r r e dt oi nt h es e c t i o nh e a d e d‘‘Documents delivered to the R egistrar of Companies and
available on display – B. Documents available on display ’’ in Appendix VI to this prospectus.
Any person wishing to have a detailed summary of Cayman Islands Companies Act or advice on
the differences between it and the laws of any jurisdiction with which he is more familiar is
recommended to seek independent legal advice.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANIES ACT
IV – 27


--- page 550 ---
A. FURTHER INFORMATION ABOUT THE COMPANY
1. Incorporation of the Company
The Company was incorporated in the Cayman Islands under the Cayman Islands
Companies Act as an exempted company wit h limited liability on 20 April 2022. The
Company has established its principal place of business in Hong Kong at 5/F , Manulife
Place, 348 Kwun T ong Road, Kowloon, 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 6 July 2022. Ms. Wong Wai Yee, Ella, a joint company secretary,
has been appointed as the authorised representative of the Company for the acceptance of
service of process and notices on behalf of the Company in Hong Kong.
As the Company was incorporated in the Cayman Islands, it is subject to the Cayman
Islands Companies Act, the Memorandum and the Articles and the applicable laws of the
Cayman Islands. A summary of certain provisions of the Memorandum and the Articles and
relevant aspects of the Cayman Islands Companies Act is set out in ‘‘Summary of the
constitution of the Company an d Cayman Islands Companies Act ’’ in Appendix IV to this
prospectus.
2. Changes in the share capital of the Company
As of the date of incorporation of the Company, the authorised share capital of the
Company was HK$100,000 divided into 1,000,000 Shares of HK$0.1 each. Upon its
incorporation, one fully paid Share was allotted and issued to an initial subscriber who is
an Independent Third Party on 20 April 2022, which was then transferred to GT & Yangtze
on 26 May 2022. On the same date, 757,267 Shares, 71,839 Shares and 71,839 Shares
were alloted and issued GT & Yangtze, Huat H uat and Octuple Hills, respectively. On 7
July 2022, 43,291 Shares, 26,339 Shares, 13,518 Shares, 5,793 Shares and 10,113
Shares were alloted to You Po BVI, Ying Hua BVI, Shu Zhi Cayman, Rui Da BVI and Ms.
Yeung, respectively.
On 15 May 2023, the Company ’s authorised share capital was increased from
HK$100,000 divided into 1,000,000 Shares with a par value of HK$0.1 each to HK$101,126
divided into 1,011,260 Shares with a par value of HK$0.1 each. Pursuant to the written
resolutions of the Shareholders passed on 17 June 2024, the authorised share capital of
the Company was increased from HK$101,126 to HK$100,000,000 by the creation of
additional 998,988,740 Shares, and following such increase, the authorised share capital of
the Company was HK$100,000,000 divided into 1,000,000,000 Shares of HK$0.1 each.
Immediately following completion of the Capitalisation Issue and the Global Offering
and without taking into account any Shares which may be issued upon the exercise of the
Over-allotment Option or any options which may be granted under the Share Option
Scheme, the issued share capital of the Company will be HK$64,000,000 divided into
640,000,000 Shares, all fully paid or credited as fully paid, and 360,000,000 Shares will
remain unissued.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 1


--- page 551 ---
Save as disclosed above and as mentioned in ‘‘ – 5. Written resolutions of the
S h a r e h o l d e r sp a s s e do n1 7J u n e2 0 2 4’’ below, there has been no alteration in the share
capital of the Company since its incorporation.
3. Particulars of the Group ’s subsidiaries
Particulars of the Group ’s subsidiaries are set forth in Note 1 of the Accountants ’
Report.
4. Changes in the share capital or the registered capital of the Group ’s subsidiaries
Save as disclosed in ‘‘History and Reorganisation ’’ in this prospectus, there has been
no alteration in the share capital or the registered capital of the Group ’s subsidiaries within
the two years preceding the date of this prospectus.
5. Written resolutions of the Shareholders passed on 17 June 2024
Pursuant to the written resolutions passed by the Shareholders on 17 June 2024,
among other matters:
(a) The Company approved and conditionally adopted the Memorandum and the
Articles which will become effective upon Listing;
(b) the authorised share capital of the Company was increased from HK$101,126
divided into 1,011,260 Shares to HK$100,000,000 by the creation of additional
998,988,740 Shares ranking in pari passu in all respects with the existing Shares
with immediate effect;
(c) conditional on (aa) the Stock Exchange granting the approval for the listing of,
a n dp e r m i s s i o nt od e a li n ,t h eS h a r e si ni s s u ea n dS h a r e st ob ea l l o t t e da n d
issued pursuant to the Capitalisation Issue, the Global Offering and as
mentioned in this prospectus including the Shares which may be allotted and
issued pursuant to the exercise of the Over-allotment Option or any options
which may be granted under the Share Option Scheme; (bb) the Offer Price
having been duly determined; and (cc) the obligations of the Underwriters under
the Underwriting Agreements becoming unconditional and not being terminated
in accordance with the terms of such agreements (or any conditions as specified
in this prospectus), in each case on or before the dates and times specified in
the Underwriting Agreements:
(i) the Global Offering was approved and the Directors were authorised to allot
and issue the Offer Shares pursuant to the Global Offering;
(ii) the Over-allotment Option was appro ved and the Directors were authorised
to allot and issue the Shares upon the exercise of the Over-allotment
Option;
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 2


--- page 552 ---
(iii) the rules of the Share Option Schem e, the principal terms of which are set
out in ‘‘D. Share Option Scheme ’’ below in this appendix, were approved
and adopted and the Directors were authorised, at their absolute discretion,
to grant options to subscribe for Shares thereunder and to allot, issue and
deal with Shares pursuant to the exercise of options granted under the
S h a r eO p t i o nS c h e m e ;
(iv) conditional on the share premium account of the Company being credited
as a result of the Global Offering, the Directors were authorised to capitalise
the sum of HK$47,898,874.9 standing to the credit of the share premium
account of the Company by applying such sum in paying up in full at par
478,988,749 Shares for allotment and issue to holders of Shares whose
names appear on the register of members of the Company on the date of
passing this resolution in proportion (as near as possible without involving
f r a c t i o n ss ot h a tn of r a c t i o no fas h a r es h a l lb ea l l o t t e da n di s s u e d )t ot h e i r
then existing respective shareholdings in the Company;
(v) a general unconditional mandate was given to the Directors to allot, issue
and deal with (including the power to make an offer or agreement, or grant
securities which would or might require Shares to be allotted and issued),
otherwise than pursuant to a rights issue or pursuant to any scrip dividend
schemes or similar arrangements providing for the allotment and issue of
Shares in lieu of the whole or part of a dividend on Shares in accordance
with the Articles or pursuant to the grant of options under the Share Option
Scheme or other similar arrangements or pursuant to a specific authority
granted by the Shareholders in general meeting, unissued Shares not
exceeding the aggregate of 20% of the number of issued Shares
immediately following the completion of the Capitalisation Issue and Global
Offering (but taking no account of any Shares which may be allotted and
issued pursuant to the exercise of the Over-allotment Option or any options
which may be granted under the Share Option Scheme), such mandate to
remain in effect until the conclusion of the next annual general meeting of
the Company, or the expiration of the period within which the next annual
general meeting of the Company is required by the Articles or any
applicable laws to be held, or until r e v o k e do rv a r i e db ya no r d i n a r y
resolution of the Shareholders in general meeting, whichever occurs first;
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 3


--- page 553 ---
(vi) a general unconditional mandate was given to the Directors authorising
them to exercise all powers of the Company to buy back on the Stock
Exchange or on any other approved stock exchange on which the securities
of the Company may be listed and which is recognised by the SFC and the
Stock Exchange for this purpose such number of Shares as will represent
up to 10% of the number of issued Shares immediately following the
completion of the Capitalisation Issue and the Global Offering (but taking no
account of any Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option or any options which may be granted
under the Share Option Scheme), such mandate to remain in effect until the
conclusion of the next annual general meeting of the Company, or the
expiration of the period within which the next annual general meeting of the
Company is required by the Articles or any applicable laws to be held, or
until revoked or varied by an ordinary resolution of the Shareholders in
general meeting, whichever occurs first; and
(vii) the general unconditional mandate mentioned in paragraph (v) above was
extended by the addition to the number of issued Shares which may be
allotted and issued or agreed conditio nally or unconditio nally to be allotted
and issued by the Directors pursuant to such general mandate of an amount
representing the total number of issued Shares bought back by the
Company pursuant to the mandate to buy back Shares referred to in
paragraph (vi) above.
6. Reorganisation
In preparation for the Listing, the companies comprising the Group underwent the
Reorganisation and the Company became the holding company of the Group. For further
details with regard to the Reorganisation, see ‘‘History and Reorganisation ’’ in this
prospectus.
7. Buyback by the Company of its own securities
This section includes information required by the Stock Exchange to be included in
this prospectus concerning the buyback by the Company of its own securities.
(a) Provisions of the Listing Rules
The Listing Rules permit companies with a primary listing on the Stock Exchange
to purchase their shares on the Stock Exchange subject to certain restrictions.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 4


--- page 554 ---
(i) Shareholders ’ approval
The Listing Rules provide that all proposed buybacks of shares (which must
be fully paid in the case of shares) by a company with a primary listing on the
Stock Exchange must be approved in advance by an ordinary resolution of its
shareholders in general meeting, either by way of general mandate or by specific
approval of a particular transaction.
Note: Pursuant to the written resolutions passed by the Shareholders on 17 June 2024, a
general unconditional mandate (the ‘‘Buyback Mandate ’’) was granted to the Directors
authorising the buyback of shares by the Company on the Stock Exchange, or on any
other stock exchange on which the securities of the Company may be listed and which is
recognised by the SFC and the Stock Exchange for this purpose, with the total number
of Shares not exceeding 10% of the total number of Shares in issue and to be issued as
mentioned herein, at any time until the conclusion of the next annual general meeting of
the Company, the expiration of the period within which the next annual general meeting
of the Company is required by an applicable law or the Articles to be held or the date on
which such mandate is revoked or varied by an ordinary resolution of the Shareholders
in general meeting, whichever occurs first.
(ii) Source of funds
Buybacks must be funded out of funds legally available for the purpose in
accordance with the Memorandum and th e Articles, the Listing Rules and the
Cayman Islands Companies Act. A listed company may not buy back its own
shares on the Stock Exchange for a consideration other than cash or for
settlement otherwise than in accordance with the trading rules of the Stock
Exchange from time to time.
(iii) Core connected persons
The Listing Rules prohibit the Company from knowingly buying back the
Shares on the Stock Exchange from a ‘‘core connected person ’’, which includes a
director, chief executive or substantial shareholder of the Company or any of the
subsidiaries or a close associate of any of them and a core connected person
shall not knowingly sell his/her Shares to the Company.
(b) Reasons for buybacks
The Directors believe that it is in the best interests of the Company and its
Shareholders as a whole for the Directors to have a general authority from the
Shareholders to enable the Company to buy back Shares in the market. Such
buybacks may, depending on the market conditions and funding arrangements at the
time, lead to an enhancement of the Company ’s net asset value per Share and/or
earnings per Share and will only be made when the Directors believe that such
buybacks will benefit the Company and the Shareholders.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 5


--- page 555 ---
(c) Funding of buyback
In buying back Shares, the Company may only apply funds legally available for
such purpose in accordance with the Memorandum and Articles, the Listing Rules and
the applicable laws of the Cayman Islands.
It is presently proposed that any buyback of Shares will be made out of the
profits of the Company, the share premium amount of the Company or the proceeds of
a fresh issue of Shares made for the purpose of the buyback and, in the case of any
premium payable on the purchase over the par value of the Shares to be bought back
must be provided for, out of either or both of the profits of the Company or from sums
standing to the credit of the share premium account of the Company. If authorised by
the Articles and subject to the Cayman Islands Companies Act, any buyback of
Shares may also be paid out of capital.
On the basis of the current financial position of the Group as disclosed in this
prospectus and taking into account the current working capital position of the
Company, the Directors consider that, if the Buyback Mandate were to be exercised in
full, it might not have a material adverse effect on the working capital and/or the
gearing position of the Group as compared to the position disclosed in this
prospectus. However, the Directors do not propose to exercise the Buyback Mandate
to such an extent as would, in the circumstances, have a material adverse effect on
the working capital and/or the gearing position of the Group which in the opinion of
the Directors are from time to time appropriate for the Group.
(d) Share capital
The exercise in full of the Buyback Mandate, on the basis of 640,000,000 Shares
in issue immediately after the Listing (but not taking into account of the Shares which
may be issued pursuant to the exercise of the Over-allotment Option or any options
which may be granted under the Share Option Scheme), would result in up to
64,000,000 Shares being bought back by the Company during the period until:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of
the Company is required by any applicable law or the Articles to be held; or
(iii) the date on which the Buyback Mandate is revoked or varied by an ordinary
resolution of the Shareholders in general meeting, whichever occurs first.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 6


--- page 556 ---
(e) General
None of the Directors nor, to the best of their knowledge having made all
reasonable enquiries, any of their close associates (as defined in the Listing Rules),
has any present intention if the Buyback Mandate is exercised to sell any Share(s) to
the Company or its subsidiaries.
The Directors have undertaken to the Stock Exchange that, so far as the same
may be applicable, they will exercise the Buyback Mandate in accordance with the
Listing Rules and the applicable laws of the Cayman Islands.
If as a result of a buyback of Shares pursuant to the Buyback Mandate, a
Shareholder ’s proportionate interest in the voting rights of the Company increases,
such increase will be treated as an acquisition for the purposes of Hong Kong Codes
on T akeovers and Mergers and Share Buy-backs (the ‘‘Takeovers Code ’’).
Accordingly, a Shareholder or a group of Shareholders acting in concert (within the
meaning of the T akeovers Code), depending on the level of increase of the
Shareholders ’ interest, could obtain or consolidate control of the Company and may
become obliged to make a mandatory offer in accordance with Rule 26 of the
T akeovers Code as a result of any such increase. Save as disclosed above, the
Directors are not aware of any consequence that would arise under the T akeovers
Code as a result of a buyback pursuant to the Buyback Mandate. The Directors have
no present intention to exercise the power to buy back Shares to such extent.
If the Buyback Mandate is fully exercised immediately following completion of the
Capitalisation Issue and the Global Offering (but not taking into account the Shares
which may be issued pursuant to the exercise of the Over-allotment Option or any
options which may be granted under the Share Option Scheme), the total number of
Shares which will be bought back pursuant to the Buyback Mandate will be
64,000,000 Shares, being 10% of the total number of Shares based on the aforesaid
assumptions. The percentage sharehold ing of the Controlling S hareholders will be
increased to approximately 62.4% of the issued share capital of the Company
immediately following the full exercise of the Buyback Mandate. Any buyback of
Shares which results in the number of Shares held by the public being reduced to less
than the prescribed percentage of the Shares then in issue could only be implemented
with the approval of the Stock Exchange to waive the Listing Rules requirements
regarding the public float under Rule 8.08 of the Listing Rules. However, the Directors
have no present intention to exercise the Buyback Mandate to such an extent that, in
the circumstances, there is insufficient public float as prescribed under the Listing
Rules.
No core connected person of the Company has notified the Group that he/she/it
has a present intention to sell Shares to the Company, or has undertaken not to do
so, if the Buyback Mandate is exercised.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 7


--- page 557 ---
B. FURTHER INFORMATION ABOUT THE GROUP ’S BUSINESS
1. Summary of material contracts
The following contracts (not being contracts in the ordinary course of business) have
been entered into by members of the Group within the two years preceding the date of this
prospectus and are or may be material:
(a) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Mr. Liu Haoqiong, pursuant to which Mr. Liu
Haoqiong agreed to transfer 48.2905% of the equity interest in Zhonggan
Communication to Jiangxi Zhongge for a cash consideration of RMB66,542,109;
(b) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Ms. T ao Xiulan, pursuant to which Ms. T ao Xiulan
agreed to transfer 26.5937% of the equity interest in Zhonggan Communication
to Jiangxi Zhongge for a cash consideration of RMB36,644,812;
(c) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Mr. Liu Dingli, pursuant to which Mr. Liu Dingli
agreed to transfer 7.1039% of the equity interest in Zhonggan Communication to
Jiangxi Zhongge for a cash consideration of RMB9,788,880;
(d) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Mr. Liu Dingyi, pursuant to which Mr. Liu Dingyi
agreed to transfer 7.1039% of the equity interest in Zhonggan Communication to
Jiangxi Zhongge for a cash consideration of RMB9,788,880;
(e) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and You Po Investment, pursuant to which You Po
Investment agreed to transfer 4.2810% of the equity interest in Zhonggan
Communication to Jiangxi Zhongge for a cash consideration of RMB5,898,927;
(f) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Ying Hua Investment, pursuant to which Ying Hua
Investment agreed to transfer 2.6046% of the equity interest in Zhonggan
Communication to Jiangxi Zhongge for a cash consideration of RMB3,589,010;
(g) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Shu Zhi Shen Kong, pursuant to which Shu Zhi
Shen Kong agreed to transfer 1.3369% of the equity interest in Zhonggan
Communication to Jiangxi Zhongge for a cash consideration of RMB1,842,129;
(h) an equity transfer agreement （ 股權轉
讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Rui Da Xin T ao, pursuant to which Rui Da Xin T ao
agreed to transfer 0.5729% of the equity interest in Zhonggan Communication to
Jiangxi Zhongge for a cash consideration of RMB789,367;
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 8


--- page 558 ---
(i) an equity transfer agreement （ 股權轉讓協議 ）dated 22 August 2022 entered into
between Jiangxi Zhongge and Ms. Yeung, pursuant to which Ms. Yeung agreed
to transfer 1.0000% of the equity interest in Zhonggan Communication to Jiangxi
Zhongge for a cash consideration of RMB1,377,952;
(j) a waiver agreement dated 22 August 2022 entered into between Mr. Liu
Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu Dingyi, Jiangxi Zhongge and
Zhonggan Communication, pursuant to which Mr. Liu Haoqiong, Ms. T ao Xiulan,
Mr. Liu Dingli, Mr. Liu Dingyi agreed to wa ive the obligation of Jiangxi Zhongge
to pay them their respective considerations under the relevant equity transfer
agreements referred to in sub-p aragraphs (a) to (d) above;
(k) a waiver agreement dated 22 August 2022 entered into between Ms. Yeung,
Jiangxi Zhongge and Zhonggan Communication, pursuant to which Ms. Yeung
agreed to waive the obligation of Jiangxi Zhongge to pay her the consideration
under the relevant equity transfer agreement referred to in sub-paragraph (i)
above;
(l) an equity transfer agreement dated 20 February 2023 entered into between
Jiangxi Zhongge and Mr. Liu Dingyi, pursuant to which Mr. Liu Dingyi agreed to
transfer 1.1126% of the equity interest in Zhonggan Communication to Jiangxi
Zhongge for a cash consideration of RMB3,575,672.1;
(m) a waiver agreement dated 20 February 2023 entered into between Jiangxi
Zhongge, Mr. Liu Dingyi and Zhonggan Communication, pursuant to which Mr.
Liu Dingyi agreed to waive the obligation of Jiangxi Zhongge to pay him the
consideration of RMB3,575,672.1 under the equity transfer agreement referred to
in sub-paragraph (l) above;
(n) a termination agreement dated 14 December 2023 entered into among Mr. Liu
Haoqiong, Ms. T ao Xiulan, Mr. Liu Dingli, Mr. Liu Dingyi, Ms. Yeung, Jiangxi
Zhongge and Zhonggan Communication, pursuant to which the waiver
agreements referred to in sub-paragrap hs (j), (k) and (m) above were terminated
and the obligation of Jiangxi Zhongge to pay them their respective
considerations pursuant to the equity transfer agreements referred to in sub-
paragraphs (a) to (d), (i) and (l) above was revived;
(o) the Deed of Indemnity;
(p) the Deed of Non-Competition; and
(q) the Hong Kong Underwriting Agreement.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 9


--- page 559 ---
2. Intellectual property rights of the Group
(a) Trademarks
As of the Latest Practicable Date, the Group was the registered owner of the
following trademarks which, in the opinion of the Directors, are or may be material to
its business:
No. Trademark
Registration
number Class Name of registered owner
Place of
registration
Date of
registration Date of expiry
1.
 17292718 37 Zhonggan Communication PRC 28 August 2016 27 August 2026
2.
 17292616 42 Zhonggan Communication PRC 28 August 2016 27 August 2026
3.
 17578178 38 Zhonggan Communication PRC 21 September 2016 20 September
2026
4.
 17578188 38 Zhonggan Communication PRC 28 September 2016 27 September
2026
5.
 17578060 11 Zhonggan Communication PRC 28 September 2016 27 September
2026
6.
 17578367 40 Zhonggan Communication PRC 28 September 2016 27 September
2026
7.
 17578447 40 Zhonggan Communication PRC 28 September 2016 27 September
2026
8.
 17289454 9 Zhonggan Communication PRC 28 October 2016 27 October 2026
9.
 17291036 9 Zhonggan Communication PRC 14 November 2016 13 November
2026
10.
 17578291 11 Zhonggan Communication PRC 14 November 2016 13 November
2026
11.
 17578331 19 Zhonggan Communication PRC 14 November 2016 13 November
2026
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 10


--- page 560 ---
No. Trademark
Registration
number Class Name of registered owner
Place of
registration
Date of
registration Date of expiry
12.
 17578276 35 Zhonggan Communication PRC 14 November 2016 13 November
2026
13.
 17578109 19 Zhonggan Communication PRC 28 November 2016 27 November
2026
14.
 17292712 37 Zhonggan Communication PRC 28 August 2017 27 August 2027
15.
 17578372 35 Zhonggan Communication PRC 7 October 2017 6 October 2027
16.
 17292578 42 Zhonggan Communication PRC 7 October 2017 6 October 2027
17.
 50785416 37 Zhonggan Communication PRC 28 December 2021 27 December
2031
18.
 50788300 19 Zhonggan Communication PRC 7 October 2021 6 October 2031
19.
 50784306 35 Zhonggan Communication PRC 21 December 2021 20 December
2031
20.
 50796760 9 Zhonggan Communication PRC 21 December 2021 20 December
2031
21.
 50810820 11 Zhonggan Communication PRC 28 December 2021 27 December
2031
22.
 50796962 40 Zhonggan Communication PRC 7 October 2021 6 October 2031
23.
 50793492 38 Zhonggan Communication PRC 7 October 2021 6 October 2031
24.
 50791671 42 Zhonggan Communication PRC 21 December 2021 20 December
2031
25.
 305953834 35,37,42 Zhonggan Communication Hong Kong 10 May 2022 9 May 2032
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 11


--- page 561 ---
(b) Patents
As of the Latest Practicable Date, the Group was the registered owner of the
following patents in the PRC which, in the opinion of the Directors, are or may be
material to its business:
No. Patent Type Patent number Registered owner Date of Expiry
1. A Feeder Stripping Device
（ 一種饋線剝皮裝置 ）.........
Utility model
patent
ZL202020068696.2 Zhonggan
Communication
12 January
2030
2. A Cable Tying T ool
（ 一種線纜捆紮工具 ）.........
Utility model
patent
ZL202020090857.8 Zhonggan
Communication
14 January
2030
3. Equipment for Wireless
Communication Network
（ 無線通信網絡的設備 ）........
Invention
patent
ZL202010991482.7 Zhonggan
Communication
20 September
2040
4. Output Device for Wireless
Network Data Transmission
（ 無線網絡 數據傳輸的輸出裝置 ）..
Invention
patent
ZL202011256454.7 Zhonggan
Communication
10 November
2040
5. Digital Campus Payment
Management System Based on
Real-time Communication
（ 基於實時通信的智慧校園支付管
理系統 ）.................
Invention
patent
ZL202011282599.4 Zhonggan
Communication
16 November
2040
6. Intelligent Construction
Management System and
M e t h o dB a s e do nI m a g e
Communication
（ 基於圖像通信的智慧施工管理系
統和方法 ）...............
Invention
patent
ZL202110525044.6 Zhonggan
Communication
13 May 2041
7. Digital Light Poles for
Municipal Monitoring
（ 用於市政監檢測的智慧燈杆 ） ...
Invention
patent
ZL202110205403.X Zhonggan
Communication
23 February
2041
8. Progress Management System
and Method for Digital
Construction
（ 智慧施工的進度管理系統和方法 ）.
Invention
patent
ZL202110658596.4 Zhonggan
Communication
14 June 2041
9. Charging Pile Segmentation
Charging Method and System
B a s e do nP o w e rC a r r i e r
（ 基於電力載波的充電樁分段充電
方法及系統 ）..............
Invention
patent
ZL202211198112.3 Zhonggan
Communication
28 September
2042
10. Service-Based Variable Monitoring
Network and Its Operation
Method
（ 基於業務的可變監測網絡及其運
營方法 ）.................
Invention
patent
ZL202211093591.2 Zhonggan
Communication
7S e p t e m b e r
2042
11. Campus Bandwidth Resource
Allocation Method and System
Based on Xen Virtual Monitoring
（ 基於Xen 虛擬監測的校園帶寬資源
分配方法和系統 ）...........
Invention
patent
ZL202211050723.3 Zhonggan
Communication
30 August
2042
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 12


--- page 562 ---
No. Patent Type Patent number Registered owner Date of Expiry
12. Intelligent Early-warning Method
a n dS y s t e mo fB a s eS t a t i o n
B a s e do nM u l t i - s o u r c eD a t a
Analysis （ 基於多來源資料分析的
基站智慧預警方法及系統 ） .....
Invention
patent
ZL20231
1175187.4
Zhonggan
Communication
12 September
2043
13. The Invention Relates to an
Indoor Distributed Monitoring
Method and Monitoring Network
（ 一種室內分散式監測方法和監測
網路 ）..................
Invention
patent
ZL20231
1500842.9
Zhonggan
Communication
12 November
2043
14. The Invention Relates to a Multi-
base Station Intelligent
Scheduling Method and System
for Communication Switching
（ 一種用於通信切換的多基站智慧
調度方法及系統 ）...........
Invention
patent
ZL20231
0827043.6
Zhonggan
Communication
6J u l y2 0 4 3
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 13


--- page 563 ---
(c) Copyrights
As of the Latest Practicable Date, the Group had registered the following
copyrights in the PRC which, in the opinion of the Directors, are or may be material to
its business:
(i) Software
No. Copyright
Registration number/
Certificate number
First
publication date Registered owner
1. Gantong Communication Base Station
Intelligent Alarm Management System
V1.0
（ 贛通通信基站智能告警管理系統V1.0 ）...
2015SR111859 14 November 2014 Zhonggan
Communication
2. Gantong Communication Wireless
Coverage T est Software System V1.0
（ 贛通通信無線覆蓋測試軟件系統V1.0 ）...
2015SR111830 20 June 2014 Zhonggan
Communication
3. Gantong Communication Indoor
Distributed Signal T est System V1.0
（ 贛通通信室內分佈信號測試系統V1.0 ）...
2015SR111846 15 August 2014 Zhonggan
Communication
4. Gantong Communication Base Station
Integrated Management Software
System V1.0
（ 贛通通信基站一體化管理軟件系統V1.0 ） .
2015SR112208 17 September 2014 Zhonggan
Communication
5. Gantong Communication Wired T est
Software System V1.0
（ 贛通通信有線測試軟件
系統V1.0 ）.....
2015SR112240 12 December 2014 Zhonggan
Communication
6. Gantong Communication ICT System
Integrated Intelligent Analysis System
V1.0
（ 贛通通信ICT 系統集成智能分析系統V1.0 ）
2015SR112041 16 May 2014 Zhonggan
Communication
7. Communication Room Inspection
Management System V1.0
（ 通信機房巡檢管理系統V1.0 ）........
2018SR119437 6 October 2017 Zhonggan
Communication
8. Short-term Monitoring System During the
External Power Access Project of
Communication Facilities V1.0
（ 通信設施外電接入工程期間短期監測系統
V1.0 ）.....................
2018SR120237 17 November 2015 Zhonggan
Communication
9. Communication Line Engineering Human
Well Harmful Gas Real-time Monitoring
Software V1.0
（ 通信線路工程人井有害氣體實時監測軟件
V1.0 ）.....................
2018SR120240 24 October 2015 Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 14


--- page 564 ---
No. Copyright
Registration number/
Certificate number
First
publication date Registered owner
10. Wireless Coverage Indoor Distribution
Passive Monitoring System V1.0
（ 無線覆蓋室內分佈無源監控系統V1.0 ）...
2018SR119453 24 June 2016 Zhonggan
Communication
11. Mobile Communication Room Division
Digital Management Platform V1.0
（ 移動通信室分數字化管理平台V1.0 ）....
2018SR119445 19 August 2016 Zhonggan
Communication
12. Information Engineering Optical Fiber
Network Access Management System
V1.0
（ 信息工程光纖網絡准入管理系統V1.0 ）...
2020SR0488616 28 February 2020 Zhonggan
Communication
13. Information Construction Energy Saving
Planning Simulation Platform V1.0
（ 信息化建設節能規劃仿真平台V1.0 ）....
2020SR0487627 17 March 2020 Zhonggan
Communication
14. Video Intercom System in Information
Construction V1.0
（ 信息建設中可視對講
系統V1.0 ） ......
2020SR0487641 10 January 2020 Zhonggan
Communication
15. Visual Monitoring and Management
Platform in Information Construction
V1.0
（ 信息建設中可視化監控管理平台V1.0 ）...
2020SR0487634 6 March 2020 Zhonggan
Communication
16. Anti-theft and Power Monitoring System in
Information System Integration Project
V1.0
（ 信息系統集成項目中防盜和動力監控系統
V1.0 ）.....................
2020SR0487647 13 January 2020 Zhonggan
Communication
17. Intelligent Control System Based on
Communication Pipeline Blowing Method
V1.0
（ 基於通信管道吹纜法智能控制系統V1.0 ） .
2020SR0162630 N/A Zhonggan
Communication
18. Police Comprehensive System Based on
Communication T echnology V1.0
（ 基於通信技術的警務綜合系統V1.0 ）....
2020SR0166720 N/A Zhonggan
Communication
19. Rapid Battery Detection Software V1.0
Based on Communication Construction
（
基於通信建設中蓄電池快速檢測軟件V1.0 ）
2020SR0162542 N/A Zhonggan
Communication
20. Communication Base Station, Computer
Room Power Environment Monitoring
System V1.0
（ 通信基站、機房動力環境監控系統V1.0 ） .
2020SR0165167 N/A Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 15


--- page 565 ---
No. Copyright
Registration number/
Certificate number
First
publication date Registered owner
21. Communication Base Station Environment
Intelligent Integrated Control System
V1.0
（ 通信基站環境智能綜合控制系統V1.0 ）...
2020SR0169195 N/A Zhonggan
Communication
22. Communication Base Station Construction
Project Management System V1.0
（ 通信基站建設項目管理系統V1.0 ）.....
2020SR0161940 N/A Zhonggan
Communication
23. Photovoltaic Ionisation Grid-connected
Control System in Communication Base
Station V1.0
（ 通信基站中的光伏發電離並網控制系統
V1.0 ）.....................
2020SR0161946 N/A Zhonggan
Communication
24. Mobile Communication Base Station
Equipment Comprehensive Detection
System V1.0
（ 移動通信基站設備綜合檢測系統V1.0 ）...
2020SR0165157 N/A Zhonggan
Communication
25. Converged Communication System Based
on Broadband and Narrowband
Convergence T echnology V1.0
（ 基於寬窄帶
融合技術的融合通信系統V1.0 ）
2020SR0161934 N/A Zhonggan
Communication
26. FFT-based Visible Light Communication
Indoor Positioning System V1.0
（ 基於FFT 的可見光通信室內定位系統V1.0 ）
2020SR0165162 N/A Zhonggan
Communication
27. Communication Room Old Equipment
Remote Manageable Protocol
Conversion Software V1.0
（ 通信機房老舊設備遠程可管理協議轉換軟件
V1.0 ）.....................
2018SR115801 16 December 2015 Zhonggan
Communication
28. Communication T ower Verticality Real-time
Monitoring System V1.0
（ 通信塔體垂直度實時監測系統V1.0 ）....
2018SR115701 29 December 2015 Zhonggan
Communication
29. Communication Line Routing Visualisation
Management System V1.0
（ 通信線路路由可視化管理系統V1.0
）....
2018SR113252 24 December 2015 Zhonggan
Communication
30. LTE Indoor Wireless Signal Parameter
Distribution Data T est System V1.0
（ LTE室內無線信號參數分佈數據測試系統
V1.0 ）.....................
2018SR111660 21 July 2016 Zhonggan
Communication
31. Intelligent WLAN T est Operation and
Maintenance System V1.0
（ 智能WLAN 測試運維系統V1.0 ）.......
2018SR115445 8 November 2016 Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 16


--- page 566 ---
No. Copyright
Registration number/
Certificate number
First
publication date Registered owner
32. Centralised Control Cloud Desktop
System Software V1.0
（ 集控雲桌面系統軟件V1.0 ）.........
2019SR1353532 30 April 2019 GLP T echnology
33. Command Center Visualisation System
Software V1.0
（ 指揮中心可視化系統軟件V1.0 ） ......
2019SR1353327 29 May 2018 GLP T echnology
34. LED Display Cluster Cloud Monitoring
Platform Software V1.0
（ LED 顯示屏集群雲監控平台軟件V1.0 ）...
2019SR1386196 31 July 2018 GLP T echnology
35. Information Cluster Remote Publishing
System Software V1.0
（ 信息集群遠程發佈系統軟件V1.0 ）.....
2019SR1352929 31 July 2018 GLP T echnology
36. Jiangxi Province Digital Grain Depot
Integrated Management System V1.0
（ 江西省智慧糧庫綜合管理系統V1.0 ）....
2019SR1353541 28 August 2018 GLP T echnology
37. Qingshan Lake Digital Urban Management
Platform V1.0
（ 青山湖智慧城管平台V1.0 ）.........
2019SR1353317 26 September 2018 GLP T echnology
38. Human Portrait Intelligent Analysis Based
on Big Data and Application Software
V1.0
（ 基於大數據人體畫像智能分析與應用軟件
V1.0 ）.....................
2019SR1361953 14 November 2018 GLP T echnology
39. IBMS Building Intelligent Management
Platform Software V1.0
（ IBMS 建築智能化管理平台軟件V1.0 ）...
2019SR1386190 26 November 2018 GLP T echnology
40. Clap++ Big Data Accurate Decision
Analysis Software V1.0
（ Clap++ 大數據精準決策分析軟件V1.0 ）..
2019SR1386790 25 December 2018 GLP T echnology
41. Digital AI Intelligent Data Analysis
Platform V1.0
（ 智慧AI智能數據分析平台V1.0 ） ......
2019SR1363017 28 February 2019 GLP T echnology
42. Kore Online Operation and Maintenance
Monitoring System V1.0
（ Kore 在線運維監測系統V1.0 ）........
2019SR1386184 20 March 2019 GLP T echnology
43. Dynamic Automatic Recognition and
Scene Based on Security Portrait
Application Software V1.0
（ 基於安防人像動態自動識別與場景應用軟件
V1.0 ）.....................
2019SR1359237 28 May 2019 GLP T echnology
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 17


--- page 567 ---
No. Copyright
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44. Digital Bracelet Positioning Management
Software V1.0
（ 智能手環定位管理軟件V1.0 ）........
2019SR1353212 25 June 2019 GLP T echnology
45. 3D Modeling Design Software Based on
Data Acquisition V1.0
（ 基於數據採集3D建模設計軟件V1.0 ） ...
2019SR1353734 25 September 2018 GLP T echnology
46. Computer Room Power Environment
Monitoring System Management
Software V1.0
（ 機房動力環境監控系統管理軟件V1.0 ）...
2019SR1386348 12 November 2019 GLP T echnology
47. Gantong LED Display Centralised Control
System V1.0
（ 贛通LED 顯示屏集控系統V1.0 ） ......
2020SR0736318 12 May 2020 Zhonggan
Communication
48. Gantong Engine Room Power
Environment Monitoring System V1.0
（ 贛通機房動力環境監控系統V1.0 ）.....
2020SR0736325 19 February 2020 Zhonggan
Communication
49. Gantong Equipment Intelligent Patrol
Management System V1.0
（ 贛
通設備智能巡更管理系統V1.0 ）.....
2020SR0735936 18 February 2020 Zhonggan
Communication
50. Gantong Small Area Cloud Management
System V1.0
（ 贛通小區域雲管理系統V1.0 ）........
2020SR0736305 28 April 2020 Zhonggan
Communication
51. Gantong Information Cluster Remote
Publishing System V1.0
（ 贛通信息集群遠程發佈系統V1.0 ）.....
2020SR0736311 22 April 2020 Zhonggan
Communication
52. GTC Blockchain Big Data Platform V1.0
（ GTC 區塊鏈大數據平台V1.0 ）........
2021SR0389825 24 December 2020 GLP T echnology
53. Instant Messaging Collaboration Platform
V1.0
（ 即時通訊協作平台V1.0 ）..........
2021SR0389762 30 December 2020 GLP T echnology
54. IoT Data Fusion Computing Platform V1.0
（ 物聯數據融合計算平台V1.0 ）........
2021SR0440471 2 February 2021 Zhonggan
Communication
55. Blockchain-based Public Safety Video
Image Information Sharing System V1.0
（ 基於區塊鏈的公共安全視頻圖像信息共享系
統V1.0 ）....................
2021SR0440496 8 February 2021 Zhonggan
Communication
56. Crowd Flow Big Data Alarm System V1.0
（ 人群流動大數據告警系統V1.0 ） ......
2021SR0393126 18 February 2021 Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
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57. Data Acquisition Automatic Calibration
System V1.0
（ 數據採集自動校準系統V1.0 ）........
2021SR0393125 8 February 2021 Zhonggan
Communication
58. Video Distributed Compression Storage
System V1.0
（ 視頻分佈式壓縮存儲系統V1.0 ） ......
2021SR0393124 5 February 2021 Zhonggan
Communication
59. Wireless IoT Device Automatic Networking
System V1.0
（ 無線物聯設備自動組網系統V1.0 ）.....
2021SR0393123 9 February 2021 Zhonggan
Communication
60. Big Data Distributed Storage Encryption
System V1.0
（ 大數據分佈式存儲加密系統V1.0 ）.....
2021SR0393122 4 February 2021 Zhonggan
Communication
61. Key Frame Dynamic Capture Analysis
System V1.0
（ 關鍵幀動態捕捉分析系統V1.0 ） ......
2021SR0393121 6 February 2021 Zhonggan
Communication
62. Big Data Network Fault Analysis System
V1.0
（ 大數據網絡故障分析系統V1.0 ） ......
2021SR0393120 5 February 2021 Zhonggan
Communication
63. Blockchain-based Engineering Dynamic
Supervision System V1.0
（ 基於區塊鏈的工程動態監管系統V1.0 ）...
2021SR0392998 7 February 2021 Zhonggan
Communication
64. Urban Governance Dynamic Supervision
System V1.0
（ 城市治理動態監管系統V1.0 ）........
2021SR0393002 3 February 2021 Zhonggan
Communication
65. Urban Waste Big Data Decision System
V1.0
（ 城市垃圾大數據決策系統V1.0 ） ......
2021SR0393001 2 February 2021 Zhonggan
Communication
66. Video Big Data Retrieval System V1.0
（ 視頻大數據檢索系統V1.0 ）.........
2021SR0393014 3 February 2021 Zhonggan
Communication
67. Merchant Electronic Credible Certificate
and Photo Deposit System V1.0
（ 商戶電子可信證照存證系統V1.0 ）.....
2021SR0393013 1 February 2021 Zhonggan
Communication
68. Front-end Image Acquisition Encryption
System V1.0
（ 前端圖像採集加密系統V1.0 ）........
2021SR0393012 10 February 2021 Zhonggan
Communication
69. Cloud Platform Video Quality Diagnosis
Service System V1.0
（ 雲平台視頻質量診斷服務系統V1.0 ）....
2021SR0392942 10 February 2021 Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 19


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70. Blockchain-based Police Instant
Messaging System V1.0
（ 基於區塊鏈的警務即時通訊系統V1.0 ）...
2021SR0393280 9 February 2021 Zhonggan
Communication
71. Law Enforcement Data Distributed
Storage System V1.0
（ 執法數據分佈式存儲系統V1.0 ） ......
2021SR0393279 7 February 2021 Zhonggan
Communication
72. Hyper-converged Video Big Data
Optimisation System V1.0
（ 超融合視頻大數據優化系統V1.0 ）.....
2021SR0393278 1 February 2021 Zhonggan
Communication
73. Gantong Information Platform Monitoring
System V1.0
（ 贛通信息化平台監控系統V1.0 ） ......
2021SR1584517 16 August 2021 Zhonggan
Communication
74. Gantong Communication Base Station
Network Monitoring Real-time
Transmission System V1.0
（ 贛通通信基站網絡監測實時傳輸系
統V1.0 ）
2021SR1584516 4 August 2021 Zhonggan
Communication
75. Gantong Intelligent Instrument
Management System Software V1.0
（ 贛通智能化儀錶管理系統軟件V1.0 ）....
2021SR1584515 20 August 2021 Zhonggan
Communication
76. Gantong Engine Room Power
Environment Monitoring System V2.0
（ 贛通機房動力環境監控系統V2.0 ）.....
2021SR1580196 25 August 2021 Zhonggan
Communication
77. Communication Base Station Construction
Project Management System V2.0
（ 通信基站建設項目管理系統V2.0 ）.....
2021SR1580195 28 August 2021 Zhonggan
Communication
78. Gantong Communication Base Station
T emperature Intelligent Control Software
V1.0
（ 贛通通信基站溫度智能控制軟件V1.0 ）...
2021SR1583947 10 August 2021 Zhonggan
Communication
79. Base Station Non-dependent Detection
System V1.0
（ 基站無依托檢測系統V1.0 ）.........
2021SR1518975 31 December 2020 GLP T echnology
80. Super Standard Grain Supervision
Platform V1.0
（ 超標糧監管平台V1.0 ）............
2021SR1518976 30 December 2020 GLP T echnology
81. Blockchain Digital Water Platform V1.0
（ 區塊鏈智慧水務平台V1.0 ）.........
2021SR1518977 24 December 2020 GLP T echnology
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 20


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82. Grain Depot Dynamic Supervision System
V1.0
（ 糧庫動態監管系統V1.0 ）..........
2021SR1518978 17 December 2020 GLP T echnology
83. Independent Communication Base Station
Internal Equipment Energy-saving
Performance Evaluation Software V1.0
（ 獨立通信基站內部設備節能性能評估軟件
V1.0 ）.....................
2022SR0752903 1 April 2022 Zhonggan
Communication
84. Non-synchronous Communication Network
Communication Base Station Positioning
System Control Software V1.0
（ 非同步方式的通信網通信基站定位元系統控
制軟件V1.0 ）.................
2022SR0752904 4 April 2022 Zhonggan
Communication
85. Communication Base Station Substation
Speculative Clustering Algorithm
Simulation Software V1.0
（ 通信基站變電站推測聚類算法模擬軟件
V1.0 ）.....................
2022SR0752905 6 April 2022 Zhonggan
Communication
86. Communication Base Station
Electromagnetic Radiation Prediction
Formula Simulation Software V1.0
（ 通信基站電磁輻射預測公式模擬軟件V1.0 ）
2022SR0752547 13 April 2022 Zhonggan
Communication
87. Clap Intelligent Analysis Decision Artificial
Perception Database System V1.0
（ clap 智能分析決策人工感知數據庫系統
V1.0 ）.....................
2022SR0765300 28 December 2021 GLP T echnology
88. Blockchain Integrated Supervision System
V1.0
（ 區塊鏈綜合監管系統V1.0 ）.........
2022SR0655600 30 December 2021 GLP T echnology
89. Clap Urban Blockchain Data Security
Authentication Service System V1.0
（ clap 城市區塊鏈數據安全驗真服務系統
V1.0 ）.....................
2022SR0765292 22 December 2021 GLP T echnology
90. Clap IoT-based Intelligent Monitoring HD
Video Decoding Management System
V1.0
（ clap 基於物聯網智慧監控高清視
頻解譯碼管
理系統V1.0 ）.................
2022SR0765293 31 December 2021 GLP T echnology
91. Clap Base Station Server Room Non-
dependent Detection and Monitoring
System V1.0
（ clap 基站機房無依托檢測及監測系統V1.0 ）
2022SR0769569 23 December 2021 GLP T echnology
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 21


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No. Copyright
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92. Communication Base Station Air
Conditioning Energy-saving Control
Software V1.0
（ 通信基站空調節能控制軟件V1.0 ）.....
2022SR0772619 18 April 2022 Zhonggan
Communication
93. Communication Base Station Generator
Intelligent Monitoring T erminal Software
V1.0
（ 通信基站發電機智能監控終端軟件V1.0 ） .
2022SR0772521 20 April 2022 Zhonggan
Communication
94. Communication Base Station T emperature
Control and Regulation Background
System Software V1.0
（ 通信基站溫控控制調節後台系統軟件V1.0 ）
2022SR0772520 25 April 2022 Zhonggan
Communication
95. Medical Management Collaborative Office
System Software V1.0
（ 醫療管理協同辦公系統軟件V1.0 ）.....
2022SR1123650 23 June 2022 GLP T echnology
96. Digital Parking Management Cloud
Platform Software V1.0
（ 智慧停車場管理雲平台
軟件V1.0 ）.....
2022SR1123548 22 June 2022 GLP T echnology
97. Digital City Management Application
Platform System V1.0
（ 數位城管應用平台系統V1.0 ）........
2022SR1123639 6 July 2022 GLP T echnology
98. Intelligent Community Security Monitoring
System Software V1.0
（ 智慧社區安防監控系統軟件V1.0 ）.....
2022SR1123752 6 July 2022 GLP T echnology
99. Intelligent Grain Silo T emperature Real-
time Collection Software V1.0
（ 智慧糧倉溫度實時採集軟件V1.0 ）.....
2022SR1123623 5 July 2022 GLP T echnology
100. Intelligent Factory Production Equipment
Operation Management Software V1.0
（ 智慧工廠生產設備運行管理軟件V1.0 ）...
2022SR1123622 21 June 2022 GLP T echnology
101. Hospital Infection Management Software
Based on Medical Management V1.0
（ 基於醫療管理的醫院感染管理軟體V1.0 ） .
2022SR1182854 27 June 2022 GLP T echnology
102. Digital Hospital Information Integration
and Interaction Platform V1.0
（ 智慧醫院信息集成與交互平台V1.0 ）....
2022SR1279946 22 June 2022 GLP T echnology
103. Clap VR Remote Interactive Classroom
Platform V1.0
（ Clap VR 遠程互動教室平台V1.0 ）.....
2023SR0381118 31 March 2022 GLP T echnology
APPENDIX V STATUTORY AND GENERAL INFORMATION
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No. Copyright
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104. Medical Digital Twin Visual Decision-
making Platform V1.0
（ 醫療數字孿生可視化決策平台V1.0 ）....
2023SR0382811 31 August 2022 GLP T echnology
105. Governmental Administration Cloud Office
Platform V1.0 （ 政務雲辦公平台V1.0 ）...
2023SR0392492 10 October 2022 GLP T echnology
106. Digital Campus Educational Service Cloud
Platform V1.0
（ 智慧校園教務服務雲平台V1.0 ） ......
2023SR0381117 31 May 2022 GLP T echnology
107. Digital Campus Educational Service Cloud
Platform V1.0
（ 智慧園區全生命服務平台V1.0 ） ......
2023SR0382812 10 June 2022 GLP T echnology
108. Intelligent Unmanned Aerial Vehicle Path
Planning Simulation System V1.0
（ 智慧無人機路徑規劃仿真系統V1.0 ）....
2023SR0382810 26 December 2022 GLP T echnology
109. Lightweight Online Project T ask
Collaboration System V1.0
（ 輕量級在線項目任務協作系統V1.0 ）....
2023SR0372019 31 January 2022 GLP T echnology
110. Communication Engineering Construction
Project Management System V1.0
（ 通信工程施工項目管理系統V1.0 ）.....
2023SR0372106 27 December 2022 Zhonggan
Communication
111. Communication Engineering Equipment
Safety Detection System V1.0
（ 通信工程設備安全檢測系統V1.0 ）.....
2023SR0381120 1 December 2022 Zhonggan
Communication
112. Communication Engineering Network
Comprehensive Coverage Site
Management Software V1.0
（ 通信工程網路綜合覆蓋站址管理軟件V1.0 ）
2023SR0401052 28 February 2022 Zhonggan
Communication
113. Communication Engineering Network
Troubleshooting Base Station
Troubleshooting Software V1.0
（ 通信工程網路疑難基站排査軟件V1.0 ）...
2023SR0392490 31 August 2022 Zhonggan
Communication
114. Radio Monitoring Equipment
Maintenance and Maintenance
Management System V1.0
（
無線電監測設備維修養護管理系統V1.0 ） .
2023SR0382806 10 May 2022 Zhonggan
Communication
115. Medical Knowledge Chain Digital
Platform V1.0
（ 醫識鏈數字平台V1.0 ）............
2023SR0381119 31 December 2022 Zhonggan
Communication
116. GTC Data Center Service Software V1.0
（ GTC 數據中台服務軟件V1.0 ）........
2023SRO371973 12 December 2022 Zhonggan
Communication
APPENDIX V STATUTORY AND GENERAL INFORMATION
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publication date Registered owner
117. GTC Carbon-free Base Station Wind
Power Monitoring Software V1.0
（ GTC 無碳基站風電監控軟件V1.0 ）.....
2023SR0382807 30 June 2022 Zhonggan
Communication
118. GTC Digital Internet of Things
Management Platform V1.0
（ GTC 智慧物聯網關管理平台V1.0 ）.....
2023SR0392487 5 December 2022 Zhonggan
Communication
119. GTC Automated Operation and
Maintenance Platform V1.0
（ GTC 自動化運維平台V1.0 ）.........
2023SR0381121 31 August 2022 Zhonggan
Communication
120. Communication Construction Schedule
and Resource Management
Software V1.0
（ 通信施工進度與資源管理軟件V1.0 ）....
2023SR1542009 22 September 2023 Zhonggan
Communication
121. Communication Construction Site Data
Acquisition and Analysis Software V1.0
（ 通信施工現場數據採集與分析軟件V1.0 ） .
2023SR1544979 11 September 2023 Zhonggan
Communication
122. Communication Construction Project Cost
Control and Forecast Software V1.0
（ 通信施工項目成本控制與預測軟件V1.0 ） .
2023SR1585823 22 September 2023 Zhonggan
Communication
123. Communication Construction Quality
Acceptance and Report Generation
System V1.0
（ 通信施工質量驗收與報告生成系統V1.0 ） .
2023SR1585977 22 September 2023 Zhonggan
Communication
124. Intelligent Communication Construction
Monitoring and Scheduling
Software V1.0
（ 智慧通信施工監測與調度軟件V1.0 ）....
2023SR1556293 8 September 2023 Zhonggan
Communication
125. Canoe Artificial Intelligence Speech
Training Software V1.0
（ Canoe 人工智慧語音訓練軟件V1.0 ）...
2023SR0677930 31 December 2022 GLP T echnology
126. CANOE Blockchain Big Data Analysis
Platform [Abbreviation: CANOE Digital
Intelligence Chain] V1.0
（ CANOE 區塊鏈大數據分析平
台[簡稱：
CANOE 數智鏈]V1.0 ）............
2023SR1146412 10 July 2022 GLP Software
127. VR Training System V1.0
（ VR實訓系統V1.0 ）..............
2023SR0914018 8 June 2023 GLP Software
APPENDIX V STATUTORY AND GENERAL INFORMATION
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No. Copyright
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Certificate number
First
publication date Registered owner
128. Digital Education Management Platform
V1.0
（ 智慧教務管理平台V1.0 ）..........
2023SR0915040 1 June 2023 GLP Software
129. Command Center Visualization System
Software V2.0
（ 指揮中心可視化系統軟件V2.0 ） ......
2024SR0159053 30 July 2023 GLP Software
130. Public Safety Video Image Information
Sharing System Based on Blockchain
（ 基於區塊鏈的公共安全視頻圖像信息共享系
統V2.0 ）....................
2024SR0159058 16 August 2023 GLP Software
(d) Domain names
As of the Latest Practicable Date, the Group had registered the following domain
name which, in the opinion of the Directo rs, is or may be material to its business:
No. Domain name Name of registered proprietor Date of registration Date of expiry
1. gantongjt.com. . . . . . Zhonggan Communication 14 June 2019 14 June 2029
2. gantong.net . . . . . . . Zhonggan Communication 13 April 2009 13 April 2027
3. claptech.net . . . . . . . GLP T echnology 4 June 2018 4 June 2026
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 25


--- page 575 ---
C. FURTHER INFORMATION ABOUT THE DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Directors
(a) Disclosure of Interests – Interests and short positions of the Directors and
the chief executive of the Company in the Shares, underlying Shares and
debentures of the Company and its associated corporations
Immediately following completion of the Capitalisation Issue and the Global
Offering and assuming that the Over-allotment Option or any option which may be
granted under the Share Option Scheme is not exercised, the interests or short
positions of Directors or chief executives of the Company in the shares, underlying
shares and debentures of the Company or its associated corporations (within the
meaning of Part XV of the SFO) which will be required to be notified to the Company
and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests or short positions 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 referre d to therein, or which will be required,
pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers
to be notified to the Company and the Stock Exchange once its Shares are listed will
be as follows:
Interest in the Company
Name of Director Nature of interest
Number of
Shares
interested (1)
Approximate
percentage of
interest (%)
Mr. Liu Haoqiong . . Interest in controlled
corporation (2)
359,444,530(L) 56.16
M r .L i uD i n g y i .... I n t e r e s ti nc o n t r o l l e d
corporation (3)
39,439,467(L) 6.16
M r .L i uD i n g l i ..... I n t e r e s ti nc o n t r o l l e d
corporation (4)
34,099,071(L) 5.33
Notes:
(1) The letter ‘‘L’’denotes the person ’sl o n gp o s i t i o ni nt h eS h a r e s .
(2) GT & Yangtze is owned as to 70.0% by Mr. Liu Haoqiong and as to 30.0% by Ms. T ao Xiulan,
the spouse of Mr. Haoqiong. By virtue of the SFO, Mr. Liu Haoqiong and Ms. T ao Xiulan are
deemed to be interested in the Shares held by GT & Yangtze.
(3) Octuple Hills is wholly-owned by Mr. Liu Dingyi. By virtue of the SFO, Mr. Liu Dingyi is deemed
to be interested in the Shares held by Octuple Hills.
(4) Huat Huat is wholly-owned by Mr. Liu Dingli. By virtue of the SFO, Mr. Liu Dingli is deemed to
be interested in the Shares held by Huat Huat.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 26


--- page 576 ---
Interest in associated corporation of the Company
Name of Director
Name of
associated
corporation
Nature of
interest
Number of
Shares
interested (Note)
Approximate
percentage of
interest (%)
Mr. Liu Haoqiong . . GT & Yangtze Beneficial
owner
359,444,530(L) 56.16
Note: The letter ‘‘L’’denotes the person ’sl o n gp o s i t i o ni nt h eS h a r e s .
(b) Particulars of service agreements and letters of appointment
Each of the executive Directors has ente red into a service agreement with the
Company for a term of three years commencing from the date of appointment or re-
designation as an executive Director, which may be terminated by not less than three
months ’ notice in writing served by either party on the other.
Each of the independent non-executive Directors has entered into a letter of
appointment with the Company for a term of three years commencing from the date of
appointment, which may be terminated by not less than three months ’ notice in writing
served by either party on the other.
(c) Directors ’ remuneration
Each of the executive Directors, namely Mr. Liu Haoqiong, Mr. Peng Shengqian,
Ms. Xie Xiaolan, Mr. Liu Dingli, Mr. Liu Dingyi and Mr. Zhou Zhiqiang, is entitled to an
annual remuneration of RMB0.9 million, RMB0.6 million, RMB0.3 million, RMB0.4
million, RMB0.1 million and RMB0.2 million , respectively. For the years ended 31
December 2021, 2022 and 2023, the aggregate remuneration (including fees, salaries,
contributions to pension schemes, bonus, retirement benefits scheme, allowance and
other benefits in kind) paid to the Direc tors was approximately RMB2.3 million,
RMB2.5 million and RMB1.5 million, respectively. For details, please refer to note 8 of
the Accountants ’ Report set out in Appendix I to this prospectus.
Each of the independent non-executive Directors has been appointed for a term
of three years. The Company intends to pay a director ’s fee of RMB72,000 per annum
to each of them. Save for directors ’ fees, none of the independent non-executive
Directors is expected to receive any other remuneration for holding their office as an
independent non-executive Director.
Under the arrangement currently in force, the aggregate remuneration (including
fees, salaries, bonus, contributions to retirement benefits scheme, allowances and
other benefits in kind) of the Directors for the year ending 31 December 2024 is
e s t i m a t e dt ob en om o r et h a nR M B 2 . 6m i l l i o n .
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 27


--- page 577 ---
2. Substantial shareholders
Save as disclosed in the section headed ‘‘Substantial Shareholders ’’ in this
prospectus, the Directors are not aware of any person (other than the Directors or chief
executive of the Company) who will, immediately following the completion of the
Capitalisation Issue and the Global Offering assuming that the Over-allotment Option or
any option which may be granted under the Share Option Scheme is not exercised, have or
be deemed or taken to have an interest and/or short position in the Shares or the
underlying Shares which would fall to be disclosed under the provisions of Division 2 and 3
of Part XV of the SFO, or who will be, directly or indirectly, interested in 10% or more of the
issued voting shares of the Company.
3. Agency fees or commissions received
Save as disclosed in the section headed ‘‘Underwriting ’’ in this prospectus, no
commissions, discounts, brokerages or other special terms were granted in connection with
the issue or sale of any capital of any member of the Group within the two years
immediately preceding the date of this prospectus.
4. Directors ’ Competing Interest
None of the Directors is interested in any business apart from the Group ’s business
which competes or is likely to compete, direc tly or indirectly, with the business of the
Group.
5. Disclaimers
(a) save as disclosed in this section, none of the Directors or chief executive of the
Company has any interest or short position in the shares, underlying shares or
debentures of the Company or any of its associated corporation (within the
meaning of the SFO) which will have t o be notified to the Company and the
Stock Exchange pursuant to Divisions 7 and 8 of Part XV 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 requ ired to be notified to the Company and
the Stock Exchange pursuant to the Model Code for Securities Transactions by
Directors of Listed Issuers once the Shares are listed;
(b) none of the Directors or experts referred to under ‘‘ – E. Other Information – 8.
Qualifications and consents of experts ’’ below has any direct or indirect interest
in the promotion of the 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 the Group, or are proposed to be
acquired or disposed of by or leased to any member of the Group;
(c) none of the Directors is materially interested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of the Group taken as a whole;
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 578 ---
(d) save as disclosed in this prospectus, none of the Directors has any existing or
proposed service contracts with any member of the Group (excluding contracts
expiring or determinable by the employer within one year without payment of
compensation (other than statutory compensation));
(e) taking no account of Shares which may be taken up under the Global Offering,
save as disclosed in this section, none of the Directors knows of any person (not
being a Director or chief executive of the Company) who will, immediately
following completion of the Global Offering, have an interest or short position in
the Shares or underlying Shares of the Company which would fall to be
disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of
SFO or be interested, directly or indirectly, in 10% or more of the issued voting
shares of any member of the Group; and
(f) so far as is known to the Directors, as of the Latest Practicable Date, none of the
Directors, their respective close associates (as defined under the Listing Rules)
or Shareholders of the Company who are interested in more than 5% of the total
number of issued Shares has any interests in the five largest customers of the
Group in each year during the Track Record Period or the five largest suppliers
of the Group in each year during the Track Record Period.
D. SHARE OPTION SCHEME
The following is a summary of the principal terms of the Share Option Scheme conditionally
adopted by the written resolutions of the Shareholders passed on 17 June 2024.
(a) Purpose
The purpose of the Share Option Scheme is to attract and retain the best available
personnel, to provide additional incentive to the Eligible Participants (as defined in
paragraph (b) below) for their contribution or potential contribution to the Group and to
promote the success of the business of the Group.
The Share Option Scheme will give the Eligib le Participants an opportunity to have a
personal stake in the Company and will help achieve the following objectives:
(i) motivate the Eligible Participants to optimise their performance and efficiency for
the benefit of the Group; and
(ii) attract and retain or otherwise maintain an on-going business relationship with
the Eligible Participants whose contribut ions are or will be beneficial the long-
term growth and profita bility of the Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 579 ---
(b) Eligible Participants
The Board may, at its absolute discretion, offer to grant options to subscribe for such
number of Shares as the Board may determine to any of the following classes of
participants (collectively the ‘‘Eligible Participants ’’):
(i) any director or employee of any member of our Group (including persons who
are granted options under the scheme as an inducement to enter into
employment contracts with these companies) (the ‘‘Employee Participant ’’);
(ii) any director or employee of any of the h olding companies, fellow subsidiaries or
associated companies of the Company (the ‘‘Related Entity Participant ’’); and
(iii) any person who provides services to the Group on a continuing or recurring
basis in its ordinary and usual course of business which are in the interests of
the long term growth of the Group (the ‘‘Service Provider ’’).
Service Providers include but are not limited to persons (natural persons, corporate
entities or otherwise) who work for the Group as independent contractors where the
continuity and frequency of their services are akin to those of employees, but excluding
placing agents or financial advisers providing advisory services for fundraising, mergers or
acquisitions, or professional service providers such as auditors or valuers who provide
assurance, or those who are required to perform their services with impartiality and
objectivity.
The basis of eligibility of any of the Eligible Participants shall be determined by the
Board from time to time at its sole discretion. In assessing the eligibility of any Employee
Participant or Related Entity Participant, the Board will consider all relevant factors as
appropriate, including, among others, (i) work performance; (ii) years of service; and (iii)
potential or actual contribution to the business of the Group.
The basis of eligibility of any Service Provider to the grant of any options shall be
determined by the Board from time to time at its sole discretion on the basis of his/its
contribution to the development and growth of, the degree of involvement in and/or
cooperation with the Group, length of the business relationship of the Group with the
Service Provider, and the actual or potential support, advice, efforts and contributions the
Service Provider has exerted and given towards the success of the Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 580 ---
(c) Acceptance of an offer of options
An option shall be deemed to have been granted and accepted by an Eligible
Participant and to have taken effect when the duplicate offer document constituting
acceptances of the options is duly signed by such Eligible Participant, together with a
remittance or payment in favour of the Company of HK$1.00 by way of consideration for
the grant thereof, is received by the Company on or before the relevant acceptance date.
Such remittance or payment shall in no circumstances be refundable. Any offer to grant an
option to subscribe for Shares may be accepted in respect of less than the number of
Shares for which it is offered provided that it is accepted in respect of a board lot for
dealing in Shares on the Stock Exchange or an integral multiple thereof and such number
is clearly stated in the duplicate offer document constituting acceptance of the option. T o
the extent that the offer to grant an option is not accepted by any prescribed acceptance
date, it shall be deemed to have been irrevocably declined by the Eligible Participant and
the offer shall lapse.
Subject to paragraphs (l), (m), (n), (o), (p) and (q), an option may be exercised in
whole or in part and, other than where it is exercised to the full extent outstanding, shall be
exercised in integral multiples of such number of Shares as shall represent one board lot
for dealing in Shares on the Stock Exchange for the time being, by the grantee by giving
notice in writing to the Company stating that the option is thereby exercised and the
number of Shares in respect of which it is exercised. Each such notice must be
accompanied by a remittance o r payment for the full amount of the exercise price for the
Shares in respect of which the notice is given. Within 21 days after receipt of the notice
and the remittance or payment and, where appropriate, receipt of the certificate by the
auditors to the Company or the approved independent financial adviser as the case may be
pursuant to paragraph (r), the Company shall a llot and issue the rele vant number of Shares
to the grantee credited as fully paid and issue to the grantee certificates in respect of the
Shares so allotted.
The exercise of any option shall be subject to the Shareholders in general meeting
approving any necessary increase in the authorised share capital of the Company.
(d) Scheme Mandate Limit and the Service Provider Sublimit
The maximum number of Shares which may be issued upon exercise of all options to
be granted under the Share Option Scheme must not in aggregate exceed 10% of the total
number of Shares in issue as of the Listing Date, being 64,000,000 Shares (the ‘‘Scheme
Mandate Limit ’’) .O p t i o n sl a p s e di na c c o r d a n c ew i t ht h et e r m so ft h eS h a r eO p t i o nS c h e m e
and any Other Scheme of the Company will not be counted for the purpose of calculating
the Scheme Mandate Limit.
Subject to the above, within the Scheme Mandate Limit, the total number of Shares
which may be issued upon exercise of all optio ns to be granted to Service Providers shall
not exceed 6,400,000 Shares, representing 1% of the total number of Shares in issue on
the Listing Date (the ‘‘Service Provider Sublimit ’’).
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 581 ---
The Service Provider Sublimit was determined with reference to the potential dilution
effect arising from grants to Service Providers, the actual or expected improvement of our
financial performance is attributable to Serv ice Providers and the time for using the Service
Provider in the activities of the Group. Cons idering the fact that there is no other share
schemes involving grant of new options over the Shares, organisational structures and that
Service Providers have contributed or is expected to contribute to the long-term growth of
the Company ’s business, the Board is of the view t hat the Service Provider Sublimit is
appropriate and reasonable.
The Board may, with the approval of the Shareholders in general meeting refresh, the
Scheme Mandate Limit and the Service Provider Sublimit after three years from the date of
the Shareholders ’ approval for the last refreshment or the Listing Date provided that the
t o t a ln u m b e ro fS h a r e sw h i c hm a yb ei s s u e du p o nt h ee x e r c i s eo fa l lO p t i o n st ob eg r a n t e d
under the Share Option Scheme and any other share schemes of the Company as
refreshed must not exceed 10% of the Shares in issue as at the date of approval of the
refreshment of the Scheme Mandate Limit and the Service Provider Sublimit. Refreshments
of Scheme Mandate Limit (and the Service Provider Sublimit) to be made within a three-
year period must be approved by the Shareholders in a manner in compliance with Rule
17.03C of the Listing Rules.
(e) Maximum entitlement of each individual
The total number of Shares issued and to be issued in respect of all options and
awards granted to each Eligible Participant under this Scheme and any other share
scheme(s) of the Company (excluding options and awards that have been lapsed in
accordance with the terms of the relevant share schemes) in any 12-month period up to
and including the date of such grant shall not in aggregate exceed 1% of the total number
of Shares in issue (the ‘‘1% Individual Limit ’’).
Any further grant of options or awards to an Eligible Participant in excess of the 1%
Individual Limit shall be subject to the approval of the Shareholders in general meeting with
such Eligible Participant and hi s close associates (or associate s if the Eligible Participant is
a connected person of the Company) abstaining from voting. The Company must send a
circular to the Shareholders disclosing the id entity of the Eligible Participant, the number
and terms of the options or awards to be granted (and those previously granted to such
Eligible Participant in the 12-month period) and such other information required under the
Listing Rules.
(f) Grant of options to connected persons
Any grant of options to a Director, chief executive or substantial shareholder of the
Company, or any of their respective associates, under the Share Option Scheme must be
approved by the independent non-executive Directors (excluding any independent non-
executive Director who is the proposed grantee of the options) and shall comply with the
relevant provisions of Chapter 17 of the Listing Rules.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 582 ---
Where any grant of options to a substantial shareholder or an independent non-
executive Director of the Company, or any of their respective associates, would result in
the Shares issued and to be issued in respect of all options and awards granted under all
share schemes of the Company (excluding any options and awards lapsed in accordance
with the terms of the relevant share schemes) to such person in the 12-month period up to
and including the date of such grant representing in aggregate over 0.1% of the Shares in
issue, such further grant of options must be approved by the Shareholders in general
meeting. Such grantee, his associates and all core connected persons of the Company
must abstain from voting on the resolution to approve such further grant of options. The
Company shall send to the Shareholders a circular containing the information required
under the Listing Rules for the purpose of seeking the approval of the Shareholders.
(g) Price of Shares
Subject to any adjustments made as described in paragraph (r) below, the exercise
price of a Share in respect of any particular option granted under the Share Option Scheme
shall be such price as the Board in its absolute discretion shall determine, save that such
price must be at least the higher of:
(i) the closing price of the Shares as stated in the Stock Exchange ’s daily
quotations sheet on the date of grant, which must be a business day; and
(ii) the average of the closing price of the Shares as stated in the Stock Exchange ’s
daily quotations sheet for the five business days immediately preceding the date
of grant.
(h) Restrictions on the times of grant of options
A grant of options may not be made after inside information has come to the
knowledge of the Company until (and including) the trading day after it has announced
such inside information pursuant to the requirements of the Listing Rules and the SFO. In
particular, no options may be granted dur ing the period commencing one month
immediately preceding the earlier of:
(i) the date of the Board meeting (as such date is first notified to the Stock
Exchange in accordance with the Listing Rules) for approving the Company ’s
results for any year, half-year, quarterly or other interim period (whether or not
required under the Listing Rules); and
(ii) the deadline on which the Company shall announce its results for any year or
half-year under the Listing Rules, or quarterly or other interim period (whether or
not required under the Listing Rules),
and ending on the date of the results announcement. No option may be granted during any
period of delay in publishing a results announcement.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 583 ---
Notwithstanding the above, a Director must not deal in any securities of the Company
(and no options may be granted to a Director) on any day on which its financial results are
published and:
(i) during the period of 60 days immediately preceding the publication date of the
annual results or, if shorter, the period from the end of the relevant financial year
up to the publication date of the results; and
(ii) during the period of 30 days immediately preceding the publication date of the
quarterly results (if any) and half-year results or, if shorter, the period from the
end of the relevant quarterly or half-year period up to the publication date of the
results,
unless the circumstances are exceptional which has to be met the requirements of the
Listing Rules.
(i) Rights are personal to grantee
An option and an offer to grant an option shall be personal to the grantee and shall
not be transferable or assignable. No grantee shall in any way sell, transfer, charge,
mortgage, encumber or create any interest (legal or beneficial) in favour of any third party
over or in relation to any option held by him/her or any offer relating to the grant of an
option made to him/her or attempt so to do (sa ve that the grantee may nominate a nominee
in whose name the Shares issued pursuant to the Share Option Scheme may be
registered). Any breach of the foregoing shall entitle the Company to cancel, revoke or
terminate any outstanding options or any part thereof granted to such grantee.
(j) Time of exercise of option and du ration of the Share Option Scheme
The vesting period for any option granted to any grantee shall not be less than twelve
(12) months from the date of grant of such option. An option may be exercised by a
grantee of an Option in accordance with the terms of the Share Option Scheme during the
option period which shall be determined by the Board in its absolute discretion, but in any
any event shall not exceed 10 years from the date of grant of the option. No option may be
offered or granted more than 10 years after the Listing Date. Subject to earlier termination
by the Company in general meeting or by the Board, the Share Option Scheme shall be
v a l i da n de f f e c t i v ef o rap e r i o do f1 0y e a r sf r o mt h eL i s t i n gD a t e .
(k) Performance target
A grantee may be required to achieve any performance targets as the Board may then
specify in the grant before any options granted under the Share Option Scheme can be
exercised.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 584 ---
(l) Rights on ceasing employment or death
If the grantee of an option ceases to be an employee or a director of the Company or
any of its subsidiaries or associated companies:
(i) by any reason other than death or termination of his or her employment or
directorship on the grounds specified in paragraph (m) below, the grantee may
exercise the option up to the entitlement of the grantee as at the date of
cessation (to the extent not already exercised) within a period of one month (or
such longer period as the Board may determine) from such cessation (which date
shall be the last actual working day with the Company or the relevant subsidiary
whether salary is paid in lieu of notice or not) or up to the expiration of the option
period, whichever is earlier; or
(ii) by reason of death, his/her personal representative(s) may exercise the option in
full (to the extent not already exercised) within a period of 12 months (or such
longer period as the Board may determine) from the date of death or up to the
expiration of the option period, whichever is earlier.
(m) Rights on dismissal
If the grantee of an option ceases to be an employee or a director of the Company or
any of its subsidiaries or associated companies on one or more grounds that he/she has
been guilty of serious misconduct, or has been convicted of any criminal offence involving
his/her integrity or honesty (if so determined by the Board), on any other ground on which
an employee or a director would be entitled to terminate his/her employment or directorship
at common law or pursuant to any applicable laws or under the grantee ’s service contract
or appointment letter with the relevant company, or has been convicted of any criminal
offence involving his/her integrity or honesty, his or her option (to the extent not already
exercised) shall lapse on the date of the termination of his/her employment or directorship
and not be exercisable.
( n ) R i g h t so nb r e a c ho fc o n t r a c t
If the grantee who is a Service Provider by reason of breach of contract entered into
between he/she/it and the Group, or termination of his/her/its engagement or appointment,
or the Board believes such grantee has become a competitor of the Group, or the Grantee
has become bankrupt or has become insolvent or has made any arrangement or
composition with his/her/its creditors gener ally, has committed any serious misconduct, or
has been convicted of any criminal offence, the options (to the extent not already
exercised) shall lapse on the date of the Board ’s determination and not be exercisable.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 35


--- page 585 ---
(o) Rights on takeover
If a general or partial offer is made to all the Shareholders (or all such Shareholders
other than the offeror and/or any person controlled by the offeror and/or any person acting
in concert with the offeror (as defined in the T akeovers Codes)) and such offer becomes or
is declared unconditional during the option period of the relevant option, the grantee of an
option shall be entitled to exercise the option in full (to the extent not already exercised) at
any time within 14 days after the date on which the offer becomes or is declared
unconditional.
(p) Rights on winding-up
In the event a notice is given by the Company to its members to convene a general
meeting for the purposes of considering, and if thought fit, approving a resolution to
voluntarily wind-up the Company, the Company shall forthwith give notice thereof to all
grantees and thereupon, each grantee (or his/her legal personal representative(s)) shall be
entitled to exercise all or any of his or her options (to the extent not already exercised) at
any time not later than two business days prior to the proposed general meeting of the
Company referred to above by giving notice in writing to the Company, accompanied by a
remittance or payment for the full amount of the aggregate exercise price for the Shares in
respect of which the notice is given, whereupon the Company shall as soon as possible
and, in any event, no later than the business day immediately prior to the date of the
proposed general meeting, allot the relevant Shares to the grantee credited as fully paid
and register the grantee as holder thereof.
(q) Rights on compromise or arrangement between the Company and its members
or creditors
If a compromise or arrangement between the Company and its members or creditors
is proposed for the purposes of a scheme for the reconstruction of the Company or its
amalgamation with any other companies pursuant to the Cayman Islands Companies Act,
the Company shall give notice to all the grantees of the options on the same day as it
gives notice of the meeting to its members and/or creditors summoning the meeting to
consider such a compromise or arrangement and any grantee may by notice in writing to
the Company accompanied by a remittance or payment for the full amount of the aggregate
subscription price for the Shares in respect of which the notice is given (such notice to be
received by the Company not later than two business days prior to the proposed meeting),
exercise the option to its full extent or to the extent specified in the notice and the
Company shall as soon as possible and in any event no later than the business day
immediately prior to the date of the proposed meeting, allot and issue such number of
Shares to the grantee which falls to be issued on such exercise of the option credited as
fully paid and register the grantee as holder thereof.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 586 ---
With effect from the date of such meeting, the rights of all grantees to exercise their
respective options shall forthwith be suspended. Upon such compromise or arrangement
becoming effective, all options shall, to the extent that they have not been exercised, lapse
and determine. If for any reason such compromise or arrangement does not become
effective and is terminated or lapses, the rights of grantees to exercise their respective
options shall with effect from such termination be restored in full but only upon the extent
not already exercised and shall become exercisable as if such compromise or arrangement
had not been proposed by the Company.
(r) Ranking of Shares
The Shares to be allotted and issued upon the exercise of an option will not carry
voting, dividend or other rights until completion of the registration of the grantee as the
holder thereof. Subject to the aforesaid, Shares to be allotted and issued on the exercise of
options shall be subject to the provisions of the Articles of Association and shall carry the
same rights in all respects and shall have the same voting, dividend, transfer and other
rights, including those arising on liquidatio n as attached to the other fully-paid Shares in
issue on the date of issue and rights in respect of any dividend or other distributions paid
or made on or after the date of issue.
(s) Effect of alterations to capital
In the event of any alteration in the capital structure of the Company whilst any option
may become or remains exercisable, whether by way of capitalisation issue, rights issue,
consolidation, sub-division or reducti on of share capital of the Company, such
corresponding alterations (if any) shall be made in the number of Shares subject to any
options so far as unexercised, exercise price per Share of each outstanding option and/or
the maximum numbers of Shares in respect of which Options may be granted. The auditors
of the Company or an independent financial adviser shall confirm in writing to the Board
that such adjustment satisfies the requirements of Rule 17.03(13) of the Listing Rules and
the note thereto and any applicable guidance and/or interpretation of the Listing Rules from
time to time, except where such adjustment is made on a capitalization issue. The capacity
of the auditors of the Company or the approval independent financial adviser, as the case
may be, in this paragraph is that of experts and not arbitrations and their certificate shall, in
absence of manifest error, be final and conclusive and binding on the Company and the
grantees.
Any such adjustments shall be made on the basis that a grantee shall have the same
proportion of the issued share capital of the Company as that to which he was entitled
before such adjustment and the aggregate exercise price payable on full exercise of any
option is to remain as nearly as possible the same (and in any event not greater than) as it
was before such event. No such alteration will be made the effect of which would be to
enable a Share to be issued at less than its nominal value. The issue of Shares as
consideration in a transaction is not to be regarded as a circumstance requiring any such
adjustment.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 587 ---
(t) Lapse of option
An option shall lapse automatically and not be exercisable (to the extent not already
exercised) on the earliest of:
(i) the date of expiry of the option as may be determined by the Board;
(ii) the expiry of any of the periods referred to in paragraphs (l), (m), (n), (o) or (p);
( i i i ) t h ed a t eo nw h i c ht h es c h e m eo fa r r a n g e m e n to ft h eC o m p a n yr e f e r r e dt oi n
paragraph (q) becomes effective;
(iv) subject to paragraph (p), the date of commencement of the winding-up of the
Company;
( v ) t h ed a t eo nw h i c ht h eg r a n t e ec e a s e st ob ea nE l i g i b l eP a r t i c i p a n tb yr e a s o no f
such grantee ’s resignation from the employment of the Company or any of its
subsidiaries or the termination of his/her employment or contract on any one or
more of the grounds that he/she has been guilty of serious misconduct, or has
been convicted of any criminal offence involving his/her integrity or honesty, or in
relation to an employee of the Group (if so determined by the Board), or has
been insolvent, bankrupt or has made compositions with his/her creditors
generally or any other ground on which an employee would be entitled to
terminate his/her employment at common law or pursuant to any applicable laws
or under the grantee ’s service contract with the Gro up. A resolution of the Board
to the effect that the employment of a grantee has or has not been terminated on
one or more of the grounds specified in this paragraph shall be conclusive; or
(vi) the date on which the Board shall exercise the Company ’s right to cancel the
option at any time after the grantee commits a breach of paragraph (i) above or
the options are canceled in accordance with paragraph (v) below.
(u) Alteration of the Share Option Scheme
The Share Option Scheme may be altered in any respect by resolution of the Board or
administrator of the Share Option Scheme except that:
(i) any alterations to the terms and conditions of the Share Option Scheme which
are of a material nature or any change to the terms of options granted, except
where the alterations take effect automatically under the existing terms of the
S h a r eO p t i o nS c h e m e ;
(ii) any alterations to the advantage of the Eligible Participants or the grantee (as
the case maybe) relating to matters set out in rule 17.03 of the Listing Rules; and
(iii) any change to the authority of the Directors or administrator of the Share Option
Scheme in relation to any alteration to the terms of the Share Option,
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 38


--- page 588 ---
shall first be approved by the Shareholders in general meeting provided that if the
proposed alteration shall adversely affect any option granted or agreed to be granted prior
to the date of alteration, such alteration shall be further subject to the grantees ’ approval.
The amended terms of the Share Option Scheme or the options granted shall still comply
with Chapter 17 of the Listing Rules.
(v) Cancellation of options
Any cancellation of options granted but not exercised must be approved by the
grantees of the relevant options in writing. For the avoidance of doubt, such approval is not
required in the event any option is canceled pursuant to paragraph (i).
(w) Termination of the Share Option Scheme
The Company may by resolution in general meeting or the Board at any time
terminate the Share Option Scheme and in such event no further option shall be offered or
granted but the provisions of the Share Option Scheme shall remain in force to the extent
necessary to give effect to the exercise of any option granted prior thereto or otherwise as
may be required in accordance with the provisions of the Share Option Scheme. Options
granted prior to such termination but not yet exercised at the time of termination shall
continue to be valid and exercisable in accordance with the terms of the grant and the
S h a r eO p t i o nS c h e m eo rb ec a n c e l e di na c c o r d a n c ew i t hp a r a g r a p h( v ) .
(x) Administration of the Board
The Share Option Scheme shall be subject to the administration of the Board whose
decision as to all matters arising from or in relation to the Share Option Scheme or its
interpretation or effect (save as otherwise provided herein and in the absence of manifest
error) shall be final and binding on all parties.
(y) Conditions of the Share Option Scheme
The Share Option Scheme shall take effect subject to and is conditional upon:
(i) the passing of the necessary resolutions by the Shareholders to approve and
adopt the rules of the Share Option Scheme;
(ii) the Stock Exchange granting the approval for the listing of and permission to
deal in, the Shares which may fall to be issued pursuant to the exercise of
options to be granted under the Share Option Scheme;
(iii) the obligations of the Underwriters under the Underwriting Agreements becoming
unconditional (including, if relevant , as a result of the waiver(s) of any such
condition(s) by the Sole Overall Coordinator (on behalf of the Underwriters)) and
not being terminated in accordance with the terms of the Underwriting
Agreements or otherwise;
(iv) the commencement of dealings in the Shares on the Stock Exchange.
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 39


--- page 589 ---
If the conditions in paragraph (y) above are not satisfied within six calendar months
from the adoption date:
(i) the Share Option Scheme shall forthwith determine;
(ii) any option granted or agreed to be granted pursuant to the Share Option
Scheme and any offer of such a grant shall be of no effect; and
(iii) no person shall be entitled to any rights or benefits or be under any obligations
under or in respect of the Share Option Scheme or any option granted
thereunder.
(z) Disclosure in annual and interim reports
The Company will disclose details of the Share Option Scheme in its annual and
interim reports including the number of options, date of grant, exercise price, exercise
period and vesting period during the finan cial year in the annual/interim reports in
accordance with the Listing Ru les in force from time to time.
(aa) Present status of the Share Option Scheme
A so ft h eL a t e s tP r a c t i c a b l eD a t e ,n oo p t i o nh a db e e ng r a n t e do ra g r e e dt ob eg r a n t e d
under the Share Option Scheme.
Application has been made to the Stock Exchange for the granting of the approval for
the listing of and permission to deal in the Shares which may fall to be issued pursuant to
the exercise of the options to be granted under the Share Option Scheme, being
64,000,000 Shares in total.
E. OTHER INFORMATION
1. Tax and other indemnities
The Controlling Shareholders have entered into the Deed of Indemnity with and in
favor of the Company (for itself and as trustee for each of its subsidiaries) to provide
indemnities on a joint and several basis in resp ect of, among other matters, (i) any liability
for estate duty under the Estate Duty Ordi nance (Chapter 111 of the Laws of Hong Kong),
or legislation similar thereto in Hong Kong or any jurisdictions outside Hong Kong which
might be incurred by any member of the Group on or before the Listing Date; and (ii) any
additional tax demand, late charges or penalties incurred after the Listing Date arising from
any unreported tax, outstanding tax payment and any other tax liabilities resulting from any
breach of applicable laws or regulations in the relevant jurisdiction by any member of the
Group on or before the Listing Date.
2. Litigation
As of the Latest Practicable Date, no member of the Group was engaged in any
litigation or arbitration of material importance and, so far as the Directors are aware, no
litigation or claim of material importanc e is pending or threatened by or against any
member of the Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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3. Sole Sponsor
The Sole Sponsor satisfies the independence criteria applicable to sponsor set out in
Rule 3A.07 of the Listing Rules. The Sole Sponsor will receive an aggregate fee of HK$6.0
million for acting as the sponsor for the Listing.
The Sole Sponsor has made an application on the Company ’s behalf to the Stock
Exchange for the granting of the approval for the listing of, and permission to deal in, all
the Shares in issue and to be issued as mentioned in this prospectus (including any
Shares which may be issued pursuant to the exercise of the Over-allotment Option and any
options which may be granted under the Share Option Scheme). All necessary
arrangements have been made for the Shares to be admitted into CCASS.
4. Preliminary expenses
The preliminary expenses incurred and paid by the Company relating to the
incorporation of the Company were approximately HK$26,000.
5. No material adverse change
Saved as disclosed in the sections headed ‘‘Summary ’’ and ‘‘Financial Information ’’ in
this prospectus, the Directors confirm that there has been no material adverse change in
the Group ’s financial or trading position since 31 December 2023 (being the date on which
the latest audited consolidated financial statements of the Group was prepared).
6. Promoter
The Company has no promoter. Within the two years immediately preceding the date
of this prospectus, no cash, securities or other benefit has been paid, allotted or given nor
are any proposed to be paid, allotted or given to any promoters in connection with the
Global Offering and the related transactions described in this prospectus.
7. Taxation of holders of Shares
(a) Hong Kong
The sale, purchase and transfer of Shares registered with the Company ’sH o n g
Kong branch register of members will be subject to Hong Kong stamp duty, the current
rate charged on each of the purchaser and seller is 0.1% of the consideration or, if
higher, the fair value of the Shares being sold or transferred. Profits from dealings in
the Shares arising in or derived from Hong Kong may also be subject to Hong Kong
profits tax.
(b) Cayman Islands
Under the present Cayman Islands law, there is no stamp duty payable in the
Cayman Islands on transfer of Shares provided that the relevant instrument of transfer
and transfer documents are executed and remain(s) outside the Cayman Islands.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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(c) Consultation with professional advisers
Intending holders of the Shares are recommended to consult their professional
advisers if they are in doubt as to the taxation implications of holding or disposing of
or dealing in the Shares. It is emphasised that none of the Company, the Directors or
the other parties involved in the Global Offering will accept responsibility for any tax
effect on, or liabilities of, holders of Share s resulting from their holding or disposal of
o rd e a l i n gi nS h a r e so re x e r c i s eo fa n yr i g h t sa t t a c h i n gt ot h e m .
8. Qualifications and consents of experts
The following are the qualifications of the experts who have given opinions or advice
w h i c ha r ec o n t a i n e di nt h i sp r o s p e c t u s :
Name Qualifications
Zhongtai International
C a p i t a lL i m i t e d...........
Licensed corporation to conduct Type 1 (dealing in
securities) and Type 6 (advising on corporate
finance) regulated activities as defined under the
SFO
K P M G ................... C e r t i f i e dP u b l i cA c c o u n t a n t s
Public Interest Entity Auditor registered in
accordance with the Accounting and Financial
Reporting Council Ordinance
O g i e r .................... L e g a l a d v i s e r s t o t h e C o m p a n y a s t o C a y m a n
Islands laws
JunZeJun Law Offices . . . . . . . Legal advisers to the Company as to the PRC
laws
HG Appraisal & Consulting
L i m i t e d .................
Property valuer
I p s o sA s i aL i m i t e d.......... I n d u s t r yc o n s u l t a n t
Each of the experts named above has given and has not withdrawn its written consent
to the issue of this prospectus with the inclusi on of its reports, letters, opinions, summaries
of opinions and/or references to its names included herein in the form and context in which
they respectively appear.
9. Interests of experts in the Company
None of the persons named in ‘‘8. Qualifications and consents of experts ’’ above is
interested beneficially or otherwise in any Shares or shares of any member of the Group or
has any right or option (whether legally enforceable or not) to subscribe for or nominate
persons to subscribe for any shares or securities in any member of the Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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10. Binding effect
This prospectus shall have the effect, in an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal
provisions) of sections 44A and 44B of the C ompanies (Winding Up and Miscellaneous
Provisions) Ordinance so far as applicable.
11. Miscellaneous
(a) Within the two years immediately preceding the date of this prospectus:
(i) save as disclosed in ‘‘History and Reorganisation ’’ in this prospectus, no
share or loan capital of the Company or any of its subsidiaries has been
issued or agreed to be issued fully or partly paid either for cash or for a
consideration other than cash;
(ii) no share or loan capital of the Company or any of its subsidiaries is under
option or is agreed conditionally or unconditionally to be put under option;
(iii) no commissions, discounts, broker ages or other special terms have been
granted in connection with the issue or sale of any capital of the Company
or any of its subsidiaries; and
(iv) no commission has been paid or payable subscribing, agreeing to subscribe
or procuring subscription or agreeing to procure subscription for any shares
in the Company or any of its subsidiaries;
(b) no founder, management or deferred Shares nor any debenture in the Company
or any of its subsidiaries have been issued or agreed to be issued;
(c) there has not been any interruption in the business of the Group which may have
or has had a significant effect on the financial position of the Group in the 12
months preceding the date of this prospectus;
(d) the principal register of members of the Company will be maintained in the
Cayman Islands by Ogier Global (Cayman) Limited and a branch register of
members of the Company will be maintained in Hong Kong by Tricor Investor
Services Limited. Unless the Directors otherwise agree, all transfer and other
documents of title of Shares must be lodged for registration with and registered
by the Company ’s share register in Hong Kong and may not be lodged in the
Cayman Islands. All necessary arrangements have been made to enable the
Shares to be admitted to CCASS;
(e) no company within the Group is presently listed on any stock exchange or traded
on any trading system nor is any listing or permission to deal being or proposed
to be sought;
(f) the Directors have been advised that under Cayman Islands Companies Act the
use of a Chinese name by the Company does not contravene the Cayman
Islands Companies Act;
APPENDIX V STATUTORY AND GENERAL INFORMATION
V – 43


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(g) there is no arrangement under which future dividends are waived or agreed to be
waived;
(h) the Company has no outstanding convertible debt securities or debentures; and
(i) there is no restriction affecting the remittance of profits or repatriation of capital
into Hong Kong and from outside Hong Kong.
12. Bilingual prospectus
The English language and Chinese language versions of this prospectus are being
published separately in reliance upon th e 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). In case of any discrepancies between the
English language version and Chinese language version of this prospectus, the English
language version shall prevail.
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A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were (a) the written consents referred to in ‘‘Statutory
and General Information – E. Other Information – 8. Qualifications and consents of experts ’’ in
Appendix V to this prospectus; and (b) a copy of each of the material contracts referred to in
‘‘Statutory and General Information – B. Further Information about the Group ’s Business – I.
Summary of material contracts ’’in Appendix V to this prospectus.
B. DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the Stock Exchange ’s
website at www.hkexnews.hk and the Company ’sw e b s i t ea t www.gantongjt.com up to and
including the date which is 14 days from the date of this prospectus:
(a) the Memorandum of Association and the Articles of Association;
(b) the Accountants ’ Report of the Group from KPMG, the text of which is set out in
Appendix I to this prospectus;
(c) the report in respect of the unaudited pro forma financial information of the Group
from KPMG, the text of which is set out in Appendix II to this prospectus;
(d) the audited consolidated financial statements of the Group for the years ended 31
December 2021, 2022 and 2023;
(e) the legal opinion dated the prospectus date issued by JunZeJun Law Offices, the
Company ’s legal advisers as to PRC laws, in respect of certain aspects, general
corporate matters and property interests of the Group;
(f) the letter of advice dated the prospectus date issued by Ogier, the Company ’s legal
advisers as to Cayman Islands law, summarising certain aspects of Cayman Islands
company law referred to in Appendix IV to this prospectus;
(g) the Cayman Islands Companies Act;
(h) the rules of the Share Option Scheme;
(i) the material contracts referred to in ‘‘Statutory and General Information – B. Further
Information about the Group ’s Business – 1. Summary of material contracts ’’ in
Appendix V to this prospectus;
(j) the service agreements and letters of appointment entered into between the Company
and each of the Directors (as applicable) referred to in ‘‘Statutory and General
Information – C. Further Information about the Directors and Substantial Shareholders
– I. Directors ’’in Appendix V to this prospectus;
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
VI – 1


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(k) the written consents referred to in ‘‘Statutory and General Information – E. Other
Information – 8. Qualifications and consents of experts ’’ in Appendix V to this
prospectus;
(l) the report issued by Ipsos, the summary of which is set forth in the section headed
‘‘Industry Overview ’’in this prospectus; and
(m) the property valuation report issued by HG Appraisal & Consulting Limited, the text of
which is set out in Appendix III to this prospectus.
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
VI – 2


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