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XIAMEN JIHONG CO., LTD
ʮ̡
Stock Code: 2603
(a joint stock company incorporated in the People’s Republic of China with limited liability)
Joint Sponsors, Sponsor-Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL
OFFERING
	JOBMQIBCFUJDBMPSEFS
 XIAMEN JIHONG CO., LTD


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IMPORTANT: If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.
Xiamen Jihong Co., Ltd
ʮ̡
(a joint stock company incorporated in the People’s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the Global Offering : 67,910,000 H Shares
Number of Hong Kong Offer Shares : 6,791,000 H Shares (subject to reallocation)
Number of International Offer Shares : 61,119,000 H Shares (subject to reallocation)
Maximum Offer Price : HK$10.68 per H Share (plus brokerage of 1%, SFC
transaction levy of 0.0027%, AFRC transaction
levy of 0.00015% and the Stock Exchange
trading fee of 0.00565%, payable in full in Hong
Kong dollars on application and subject to
refund)
Nominal value : RMB1.00 per H Share
Stock code : 2603
Joint Sponsors, Sponsor-Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the
contents of this Prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss h owsoever arising from or
in reliance upon the whole or any part of the contents of this Prospectus. A copy of this Prospectus, having attached thereto the documents specified in “Appendix VII –
Documents Delivered to the Registrar of Companies and Available on Display” 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 Registrar
of Companies in Hong Kong take no responsibility for the contents of this Prospectus or any other documents referred to above.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and o ur Company on
the Price Determination Date or such later date as may be agreed by the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters ) and our
Company but in any event no later than 12:00 noon on Friday, May 23, 2025. The Offer Price will be not more than HK$10.68 per H Share and is currently expect ed to be not
less than HK$7.48 per H Share. Applicants for Hong Kong Offer Shares are required to pay, on application, the Maximum Offer Price of HK$10.68 per H Share together with
brokerage of 1%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and the Stock Exchange trading fee of 0.00565%, subject to refund i f the Offer Price
should be less than HK$10.68 per H Share. If, for any reason, the Offer Price is not agreed between the Overall Coordinators (for itself and on behalf of t he Hong Kong
Underwriters) and our Company on or before 12:00 noon on Friday, May 23, 2025, the Global Offering (including the Hong Kong Public Offering) will not pr oceed and will
lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares being offered und er the Global
Offering and/or the indicative Offer Price range below as stated in this Prospectus at any time on or prior to the morning of the last day for lodging appl ications under the
Hong Kong Public Offering. In such a case, an announcement will be published on the websites of our Company at www.jihong.cn and the Stock Exchange at
www.hkexnews.hk not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. Details of the arrangement will
then be announced by us as soon as practicable. For further information, please refer to the sections headed “Structure of the Global Offering” and “Ho w to Apply for the
Hong Kong 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 risks as set out in the
section headed "Risk Factors".
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date. Further details of such circums tances are
set out in “Underwriting – Underwriting Arrangements and Expenses – Hong Kong Public Offering – Grounds for Termination”.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be of fered, sold, pledged
or transferred within the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S), except pursuant to an exemptio n from, or in a
transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. The Offer Shares are being offered and sold to
non-U.S. persons outside the United States in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this Prospectus to the p ublic in relation
to the Hong Kong Public Offering.
This Prospectus is available at the websites of our Company at www.jihong.cn and the Stock Exchange at www.hkexnews.hk . If you require a printed copy of this
Prospectus, you may download and print from the website addresses above.
IMPORTANT
May 19, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering.
We will not provide printed copies of this Prospectus in relation to the Hong Kong Public
Offering.
This Prospectus is available at the website of the Stock Exchange at www.hkexnews.hk under
the “ HKEXnews > New Listings > New Listing Information ” section, and our website at
www.jihong.cn . Y ou may download and print from these website addresses if you want a printed
copy of this Prospectus.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC Nominees to
apply on your behalf by instructing your broker or custodian who is a HKSCC Participant
to give electronic application instructions via HKSCC’s FINI system to apply for the
Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong Offer
Shares by the public. The contents of the electronic version of this Prospectus are identical to the
printed prospectus as registered with the Registrar of Companies in Hong Kong pursuant to Section
342C of the Companies (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 stated
above.
Please refer to the section headed “How to Apply for the Hong Kong Offer Shares” in this
Prospectus for further details on the procedures through which you can apply for the Hong Kong
Offer Shares electronically.
IMPORTANT


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Y our application through the White Form eIPO service or the HKSCC EIPO channel must be
made for a minimum of 500 Hong Kong Offer Shares and in multiples of that number of Hong Kong
Offer Shares as set out in the table below. No application for any other number of Hong Kong Offer
Shares will be considered and such an application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the table below for
the amount payable for the number of Shares you have selected. Y ou must pay the respective amount
payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,393.85 7,000 75,513.95 50,000 539,385.39 700,000 7,551,395.45
1,000 10,787.71 8,000 86,301.67 60,000 647,262.47 800,000 8,630,166.25
1,500 16,181.56 9,000 97,089.37 70,000 755,139.55 900,000 9,708,937.02
2,000 21,575.42 10,000 107,877.07 80,000 863,016.62 1,000,000 10,787,707.80
2,500 26,969.27 15,000 161,815.62 90,000 970,893.70 1,500,000 16,181,561.70
3,000 32,363.13 20,000 215,754.16 100,000 1,078,770.78 2,000,000 21,575,415.60
3,500 37,756.98 25,000 269,692.70 200,000 2,157,541.55 2,500,000 26,969,269.50
4,000 43,150.82 30,000 323,631.23 300,000 3,236,312.35 3,000,000 32,363,123.40
4,500 48,544.69 35,000 377,569.77 400,000 4,315,083.12 3,395,500
(1) 36,629,661.84
5,000 53,938.54 40,000 431,508.31 500,000 5,393,853.90
6,000 64,726.25 45,000 485,446.85 600,000 6,472,624.68
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in
the Listing Rules) and 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, collected by the Stock Exchange on behalf of the
SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
IMPORTANT


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If there is any change in the following expected timetable of the Hong Kong Public Offering,
our Company will issue an announcement to be published on the website of the Stock Exchange at
http://www.hkexnews.hk and the website of our Company www.jihong.cn .
Date (1)
Hong Kong Public Offering commences ..................................... 9:00 a.m. on
Monday, May 19, 2025
Latest time to complete electronic applications under
White Form eIPO service through the designated website
at www.eipo.com.hk (2)
............................................... 11:30 a.m. on
Thursday, May 22, 2025
Application lists of the Hong Kong Public Offering open (3) ...................... 11:45 a.m. on
Thursday, May 22, 2025
Latest time to (a) complete payment of White Form eIPO
applications by effecting internet banking transfer(s) or PPS
payment transfer(s) and (b) give electronic application
instructions to HKSCC
(4) ............................................ 12:00 noon on
Thursday, May 22, 2025
If you are instructing your broker or custodian who is a HKSCC Participant will submit an EIPO
application on your behalf through HKSCC’s FINI system in accordance with your instruction, you are
advised to contact your broker or custodian for the earliest and latest time for giving such instructions,
as this may vary by broker or custodian .
Application lists of the Hong Kong Public Offering close
(3) ..................... 12:00 noon on
Thursday, May 22, 2025
Expected Price Determination Date (5) ..................................... 12:00 noon on
Friday, May 23, 2025
Announcement of the Final Offer Price, the results of applications in
the Hong Kong Public Offering, the level of indications of interest
in the International Offering and the basis of allocation of the Hong
Kong Offer Shares under the Hong Kong Public Offering to be
published on the website of the Stock Exchange at
www.hkexnews.hk and the website of our Company at
www.jihong.cn (6) ..........................................a to r before 11:00 p.m. on
Monday, May 26, 2025
EXPECTED TIMETABLE
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Results of allocations in the Hong Kong Public Offering (with successful applicants’ identification
document numbers, where appropriate) to be available through a variety of channels, including:
(1) A full announcement of the Hong Kong Public Offering to
be published on the website of the Stock Exchange at
www.hkexnews.hk and the website of our Company at
www.jihong.cn (6) ...................................a to r before 11:00 p.m. on
Monday, May 26, 2025
(2) Results of allocations in the Hong Kong Public Offering
will be available at www.iporesults.com.hk (alternatively,
www.eipo.com.hk/eIPOAllotment ) with a “search by ID”
function on a 24-hour basis from ................................. 11:00 p.m. on
Monday, May 26, 2025
to 12:00 midnight on
Sunday, June 1, 2025
(3) Allocation results telephone enquiry by
calling +852 2862 8555 .......................... between 9:00 a.m. and 6:00 p.m.
from Tuesday, May 27, 2025
to Friday, May 30, 2025
Deposit of H Share certificates into CCASS in respect of wholly or
partially successful application under the Hong Kong Public
Offering on
(7)(9) ............................................. Monday, May 26, 2025
Dispatch of H Share certificates in respect of wholly or partially
successful applications pursuant to the Hong Kong Public Offering
on or before
(7)(9) ............................................. Monday, May 26, 2025
Dispatch/collection of refund cheques and White Form e-Refund
payment instructions in respect of (i) wholly or partially successful
applications (if applicable) and (ii) wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering on or
before
(8)(9) .................................................T uesday, May 27, 2025
Dealings in H Shares on the Stock Exchange expected to commence at ............... 9:00 a.m. on
Tuesday, May 27, 2025
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) Y ou will not be permitted to submit your application to the White Form eIPO Service Provider through the designated
website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted
your application and obtained an application reference number from the designated website on or before 11:30 a.m., you
will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon on
the last day for submitting applications, when the application lists close.
(3) If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme Conditions
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, May 22, 2025, the application lists will
not open or close on that day. See “How to Apply for the Hong Kong Offer Shares – E. Severe Weather Arrangements” in
this Prospectus.
EXPECTED TIMETABLE
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(4) Applicants who instructing your broker or custodian to apply for Hong Kong Offer Shares on your behalf via FINI should
see “How to Apply for the Hong Kong Offer Shares – A. Application for Hong Kong Offer Shares – 2. Application
Channels” in this Prospectus.
(5) The Price Determination Date is expected to be on or before Friday, May 23, 2025. If, for any reason, the Offer Price is not
agreed between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company by 12:00
noon on Friday, May 23, 2025, the Global Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this Prospectus.
(7) H Share certificates for the Offer Shares will become valid evidence of title at 8:00 a.m. on Tuesday, May 27, 2025
provided that (i) the Global Offering has become unconditional in all respects and (ii) none of the Underwriting
Agreements have been terminated in accordance with its terms.
(8) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially successful applications
in the event that the final Offer Price is less than the price payable per Offer Share on application. Part of the applicant’s
Hong Kong identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may be printed
on the refund cheque, if any. Such data would also be transferred to a third party for refund purposes. Banks may require
verification of an applicant’s Hong Kong identity card number or passport number before encashment of the refund
cheque. Inaccurate completion of an applicant’s Hong Kong identity card number or passport number may invalidate or
delay encashment of the refund cheque.
(9) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the section
headed “How to Apply for the Hong Kong Offer Shares – D. Despatch/Collection of Share Certificates and Refund of
Application Monies” in this Prospectus.
For applicants who, apply through the White Form eIPO service and paid the application monies from a single bank
account, White Form e-Refund payment instructions (if any) will be dispatched to their application payment bank account
in the form of White Form e-Refund payment instructions on Tuesday, May 27, 2025. For applicants who apply through
the White Form eIPO service and used multi-bank accounts to pay the application monies, refund cheque (if any) will be
dispatched to the address specified in their electronic application instructions in the form of refund checks by ordinary
post on or before Tuesday, May 27, 2025 at their own risk.
Further information is set out in the sections headed “How to Apply for the Hong Kong Offer Shares – D.
Despatch/Collection of Share Certificates and Refund of Application Monies” in this Prospectus.
The above expected timetable is a summary only. See the sections headed “Structure of the Global
Offering” and “How to Apply for the Hong Kong Offer Shares” in this Prospectus for details of the
structure and conditions of the Global Offering, as well as the application procedures for Hong Kong
Public Offering.
EXPECTED TIMETABLE
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This Prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the Hong Kong Offer Shares offered by this Prospectus
pursuant to the Hong Kong Public Offering. This Prospectus may not be used for the purpose of
marketing, and does not constitute, an offer or invitation in any other jurisdiction or in any other
circumstances. No action has been taken to permit a public offering of the Offer Shares in any
jurisdiction other than Hong Kong and no action has been taken to permit the distribution of this
Prospectus in any jurisdiction other than Hong Kong. The distribution of this Prospectus and the
offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not be
made except as permitted under the applicable securities laws of such jurisdictions pursuant to
registration with or authorization by the relevant securities regulatory authorities or an exemption
therefrom.
You should rely only on the information contained in this Prospectus to make your investment
decision. We have not authorized anyone to provide you with information that is different from what
is contained in this Prospectus. Any information or representation not made in this Prospectus must
not be relied on by you as having been authorized by us, the Joint Sponsors, Sponsor-Overall
Coordinators, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners, Joint Lead
Managers, the Capital Market Intermediaries, 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 ............................................................ 3 0
Glossary of Technical Terms ............................................... 4 3
Forward-looking Statements ............................................... 4 6
Risk Factors ........................................................... 4 8
Waivers from Strict Compliance with the Listing Rules .......................... 8 9
Information about this Prospectus and the Global Offering ....................... 9 4
Directors, Supervisors and Parties Involved in the Global Offering ................. 9 9
Corporate Information ................................................... 1 1 1
Industry Overview ...................................................... 1 1 3
Regulatory Overview .................................................... 1 3 6
History and Corporate Structure ........................................... 1 7 0
CONTENTS
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Page
Business .............................................................. 1 8 6
Relationship with Our Single Largest Group of Shareholders ...................... 2 9 1
Cornerstone Investors .................................................... 2 9 6
Directors, Supervisors and Senior Management ................................ 3 0 3
Substantial Shareholders ................................................. 3 2 0
Share Capital .......................................................... 3 2 4
Financial Information .................................................... 3 2 7
Future Plans and Use of Proceeds ........................................... 4 0 1
Underwriting .......................................................... 4 0 7
Structure of the Global Offering ............................................ 4 1 8
How to Apply for the Hong Kong Offer Shares ................................. 4 2 6
Appendix IA – Accountants’ Report ..................................... IA-1
Appendix IB – Unaudited Interim Financial Information ..................... I B - 1
Appendix II – Unaudited Pro Forma Financial Information .................. II-1
Appendix III – Taxation and Foreign Exchange ............................ III-1
Appendix IV – Summary of Principal PRC and Hong Kong SAR Legal and
Regulatory Provisions .................................. I V - 1
Appendix V – Summary of the Articles of Association of the Company .......... V - 1
Appendix VI – Statutory and General Information ......................... VI-1
Appendix VII – Documents Delivered to the Registrar of Companies
and A vailable on Display ................................ VII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this Prospectus and
should be read in conjunction with the full text of this Prospectus. As this is only a summary, it does
not contain all the information that may be important to you. You should read this Prospectus in its
entirety before you decide to invest in the Offer Shares. There are risks associated with any
investment. Some of the particular risks in investing in the Offer Shares are set out in “Risk
Factors”. You should read that section carefully before you decide to invest in the Offer Shares.
V arious expressions used in this section are defined or explained in “Definitions” and “Glossary of
Technical Terms” in this Prospectus.
OVERVIEW
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. Founded in 2003, we set out on providing one-stop paper packaging products and
services to FMCG enterprise customers, focusing on providing marketing strategies, product design,
process design, technology planning, transportation and logistics. As the core of our paper packaging
business is essentially grounded in product design and marketing that ultimately center around
addressing end consumers’ needs and spur their purchase desires, we have accumulated deep
understanding and experience in both product marketing and discerning consumer demands. Seeking to
expand our business beyond our decades-long paper packaging business, we seized the business
opportunities from the burgeoning of cross-border e-commerce driven by the development of the mobile
Internet by building our cross-border social e-commerce business in 2017, which has become our major
source of revenue.
After our listing on the SZSE in 2016, supported by the leadership and industry experience of our
management team, we successfully transformed and diversified our business while attaining
achievements from both business and financial perspectives. As a leading cross-border social
e-commerce company strategically focusing on the Asian market, we ranked second among China’s B2C
outbound e-commerce players based on revenue generated through social media e-commerce business in
Asia in 2024, with a market share of 1.3%, according to CIC. Furthermore, we are a leading FMCG
paper packaging company in Mainland China, and ranked first among FMCG paper consumer packaging
companies in Mainland China based on revenue in 2024, with a market share of 1.2%, according to CIC.
For each year of the Track Record Period, our total revenue amounted to RMB5,375.9 million,
RMB6,694.7 million and RMB5,529.3 million, respectively. For each year of the Track Record Period,
our profit amounted to RMB171.6 million, RMB332.1 million and RMB184.5 million, respectively.
SUMMARY
–1–


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The following table sets forth a breakdown of revenue by business segments for the periods
indicated:
For the year ended December 31,
2022 2023 2024
Revenue % Revenue % Revenue %
RMB’000 RMB’000 RMB’000
Cross-border social
e-commerce 3,106,601 57.8 4,256,637 63.6 3,365,903 60.9
Paper packaging 1,982,591 36.9 2,096,606 31.3 2,099,461 38.0
Others
(1) 286,692 5.3 341,438 5.1 63,895 1.1
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Note:
(1) Others mainly comprise our marketing and advertising business and incidental trading business. For further details,
see “Business – Our Other Businesses”.
Our Cross-Border Social E-Commerce Business
Empowered by data insights and technology and capitalizing on a new era of cross-border
e-commerce through the mobile Internet, we adopt a social e-commerce business model that discovers
target customers actively and precisely. Under this model, we deploy our dynamic data analytical
capabilities to perform precise product discovery and recommendation, place targeted advertisements
online to attract consumers from social media traffic to our landing pages, which are transactional web
pages that pop up in response to a user’s click on a link or advertisement displayed on a social media
platform, and ultimately market and sell affordable and high-quality products from Mainland China to
overseas consumers around the world. We primarily place advertisements on social media platforms to
attract customers, without operating our own platform or mobile apps. We provide a wide array of
products, including household products, apparel products, electronic products, footwear products,
luggage and bag products, cosmetic and personal care products, healthcare products, maternity and baby
products, and watches and accessories. For each year of the Track Record Period, revenue generated
from sales of (i) household products was RMB834.0 million, RMB1,111.4 million and RMB932.0
million, representing 26.8%, 26.1% and 27.7% of our total revenue of cross-border social e-commerce
business, respectively; (ii) electronic products was RMB381.7 million, RMB766.3 million and
RMB790.5 million, representing 12.3%, 18.0% and 23.5% of our total revenue of cross-border social
e-commerce business, respectively; (iii) apparel products was RMB549.2 million, RMB1,033.1 million
and RMB615.3 million, representing 17.7%, 24.3% and 18.3% of our total revenue of cross-border
social e-commerce business, respectively; and (iv) cosmetic and personal care products was RMB356.7
million, RMB334.9 million, and RMB328.2million, representing 11.5%, 7.9% and 9.8% of our total
revenue of cross-border social e-commerce business, respectively.
SUMMARY
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We also sell products ranging from electric bikes, lingerie, UV umbrellas and pet accessories
under our own brands including SENADA BIKES, V eimia, Konciwa and PETTENA, on our designated
brand websites and e-commerce platforms. For each year of the Track Record Period, revenue generated
from our own brands accounted for less than 4% of our total revenue. Our cross-border social
e-commerce business connects suppliers in Mainland China with consumers across Asia, as well as
Europe and North America. For each year of the Track Record Period, revenue from our cross-border
social e-commerce business accounted for 57.8%, 63.6% and 60.9% of our total revenue, with its gross
profit margin amounting to 59.1%, 63.1% and 60.5%, respectively. The high gross profit margin of our
cross-border social e-commerce business has become the key driver of our gross profit margin, as a
whole, which, for each year of the Track Record Period, reached 40.5%, 46.4% and 43.8%, respectively.
The following table sets forth a breakdown of our revenue generated from our cross-border social
e-commerce business by categories of products for the periods indicated.
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Household products 834,008 26.8% 1,111,352 26.1% 932,038 27.7%
Electronic products 381,699 12.3% 766,283 18.0% 790,468 23.5%
Apparel products 549,151 17.7% 1,033,065 24.3% 615,316 18.3%
Cosmetic and personal care
products 356,667 11.5% 334,930 7.9% 328,192 9.8%
Healthcare products 174,979 5.6% 302,523 7.1% 336,999 10.0%
Footwear products 491,022 15.8% 423,233 9.9% 156,734 4.7%
Luggage and bag products 181,931 5.9% 126,251 3.0% 71,699 2.1%
Watches and accessories 118,708 3.8% 131,623 3.1% 75,627 2.2%
Maternity and baby products 18,436 0.6% 27,377 0.6% 58,830 1.7%
Total 3,106,601 100.0% 4,256,637 100.0% 3,365,903 100.0%
Leveraging AI algorithms and models, we self-developed our Giikin system specifically for our
cross-border social e-commerce business. Through the AI applications integrated into our Giikin
system, we seamlessly connect every stage of our business process with limited human intervention,
from product discovery, advertisement placement, product procurement to transportation and logistics.
During the Track Record Period, we had fulfilled more than 41 million orders for approximately 17.0
million consumers, and had more than 611,000 SKUs. In 2024, our ROI was 191.1%, which was higher
than the industry average, according to CIC. For each year of the Track Record Period, our order
fulfillment rate ranged from 84.9% to 88.4%. We maintain close cooperation with well-known
enterprises to conduct R&D in AI applications in e-commerce. As of March 31, 2025, we owned 4
patents and 140 software copyrights in relation to the development of algorithms, software systems, and
other technology for our cross-border social e-commerce business. We are among the first companies
empowering their business with AI technology in Mainland China, according to CIC. As testament to
our industry recognition, we were awarded Global Pioneer ( Όଢჯঘᆤ ) by TikTok for Business in
2023.
Our cross-border social e-commerce business is equipped with excellent operation and inventory
management capabilities. For each year of the Track Record Period, the inventory to sales ratios of our
cross-border social e-commerce business amounted to 3.7%, 3.2% and 4.0%, respectively, which were
below the industry average, according to CIC.
SUMMARY
–3–


--- page 13 ---
For the year ended December 31,
2022 2023 2024
Countries/regions sold 36 41 47
Number of consumers (1) 6,537,096 7,331,841 6,545,100 (8)
Number of SKUs (2) 265,696 304,494 256,645 (8)
Inventory to sales ratio (3) (%) 3.7 3.2 4.0 (9)
Number of total fulfilled orders (4) 11,654,192 16,404,431 13,834,281 (8)
Order fulfillment rate (5) (%)
(ᖦϗଟ ) 86.3 88.4 84.9 (10)
Average selling price per order (6) (RMB) 266.6 259.5 243.3
ROI(7) (%) 208.3 189.8 191.1
Notes:
(1) Number of consumers represents the number of consumers who placed orders and accepted our products during a
given year, excluding consumers on e-commerce platforms.
(2) SKUs represent stock keeping units of products which have been ordered during a given year.
(3) Inventory to sales ratio is calculated by using the average balance of inventories of our cross-border social
e-commerce business at the beginning and the end of the year divided by revenue of our cross-border social
e-commerce business for such year.
(4) Number of fulfilled orders represents the total number of orders during a given year, which were accepted by
consumers and not returned.
(5) Order fulfillment rate is calculated by dividing the number of fulfilled orders by the number of new orders during a
given year. For the avoidance of doubt, fulfilled orders do not include orders that are canceled or returned after
being placed.
(6) Average selling price per order is calculated by dividing revenue of our cross-border social e-commerce business by
the total number of fulfilled orders during a given year.
(7) ROI represents the return on investment for our advertisement placement for our cross-border social e-commerce
business. It is calculated by dividing revenue for our cross-border social e-commerce business by advertising cost
during a given year. According to CIC, ROI is a common performance metric embraced across the digital advertising
industry and social media e-commerce industry, as the sales of both markets stem directly from the advertising
efforts of market players. The calculation of ROI of social media e-commerce business reflects the efficacy of the
social media advertisements as demonstrated by the conversion rate into sales and thus a higher ROI suggests that a
company garners greater revenue with equivalent advertising expenses.
(8) In 2024, the number of our customers, SKU and total fulfillment orders of our cross-border social e-commerce
business decreased compared with that in 2023, as we reduced advertising expenses in certain key markets in
response to the unpredictability of exchange rate fluctuations. For further details, see “Financial Information –
Review of Historical Results of Operations – Y ear Ended December 31, 2023 Compared to Y ear Ended December 31,
2024.”
(9) In 2024, the inventory to sales ratio of our cross-border social e-commerce business increased compared with that in
2023, which primarily resulted from the decrease in revenue of our cross-border social e-commerce business in
2024. For further details, see “Financial Information – Review of Historical Results of Operations – Y ear Ended
December 31, 2023 Compared to Y ear Ended December 31, 2024.”
(10) In 2024, the order fulfillment rate of our cross-border social e-commerce business decreased compared with that in
2023, as our sales expansion activities in certain under-penetrated market were at early stage in early 2024. For
further details, see “Financial Information – Review of Historical Results of Operations – Y ear Ended December 31,
2023 Compared to Y ear Ended December 31, 2024.”
SUMMARY
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Our Paper Packaging Business
We are among a limited number of FMCG paper packaging companies in Mainland China that
have the capability to provide one-stop paper packaging products and services covering the entire
production process. With process design and technology planning at the crux of our competence, we
integrate marketing strategies, product design, process design, technology planning, transportation and
logistics into our all-inclusive paper packaging products and services, and continuously pre-empt
consumer needs by innovating in materials, designs and products. Exemplifying our commitment to
environmental protection and ESG principles, we prospectively invested in developing environmentally
friendly packaging, following the global prevalence of restrictions on plastic use. Over the years, we
have established and maintained long-term cooperation with leading FMCG companies, laying a solid
foundation for generating stable revenue and cashflows through our paper packaging business.
Leveraging our professional service, our paper packaging business continued to exhibit steady
growth during the Track Record Period. We have established close cooperation with well-known FMCG
enterprises, such as Yili and Luckin Coffee, and a number of QSR (quick-service restaurant) companies
with operations in Mainland China. Our production volume of paper packaging business witnessed a
continuously increasing trend during the Track Record Period, from 846.7 million sq.m. for 2022 to
925.3 million sq.m. for 2023, and further to 1,026.1 million sq.m. for 2024. For each year of the Track
Record Period, we achieved production utilization rates of approximately 63.2%, 55.7% and 56.2%,
respectively, for our packaging products. We are also capable of managing our packaging inventory in
an efficient manner. For each year of the Track Record Period, the inventory turnover days of our paper
packaging business amounted to 58.7 days, 57.4 days and 54.5 days, respectively, which were below the
industry average, according to CIC. As of March 31, 2025, we owned 362 patents and 17 software
copyrights in relation to the design and manufacture of packaging for our paper packaging business. As
testament to our industry recognition, we ranked fifth in the “Top 100 Chinese Printing and Packaging
Enterprises” published by Printing Manager Magazine in 2022.
For the year ended December 31,
2022 2023 2024
Production volume (million sq.m.) 846.7 925.3 1,026.1
Inventory turnover days (Note) 58.7 57.4 54.5
Note: Inventory turnover days is calculated by dividing the average of the beginning and ending balances of inventories
of our paper packaging business for the relevant year by the corresponding cost of sales of our paper packaging
business for the same year, multiplied by 365 days.
SUMMARY
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--- page 15 ---
The table below sets forth a breakdown of our revenue generated from our paper packaging
business by type of paper packaging products:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Color Packaging Carton/Box 1,382,807 69.7 1,346,220 64.2 1,198,392 57.1
Eco-Friendly Paper Bag 203,308 10.3 325,787 15.6 387,593 18.5
Food Packaging 292,062 14.7 323,437 15.4 423,067 20.2
Others
(Note) 104,414 5.3 101,162 4.8 90,409 4.2
Total 1,982,591 100.0 2,096,606 100.0 2,099,461 100.0
Note: Others primarily consist of revenue generated from sales of materials and scrap paper.
The table below sets forth a breakdown of our gross profit and gross profit margin generated from
our paper packaging business by type of paper packaging products:
For the year ended December 31,
2022 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 %
Color Packaging Carton/Box 164,365 11.9 210,389 15.6 175,938 14.7
Eco-Friendly Paper Bag 55,464 27.3 98,321 30.2 110,700 28.6
Food Packaging 28,443 9.7 44,681 13.8 50,291 11.9
Others
(Note) 52,255 50.0 39,765 39.3 38,252 42.3
Total 300,527 15.2 393,156 18.8 375,181 17.9
Note: Others primarily consist of gross profit generated from sales of materials and scrap paper.
SUMMARY
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--- page 16 ---
OUR COMPETITIVE STRENGTHS
Committed to continuously adapting, discovering and developing popular products and services,
and empowering Chinese brands to reach the world through digitalization, we believe the following
competitive strengths have contributed to our success:
• we are an industry leader among B2C outbound social media e-commerce companies selling
products in Asia;
• our integrated AI technologies permeate our comprehensive, effective and scalable operating
system;
• our dynamic data analytical capabilities provide a solid foundation for our social
e-commerce business model;
• we possess effective and sophisticated supply chain management capabilities for our
cross-border social e-commerce business to enhance consumers satisfaction and optimize
cost control;
• through breakthroughs in marketing designs and R&D, we provide paper packaging products
that continuously maintain our long-term relationship with leading FMCG enterprise
customers; and
• our resilient organizational structure is led by visionary senior management team.
See “Business – Our Competitive Strengths” in this Prospectus for further details.
OUR STRATEGIES
Leveraging our competitive strengths and with access to more international resources upon
Listing, we intend to pursue the following strategies:
• deepen penetration in existing markets and expand our global footprint;
• continue to invest in R&D to continuously enhance the application of AI;
• develop our own brands to build brand value and capitalize on our proven data analytical
capabilities;
• continue to build GiiMall, our proprietary SaaS platform, to facilitate global expansion of
local SMEs;
• optimize our supply chain management for our cross-border social e-commerce business; and
• continue to invest in green paper packaging.
See “Business – Our Strategies” in this Prospectus for further details.
SUMMARY
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--- page 17 ---
MAJOR CUSTOMERS AND SUPPLIERS
Major Customers
Our customers primarily consist of enterprise customers which are FMCG companies under our
paper packaging business and individual consumers under our cross-border social e-commerce business.
Due to the nature of our cross-border social e-commerce business, the customer base for this business is
composed of a diverse group of individual consumers who purchase our products, each of whom
contributed to a very small portion of revenue as compared to our total revenue during the Track Record
Period.
For each year of the Track Record Period, sales from our five largest customers accounted for
28.7%, 24.3% and 27.2% of our total revenue, and sales from our largest customer accounted for 23.8%,
18.6% and 18.8% of our total revenue.
For details, see “Business – Our Customers – Major Customers”.
Major Suppliers
During the Track Record Period, our major suppliers include marketing services providers, social
media platforms, logistics companies and payment service suppliers for our cross-border social
e-commerce business and product suppliers and raw material suppliers for our paper packaging
business.
For each year of the Track Record Period, purchases from our five largest suppliers accounted for
34.6%, 39.6% and 38.1% of our total purchases, and purchases from our largest supplier accounted for
14.5%, 14.5% and 13.8% of our total purchases. For each year of the Track Record Period, the
purchases from our five largest suppliers for our cross-border social e-commerce business accounted for
49.5%, 54.6% and 55.7% of our total purchases of our cross-border social e-commerce business. For
each year of the Track Record Period, the purchases from our five largest suppliers for our paper
packaging business accounted for 40.5%, 36.2% and 28.8% of our total purchases for our paper
packaging business.
For more details, see “Business – Suppliers and Supply Chain Management – Major Suppliers”.
SUMMARY
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--- page 18 ---
OUR INDUSTRY AND COMPETITIVE LANDSCAPE
Cross-Border Social E-Commerce Business
We operate in the B2C outbound social media e-commerce market strategically focusing on the
Asian market. According to CIC, the size of China’s B2C outbound e-commerce market was
approximately US$29.1 billion in terms of revenue generated in Asia in 2024 through social media
e-commerce business. The total market share of the top five participants in this market was
approximately 6.5% based on revenue generated through social media e-commerce business in Asia in
2024. According to CIC, we ranked second among China’s B2C outbound e-commerce players based on
revenue generated through social media e-commerce business in Asia in 2024, with a market share of
1.3%. In terms of revenue in 2024, China’s B2C outbound social media e-commerce market accounted
for 12.7% of China’s B2C cross-border e-commerce market and 2.1% of the overseas B2C e-commerce
market, according to the same source. We primarily compete based on a number of factors in this
market: (i) digitalization and AI application capability; (ii) precision targeting capability; (iii) product
selection capability; (iv) localization capability; (v) multi-platform management capability; and (vi)
supply chain management capability. We believe we are well positioned to capitalize on the future
industry growth, leveraging our leading market position and extensive market knowledge.
Paper Packaging Business
We operate in the FMCG paper consumer packaging market in Mainland China. The market size of
FMCG paper consumer packaging market in Mainland China in 2024 was approximately RMB170.3
billion in terms of revenue. The total market share of the top five participants in China’s FMCG paper
consumer packaging industry was approximately 4.5% in 2024. This signifies an upward trend in market
concentration. According to CIC, in 2024, we ranked first among FMCG paper consumer packaging
companies in Mainland China, in terms of revenue, and our market share of FMCG paper consumer
packaging market in Mainland China was 1.2% in 2024. In terms of revenue in 2024, FMCG paper
consumer packaging market in Mainland China accounted for 68.6% of paper consumer packaging
market in Mainland China, and the latter accounted for 10.6% of packaging market in Mainland China,
according to the same source. We primarily compete based on a number of factors in this market: (i)
one-stop service capability; (ii) top-tier client coverage; (iii) process design and technology planning
capability; (iv) adaptability to the policy environment and emphasis on ESG; and (v) technology
capability. We believe we can compete effectively by virtue of our advanced technologies, rich market
experience and long-term relationship with leading FMCG enterprises.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables present our summary of consolidated financial information for the Track
Record Period. We have derived this summary from our financial information set forth in the
Accountants’ Report set out in Appendix IA to this Prospectus. The summary financial data set forth
below should be read together with our consolidated financial statements and the related notes, as well
as the section headed “Financial Information”.
SUMMARY
–9–


--- page 19 ---
Summary of Consolidated Statements of Comprehensive Income
The following table sets forth a summary of our consolidated statements of profit or loss for the
periods indicated.
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
REVENUE 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Cost of sales (3,197,031) (59.5) (3,590,378) (53.6) (3,109,944) (56.2)
GROSS PROFIT 2,178,853 40.5 3,104,303 46.4 2,419,315 43.8
Other income and gains 36,214 0.7 53,381 0.8 61,114 1.1
Selling and marketing
expenses (1,575,180) (29.3) (2,342,146) (35.0) (1,849,611) (33.5)
Administrative expenses (170,652) (3.2) (240,642) (3.6) (264,591) (4.8)
Research and development
expenses (148,512) (2.8) (141,980) (2.1) (124,429) (2.3)
Impairment losses on
financial assets (76,680) (1.4) (25,367) (0.4) (9,037) (0.2)
Share of (losses)/profits of
associates (4,865) (0.1) 1,854 0.0 3,584 0.1
Foreign exchange
gains/(losses), net 10,736 0.2 975 0.0 (3,512) (0.1)
Finance costs (21,627) (0.4) (13,412) (0.2) (12,250) (0.2)
Other expenses and losses (14,397) (0.2) (10,500) (0.2) (2,443) (0.0)
PROFIT BEFORE TAX 213,890 4.0 386,466 5.8 218,140 3.9
Income tax expenses (42,311) (0.8) (54,344) (0.8) (33,690) (0.6)
PROFIT FOR THE YEAR 171,579 3.2 332,122 5.0 184,450 3.3
Attributable to:
Owners of the parent 183,980 345,099 181,931
Non-controlling interest (12,401) (12,977) 2,519
171,579 332,122 184,450
Earnings per share
Basic and diluted (RMB) 0.48 0.92 0.49
SUMMARY
–1 0–


--- page 20 ---
NON-IFRS MEASURES
To supplement our consolidated financial statements which are presented in accordance with
IFRS, we also use adjusted profit (non-IFRS measure) as an additional financial measure, which is not
required by, or presented in accordance with, IFRS. We believe that such non-IFRS measure facilitate
comparisons of operating performance from period to period and company to company by eliminating
potential impacts of items.
We believe that adjusted profit (non-IFRS measure) provides useful information to investors and
others in understanding and evaluating our consolidated statements of comprehensive income in the
same manner as they help our management. However, our presentation of adjusted profit (non-IFRS
measure) may not be comparable to similarly titled measures presented by other companies. The use of
adjusted profit (non-IFRS measure) has limitations as an analytical tool, and you should not consider it
in isolation from, or as a substitute of, our consolidated statements of comprehensive income or
financial condition as reported under IFRS.
We define adjusted profit (non-IFRS measure) as profit for the year, adjusted by adding back
equity-settled share-based payment expenses.
The following table reconciles our adjusted profit for the year (non-IFRS measure) to profit for the
year presented in accordance with IFRS:
For the year ended December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Reconciliation of profit to adjusted
profit (non-IFRS measure):
Profit for the year 171,579 332,122 184,450
Add back:
Equity-settled share-based payment
expenses
(Note) 3,126 26,379 17,332
Adjusted profit for the year
(non-IFRS measure) 174,705 358,501 201,782
Note: Equity-settled share-based payment expenses mainly represent the arrangement that we receive services from
employees as consideration for our equity instruments and were non-cash in nature.
Our profit for the year increased by RMB160.5 million, or 93.5%, from RMB171.6 million in 2022
to RMB332.1 million in 2023, which was in line with the increase in our revenue in 2023. Our profit for
the year decreased by RMB147.6 million, or 44.5%, from RMB332.1 million in 2023 to RMB184.5
million in 2024, mainly due to a decrease in the revenue derived from our cross-border social
e-commerce business. See “Financial Information − Review of Historical Results of Operations − Y ear
Ended December 31, 2023 Compared to Y ear Ended December 31, 2024 − Revenue.”
SUMMARY
–1 1–


--- page 21 ---
Revenue breakdown by geographical market
The following table sets forth the breakdown of our total revenue by geographical market for the
periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Revenue
Northeast Asia (1) 1,794,364 33.4 2,541,774 38.0 1,738,742 31.4
Mainland China (2) 2,190,291 40.7 2,309,038 34.5 2,037,028 36.8
Southeast Asia (3) 677,902 12.6 846,808 12.6 661,433 12.0
Middle East (4) 409,467 7.6 385,919 5.8 341,777 6.2
Europe (5) and
North America (6) :
− U.S. 171,880 3.2 121,008 1.8 126,935 2.3
− Europe and other
countries in
North America 83,819 1.6 388,533 5.8 520,899 9.4
Others
(7) 48,161 0.9 101,601 1.5 102,445 1.9
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Notes:
(1) Northeast Asia primarily includes Japan, South Korea, Hong Kong SAR and Taiwan.
(2) Includes our paper packaging business and other businesses in Mainland China only. For details, see “Business –
Our Paper Packaging Business” and “Business – Our Other Businesses”.
(3) Southeast Asia primarily includes Thailand, Malaysia, Singapore and the Philippines.
(4) Middle East primarily includes Saudi Arabia and United Arab Emirates.
(5) Europe primarily includes Italy, Germany and Poland.
(6) North America primarily includes Canada and the United States.
(7) Includes revenues primarily generated from our paper packaging business in other countries or regions, such as
Australia and New Zealand.
SUMMARY
–1 2–


--- page 22 ---
The following table sets forth the breakdown of our cost of sales by business segment for the
periods indicated, both in actual terms and as a percentage of our total cost of sales:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Cost of sales
Cross-border social
e-commerce 1,269,838 39.7 1,571,742 43.8 1,329,134 42.8
Paper packaging 1,682,064 52.6 1,703,450 47.4 1,724,280 55.4
Others 245,129 7.7 315,186 8.8 56,530 1.8
Total 3,197,031 100.0 3,590,378 100.0 3,109,944 100.0
The following table sets forth the breakdown of our gross profit and gross profit margin by
business segment for the periods indicated:
For the year ended December 31,
2022 2023 2024
Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin
RMB’000 % RMB’000 % RMB’000 %
Cross-border social
e-commerce 1,836,763 59.1 2,684,895 63.1 2,036,769 60.5
Paper packaging 300,527 15.2 393,156 18.8 375,181 17.9
Other 41,563 14.5 26,252 7.7 7,365 11.5
Total 2,178,853 40.5 3,104,303 46.4 2,419,315 43.8
SUMMARY
–1 3–


--- page 23 ---
Our total revenue increased by RMB1,318.8 million, or 24.5%, from RMB5,375.9 million in 2022
to RMB6,694.7 million in 2023, primarily as a result of an increase in revenue derived from our
cross-border social e-commerce business. Our total revenue decreased by RMB1,165.4 million, or
17.4%, from RMB6,694.7 million in 2023 to RMB5,529.3 million in 2024, primarily because in 2024,
we adjusted personnel and resources to initiate our sales expansion into other under-penetrated areas
within Europe, and to develop and promote our own brands under our cross-border social e-commerce
business. As the development of such under-penetrated areas is in its early stages, we have not yet
generated significant revenue from such adjustments. Furthermore, our strengthened effort to build
traction for our own brands is aimed at laying a stronger foundation for future revenue growth, although
this contributed to a temporary decrease in revenue for the period. Additionally, foreign exchange rate
fluctuations in certain key markets, particularly in Japan and South Korea, adversely affected our
revenue. In 2024, the depreciation of Japanese yen and South Korean won against Renminbi, and our
reduced selling prices for certain products in such areas, led to our lower average selling price per order
recognized in Renminbi in such markets. Furthermore, as a result of the unpredictability of exchange
rate fluctuations, we strategically reduced the advertising expenses in these markets with significant
exchange rate fluctuations in 2024, which also led to the decrease in our number of fulfilled orders and
revenue in such markets. See “Financial Information – Review of Historical Results of Operations –
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2024 – Revenue.”
Our total gross profit increased by RMB925.5 million, or 42.5%, from RMB2,178.9 million in
2022 to RMB3,104.3 million in 2023. Our overall gross profit margin increased from 40.5% in 2022 to
46.4% in 2023, primarily as a result of the increase in the revenue contribution of our cross-border
social e-commerce business, which has a higher gross profit margin compared to that of our paper
packaging business. Our total gross profit decreased by RMB685.0 million, or 22.1%, from
RMB3,104.3 million in 2023 to RMB2,419.3 million in 2024. Our overall gross profit margin decreased
from 46.4% in 2023 to 43.8% in 2024, primarily as a result of the decrease in the revenue contribution
of our cross-border social e-commerce business, which has a higher gross profit margin compared to
that of our paper packaging business. See “Financial Information − Review of Historical Results of
Operations − Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2024 − Gross
Profit and Gross Profit Margin.”
SUMMARY
–1 4–


--- page 24 ---
Summary of Consolidated Statements of Financial Position
The following table sets forth selected information from our consolidated balance sheet as of the
dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Total non-current assets 1,135,997 1,330,874 1,529,001
Total current assets 2,106,389 2,255,702 1,974,093
TOTAL ASSETS 3,242,386 3,586,576 3,503,094
Total current liabilities 995,361 1,017,004 1,084,387
Total non-current liabilities 109,860 256,718 210,192
TOTAL LIABILITIES 1,105,221 1,273,722 1,294,579
Equity attributable to owners of
the parent 2,095,216 2,280,398 2,202,024
Non-controlling interests 41,949 32,456 6,491
TOTAL EQUITY 2,137,165 2,312,854 2,208,515
TOTAL EQUITY AND LIABILITIES 3,242,386 3,586,576 3,503,094
NET CURRENT ASSETS 1,111,028 1,238,698 889,706
As of December 31, 2023, we had net current assets of RMB1,238.7 million, as compared to
RMB1,111.0 million as of December 31, 2022, primarily due to the decrease in interest-bearing bank
borrowings and the increases in cash and cash equivalents and trade and bills receivables, partially
offset by increases in trade and bills payables and other payables and accruals.
As of December 31, 2024, we had net current assets of RMB889.7 million, as compared to net
current assets of RMB1,238.7 million as of December 31, 2023, primarily due to (i) an increase in trade
and bills payables, (ii) a decrease in cash and cash equivalents, and (iii) a decrease in prepayments,
other receivables and other assets, partially offset by an increase in trade and bills receivables.
As of December 31, 2022, 2023 and 2024, our net assets amounted to approximately RMB2,137.2
million, RMB2,312.9 million and RMB2,208.5 million, respectively. Our net assets increased by
RMB175.7 million, or 8.2%, from RMB2,137.2 million as of December 31, 2022 to RMB2,312.9
million as of December 31, 2023, primarily due to profit for the year of RMB332.1 million and
equity-settled share-based payment expenses of RMB26.4 million, partially offset by the dividends
declared of RMB177.2 million. Our net assets decreased by RMB104.3 million, or 4.5%, from
RMB2,312.9 million as of December 31, 2023 to RMB2,208.5 million as of December 31, 2024,
primarily due to profit for the year of RMB184.5 million, offset by shares repurchased for Share
Incentive Plans of RMB75.9 million and dividends declared of RMB203.2 million.
SUMMARY
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--- page 25 ---
Summary of Consolidated Statements of Cash Flows
During the Track Record Period and up to the Latest Practicable Date, we had funded our cash
requirements principally from cash generated from our operating activities and bank borrowings. As of
December 31, 2022, 2023 and 2024, we had cash and cash equivalents of RMB852.1 million,
RMB1,062.1 million and RMB711.1 million, respectively. The following table is a summary of our cash
flow data from our consolidated statement of cash flows for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Net cash flows generated from operating
activities 390,955 725,599 386,678
Net cash flows (used in) investing
activities (183,604) (282,387) (337,097)
Net cash flows (used in) financing
activities (31,968) (237,329) (394,574)
Net increase/(decrease) in cash and cash
equivalents 175,383 205,883 (344,993)
Cash and cash equivalents at beginning
of the year 666,852 852,071 1,062,110
Effect of exchange rate differences, net 9,836 4,156 (6,055)
Cash and cash equivalents at end of
the year 852,071 1,062,110 711,062
Key Financial Ratios
The following table sets forth our key financial ratios as of the dates or for the periods indicated:
For the year ended December 31,
2022 2023 2024
Profitability ratios:
Gross profit margin (1) 40.5% 46.4% 43.8%
Net profit margin (2) 3.2% 5.0% 3.3%
Adjusted net profit margin
(non-IFRS measure) (3) 3.2% 5.4% 3.6%
Return on equity (4) 8.5% 14.9% 8.2%
Return on total assets (5) 5.5% 9.7% 5.2%
SUMMARY
–1 6–


--- page 26 ---
As of December 31,
2022 2023 2024
Liquidity ratios:
Current ratio (6) 2.1 2.2 1.8
Quick ratio (7) 1.6 1.8 1.4
Inventory turnover days (8) 52.5 49.1 54.9
– Inventory turnover days of
cross-border social e-commerce
business
(9) 33.4 31.2 36.9
– Inventory turnover days of
paper packaging business (10) 58.7 57.4 54.5
Capital adequacy ratio:
Debt-to-equity ratio (11) 14.6% 11.2% 11.2%
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated using profit for the year divided by revenue and multiplied by 100%.
(3) Adjusted net profit margin (non-IFRS measure) is calculated using adjusted profit for the year (non-IFRS measure)
divided by revenue and multiplied by 100%. For details of the adjusted profit of the year (non-IFRS measure), see
“– Non-IFRS Measures”.
(4) Return on equity ratio is calculated using profit for the year as a percentage of the average balance of total equity at
the beginning and the end of the year and multiplied by 100%.
(5) Return on total assets ratio is profit for the year as a percentage of the average balance of total assets at the
beginning and the end of the year and multiplied by 100%.
(6) Current ratio is calculated using total current assets divided by total current liabilities.
(7) Quick ratio is calculated using total current assets less inventories divided by total current liabilities.
(8) Inventory turnover days is calculated using the average of the beginning and ending balances of total inventories for
the relevant year, divided by the corresponding total cost of sales for the same year, multiplied by 365 days.
(9) Inventory turnover days of our cross-border social e-commerce business is calculated using the average of the
beginning and ending balances of inventories of our cross-border social e-commerce business for the relevant year,
divided by the corresponding cost of sales of our cross-border social e-commerce business for the same year,
multiplied by the 365 days.
(10) Inventory turnover days of our paper packaging business is calculated using the average of the beginning and ending
balances of inventories of our paper packaging business for the relevant year, divided by the corresponding cost of
sales of our paper packaging business for the same year, multiplied by 365 days.
(11) Debt-to-equity ratio is calculated using total debt (being the carrying balance of the interest-bearing bank
borrowings) divided by total equity and multiplied by 100%.
See “Financial Information – Key Financial Ratios” in this Prospectus for details.
SUMMARY
–1 7–


--- page 27 ---
OFFERING STATISTICS
The numbers in the following table are based on the assumptions that (i) the Global Offering has
been completed and 67,910,000 H Shares are issued and sold in the Global Offering, and (ii)
452,679,288 Shares are issued and outstanding following the completion of the Global Offering.
Based on an
Offer Price of
HK$7.48 per
H Share
Based on an
Offer Price of
HK$10.68 per
H Share
Market capitalization of our H Shares after completion of
the Global Offering (1)
HK$508.0
million
HK$725.3
million
Market capitalization of our Shares after completion of
the Global Offering (2)
HK$6,306.9
million
HK$6,524.2
million
Unaudited pro forma adjusted net tangible assets per
Share (3) HK$6.06 HK$6.52
Notes:
(1) The calculation of market capitalization is based on 67,910,000 H Shares expected to be in issue and outstanding
following the completion of the Global Offering, assuming the price of such H Shares is the Offer Price as indicated
in the table.
(2) The calculation of market capitalization is based on 452,679,288 Shares expected to be in issue and outstanding
following the completion of the Global Offering, assuming that the Global Offering had been completed on
December 31, 2024, being the sum of (i) the market capitalization of the 384,769,288 A shares calculated based on
the closing price of such A shares on May 9, 2025, being the business day immediately preceding the Latest
Practicable Date, and (ii) the market capitalization of the 67,910,000 H Shares calculated based on the Offer Price as
indicated in the table.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per Share are
arrived at by dividing the unaudited pro forma adjusted net tangible assets by 452,679,288 Shares, being the number
of shares in issue assuming that the Global Offering had been completed on December 31, 2024 and excluding the
impact of the subsequent events: (i) the Company repurchased 744,200 A shares with the consideration of RMB9.6
million from January 1, 2025 to April 30, 2025 and (ii) on 15 May 2025, the Company announced a cash dividend of
RMB59,724,000 to be distributed. Including the impact of subsequent events, the unaudited pro forma adjusted
consolidated net tangible assets per Share as of December 31, 2024 would be HK$5.90 and HK$6.35, based on an
Offer Price of HK$7.48 and HK$10.68 per Share, respectively.
SUMMARY
–1 8–


--- page 28 ---
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
By virtue of the Takeovers Code, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang
Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue are deemed to be parties acting in concert. On February
5, 2024, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai,
Mr. Lu Tashan and Tibet Y ongyue executed the Concert Parties Agreement and pursuant to which they
constitute the Single Largest Group of Shareholders, entitled to control approximately 32.1%
# and
approximately 27.3% # of our Shares in aggregate as at the Latest Practicable Date and immediately
upon completion of the Global Offering, respectively.
Pursuant to the Concert Parties Agreement, all members of the Single Largest Group of
Shareholders agreed that they shall act in concert in respect of each of the members of our Group.
Pursuant to the Concert Parties Agreement, it was confirmed that each of Mr. Zhuang Shu, Ms. He
Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue had acted in accordance with Ms.
Zhuang Hao’s instructions prior to the date of the Concert Parties Agreement and from when they each
held voting rights at the meetings of the shareholders of the Company. Furthermore, Ms. Zhuang Hao,
Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Tibet Y ongyue and Mr. Lu
Tashan have undertaken to act in concert directly or indirectly through the companies controlled by
them. They have also agreed to, among others, (i) vote unanimously at all meetings of the shareholders
of each member of our Group, (ii) discuss and reach consensus with each other before proposing to such
meetings, and act in concert in respect of the business operations, governance and other key matters of
our Group which shall be decided by the shareholders of each of the members of the Group. In the event
that consensus cannot be reached, Ms. Zhuang Hao’s view shall prevail and the Single Largest Group of
Shareholders shall reflect her view in their decisions in such meetings accordingly. In addition, as
advised by our PRC Legal Advisor, the members of the Single Largest Group of Shareholders are parties
acting in concert pursuant to PRC laws and regulations and the Concert Parties Agreement, and the
Concert Parties Agreement is valid and in compliance with PRC laws and regulations.
As at the Latest Practicable Date, each of Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr.
Zhang Heping, Tibet Y ongyue (which is held as to 71.4% by Mr. Zhuang Zhenhai) and Mr. Lu Tashan
held 18.1%, 9.0%, 1.7%, 1.6%, 1.4% and 0.2%
# of our Shares, respectively.
For further details of the acting-in-concert arrangement among our Single Largest Group of
Shareholders, see “Relationship with Our Single Largest Group of Shareholders”.
# Includes 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan which shall only become saleable
upon the expiration of the corresponding lock-up periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and General
Information – E. 2023 Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the
performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any conditions or the
lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further
details of the Concert Parties Agreement, please refer to the section headed “History and Corporate Structure – Our
Shareholders Acting in Concert” in this section.
SUMMARY
–1 9–


--- page 29 ---
DIVIDEND
During the Track Record Period, we declared (i) an interim dividend for the first three quarters of
2022 of RMB99.5 million in January 2023, representing a dividend of RMB2.63 (inclusive of tax) for
every 10 A Shares of our Company, (ii) an interim dividend for the half year of 2023 of RMB75.7
million in September 2023, representing a dividend of RMB2.00 (inclusive of tax) for every 10 A Shares
of our Company, (iii) an annual dividend for 2023 of RMB136.8 million in March 2024, representing a
dividend of RMB3.60 (inclusive of tax) for every 10 A Shares of our Company (based on the number of
A Shares as of the date of approval of the dividend declaration by our Board of Directors, excluding the
A Shares repurchased and held as treasury shares), and (iv) an interim dividend for the first three
quarters of 2024 of RMB68.2 million in November 2024, representing a dividend of RMB1.80
(inclusive of tax) for every 10 A Shares of our Company (based on the number of A Shares as of the date
of approval of the dividend declaration by our Board of Directors, excluding the A Shares repurchased
and held as treasury shares). All such dividends have been fully settled. Furthermore, in May 2025, we
also declared the distribution of annual dividend for 2024, according to which an aggregate amount of
RMB59.7 million, representing a dividend of RMB1.58 (inclusive of tax) for every 10 A Shares of our
Company (based on the number of A Shares as of the date of the announcement, excluding the A Shares
repurchased and held as treasury shares) is announced to be settled in cash.
As of the Latest Practicable Date, we did not maintain any fixed dividend payout policy. As
stipulated under our articles of association, we would generally pay cash dividends annually and our
Board of Directors may also declare dividends by way of shares, or a combination of both cash and
shares, after taking into account our results of operations, financial condition, cash requirements and
availability and other factors as it may deem relevant at such time. Any declaration and payment of
dividends will be subject to our constitutional documents and applicable laws. Under our Articles of
Association, our Company shall give priority to the distribution of cash dividends and declare cash
dividends once per year in principle (subject to declaration of interim dividends), in the amount of at
least 20% of our profit available for distribution generated in that year, provided that (i) our Company’s
profit available for distribution generated in the year or half-year period and accumulated profits
available for distribution are positive, (ii) our Company has sufficient cash and the payment of
dividends would not affect the sustainability of our operations, (iii) our Company’s auditor has issued
an unqualified opinion on our financial statements of that year, and (iv) our Company does not have any
significant investment plan or significant cash expenditure. Our shareholders at a general meeting must
approve any declaration of dividends, which must not exceed the amount recommended by our Board of
Directors. In addition, our Directors may from time to time pay such interim dividends as our Board of
Directors considers to be justified by our profits and overall financial requirements. No dividend shall
be declared or payable except out of our profits and reserves lawfully available for distribution. Our
future declaration of dividends may or may not reflect our historical declarations of dividends and will
be at the absolute discretion of our Board of Directors.
SUMMARY
–2 0–


--- page 30 ---
RISK FACTORS
Our business and the Global Offering involved certain risks, which are set out in the section
headed “Risk Factors” in this Prospectus. Y ou should read that section in its entirety before you decide
to invest in the Offer Shares. Some of the major risks we face include:
• Disruption of our relationships and unfavorable changes in terms of our arrangements with
third-party business partners for our cross-border social e-commerce business could have a
material adverse effect on our business and results of operations.
• We may not be able to identify and respond to changes in consumption trends and consumer
preferences and market demand in a timely manner.
• Any material shortage or delay in supply by our suppliers or instability of their product
quality, any difficulty in sourcing products demanded by our consumers, and any difficulty in
maintaining our current relationships with our suppliers or finding replacements for our
suppliers in a timely manner, could materially and adversely affect our business.
• We operate in the competitive China’s B2C outbound social media e-commerce market and
FMCG paper consumer packaging industry in Mainland China. If we fail to compete
effectively and successfully, our customer base, market share and profitability may be
materially and adversely affected.
• We may not be able to successfully enhance our market penetration through expanding our
sales and distribution channels.
• If we are unable to maintain our existing level of production utilization rates for our
packaging products, or any unexpected disruption at our production facilities could have a
material adverse effect on our business, financial conditions and results of operations.
• We may not be able to maintain an effective quality control system for our business, and any
failure or deterioration of our quality control system would adversely affect our operations
and financial conditions.
• The operation of our cross-border social e-commerce business maybe affected by risks
related to logistics services provided by third parties.
HISTORICAL IMPACTS OF THE COVID-19 PANDEMIC
Since the end of December 2019, the outbreak of a novel strain of coronavirus, or COVID-19, has
affected the global economy. While we encountered various challenges due to the impact of COVID-19,
neither our operations nor our financial performance were materially and adversely affected during the
Track Record Period. For further details, see “Financial Information – Historical Impacts of the
COVID-19 Pandemic.”
SUMMARY
–2 1–


--- page 31 ---
REGULATORY DEVELOPMENTS
Regulatory Changes on Data Privacy and Protection
In recent years, privacy and data protection have become increasing regulatory focuses of
government authorities across the world. The PRC government has enacted a series of laws, regulations
and governmental policies for the protection of personal data, cybersecurity and data security in the past
few years. On December 28, 2021, the Cyberspace Administration of China (the “ CAC”) adopted the
updated Cybersecurity Review Measures (), which came into effect on February
15, 2022. The Cybersecurity Review Measures stipulates the mandatory requirement of cybersecurity
review for companies which hold more than one million users’ personal information when applying for
an overseas listing. However, our PRC Data Legal Advisor is of the view that we are not required to
apply for cybersecurity review according to Article 7 of the Cybersecurity Review Measures as a listing
in Hong Kong SAR is not deemed as a listing abroad within the meaning of the Cybersecurity Review
Measures, pursuant to the verbal consultation conducted by our PRC Data Legal Advisor with the China
Cybersecurity Review Certification and Market Regulation Big Data Center, the department delegated
by the CAC to accept consultation and applications for cybersecurity review.
In addition, on September 24, 2024, the State Council published the Regulations on the
Administration of Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Network Data Security
Regulations ”), which came into effect on January 1, 2025. The Network Data Security Regulations
provide implementing rules that cover various aspects, including personal information, data security,
and network security. Theses detailed requirements are built upon existing laws such as the
Cybersecurity Law (), the Data Security Law (), and the Personal
Information Protection Law (). Network data processors are required to comply with
these requirements during their daily operation to ensure the safety of network data. As advised by our
PRC Data Legal Advisor, we are in compliance with the requirements under the Network Data Security
Regulations, as applicable, in all material respects, on the bases that: (1) we have established an
effective internal system in connection with cybersecurity and data protection; (2) all personal
information and other kinds of network data collected and generated from PRC individuals during the
operation of PRC members of the Group in the PRC are currently stored within the territory of the PRC,
and we have not been informed by any governmental authorities that the data we process constitutes
important data or core data; and (3) as of the Latest Practicable Date, we had not been subject to any
administrative penalty related to cybersecurity or personal information protection issued by the PRC
authorities. See “Business – Data Compliance and Data Security – Data Compliance.”
SUMMARY
–2 2–


--- page 32 ---
Regulatory Changes on U.S. Tariff Regulations
In early 2025, the U.S. government issued multiple executive orders implementing additional tariff
on imports from various jurisdictions, including additional tariff amounting to an aggregate of 145% on
imports from the PRC that took effect on April 10, 2025, and the repeal of duty-free treatment under the
U.S. Tariff Act of 1930 for products imported from the PRC to the U.S. with the aggregated fair retail
value under US$800 per person per day (the “ De Minimis Exemption ”) which took effect from May 2,
2025. On May 12, 2025, the PRC government and U.S. government issued a joint announcement
acknowledging that both parties will take actions to build a sustainable and long-term trade relationship,
and the U.S. government is committed to take actions to (i) reduce the additional tariff rate to 54% on
imports from the PRC and Hong Kong SAR, of which the tariff duty amounting to 24% is subject to
temporary imposition suspension for an initial period of 90 days, and (ii) reduce the tariff rates of the
imports from the PRC that would have been subject to the De Minimis Exemption to 54% or US$100
per item. For each year of the Track Record Period, our revenue generated from exports to the U.S.
accounted for 3.2%, 1.8% and 2.3% of our total revenue, respectively, and our gross profit generated
from exports to the U.S. accounted for 1.1%, 0.8% and 1.3% of our total gross profit, respectively. We
have not considered the U.S. market as our primary focus and we do not expect the changes in U.S.
tariff regulations would result in a material adverse effect on our business and financial conditions.
However, the U.S. tariff and trade policies are subject to constant changes, influenced by evolving
geopolitical dynamics, economic priorities and regulatory agenda, and such policies may be amended,
expanded, or replaced with little or no advance notice. We cannot predict the timing, scope, or severity
of potential changes in tariff and trade policies, which may continue to evolve in the future. The
changes in U.S. tariff regulations may bring various second-order effects, for example, (i) the market
competition of global social e-commerce market with destinations in non-U.S. countries and regions
may be intensified as market players may shift their focus to non-U.S. markets, (ii) other countries may
take similar actions by imposing additional tariffs on products with Chinese origins following the
changes in U.S. tariff regulations, (iii) the demands and purchasing willingness of customers, those who
are price-sensitive in particular, may be bruised as cross-border e-commerce merchants may raise the
selling prices of products in response to the incremental tariff costs, and (iv) the global economy may be
subject to ongoing impact, such as slower growth rates or contractions. We cannot assure you that we
will not be influenced by the second-order effects arising from the changes in U.S. tariff regulations and
the potential impacts on us cannot be quantified. Furthermore, we cannot assure you that we will not be
subject to stricter tariff rules or trade restrictions in the future and we may be subject to various risks
relating to tariff changes. For more details, see “Risk Factors − Risks relating to our Business and
Industry − Our business operations involve multiple jurisdictions and are susceptible to changes in
international trade policies, tariff regulations and geopolitical tensions and “Business – Regulatory
Changes on U.S. Tariff Regulations.”
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Development of Share Repurchase Plan
On November 6, 2024, we published an announcement on the SZSE announcing that after
considering our future prospects, financial condition and the interest of our Shareholders, our Board of
Directors resolved to purchase A Shares from the secondary market, and the total budget of which will
be between RMB60 million to RMB100 million. As of April 30, 2025, we had repurchased a total of
744,200 A Shares from the secondary market with the transaction amount of approximately RMB9.6
million, excluding relevant transaction fees.
SUMMARY
–2 3–


--- page 33 ---
Summary of Financial Performance and Financial Position for the Three Months ended/as of
March 31, 2025
As required by the SZSE, we published our quarterly report in April 2025, containing our
unaudited consolidated financial statements as of and for the three months ended March 31, 2025,
prepared under the PRC GAAP . We have included our unaudited interim financial report prepared in
accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34 ”) as of
and for the three months ended March 31, 2025 in Appendix IB to this Prospectus. Our unaudited
consolidated financial statements have been reviewed by the Reporting Accountants in accordance with
Hong Kong Standard on Review Engagements 2410.
Summary of Consolidated Statements of Profit or Loss
The table below sets forth our condensed consolidated statements of profit or loss for the periods
indicated:
For the three months ended March 31,
2024 2025
RMB’000 % RMB’000 %
(Unaudited)
REVENUE 1,324,458 100.0 1,477,491 100.0
Cost of sales (787,783) (59.5) (805,801) (54.5)
GROSS PROFIT 536,675 40.5 671,690 45.5
Other income and gains 15,802 1.2 9,532 0.6
Selling and marketing expenses (399,171) (30.1) (513,981) (34.8)
Administrative expenses (63,995) (4.8) (64,571) (4.4)
Research and development expenses (28,799) (2.2) (32,156) (2.2)
(Accruals)/reversals of impairment on financial
assets (1,684) (0.1) 1,479 0.1
Share of profits/(losses) of associates 523 0.0 (1,433) (0.1)
Foreign exchange (losses)/gains, net (5,901) (0.4) 4,273 0.3
Finance costs (3,121) (0.2) (3,331) (0.2)
Other expenses and losses (590) (0.0) (108) (0.0)
PROFIT BEFORE TAX 49,739 3.8 71,394 4.8
Income tax expense (10,194) (0.8) (8,925) (0.6)
PROFIT FOR THE PERIOD
39,545 3.0 62,469 4.2
Earnings per share
Basic and diluted (RMB) 0.11 0.16
SUMMARY
–2 4–


--- page 34 ---
Our revenue increased from RMB1,324.5 million for the three months ended March 31, 2024 to
RMB1,477.5 million for the three months ended March 31, 2025, primarily due to an increase in the
revenue derived from our cross-border social e-commerce business.
Our revenue derived from the cross-border social e-commerce business increased by 28.2% from
RMB725.7 million for the three months ended March 31, 2024 to RMB930.1 million for the three
months ended March 31, 2025, primarily due to the increase in the number of fulfilled orders, as we (i)
strategically allocated resources to expand into certain under-penetrated areas within the Europe, and
(ii) increased our advertising activities in certain key markets, particularly South Korea and Thailand, as
the foreign exchange rates rebounded in such areas.
Our revenue derived from the paper packaging business remained relatively stable at RMB545.8
million for the three months ended March 31, 2025 compared with RMB548.0 million for the three
months ended March 31, 2024.
Our cost of sales increased from RMB787.8 million for the three months ended March 31, 2024 to
RMB805.8 million for the three months ended March 31, 2025, primarily due to the increase in the
revenue contribution of our cross-border social e-commerce business.
As a result of the foregoing, our total gross profit increased from RMB536.7 million for the three
months ended March 31, 2024 to RMB671.7 million for the three months ended March 31, 2025. Our
overall gross profit margin increased from 40.5% for the three months ended March 31, 2024 to 45.5%
for the three months ended March 31, 2025, primarily as a result of the increase in the revenue
contribution of our cross-border social e-commerce business, which has a higher gross profit margin
compared to that of our paper packaging business.
Our profit for the period increased from RMB39.5 million for the three months ended March 31,
2024 to RMB62.5 million for the three months ended March 31, 2025, with an increase in our net profit
margin from 3.0% for the three months ended March 31, 2024 to 4.2% for the three months ended
March 31, 2025.
SUMMARY
–2 5–


--- page 35 ---
Summary of Consolidated Statements of Financial Position
The following table sets forth selected information from our consolidated balance sheet as of the
dates indicated:
As of
December 31,
As of
March 31,
2024 2025
RMB’000 RMB’000
(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment 930,436 907,288
Right-of-use assets 176,350 168,151
Goodwill 9,585 9,585
Other intangible assets 19,910 19,105
Investment in associates 107,477 102,712
Equity investments designated at fair value through other
comprehensive income 8,254 8,254
Financial assets at fair value through profit or loss 130,863 130,500
Deferred tax assets 11,147 11,268
Time deposits 133,791 179,871
Other non-current assets 1,188 3,751
Total non-current assets 1,529,001 1,540,485
Current assets
Inventories 447,889 426,047
Trade and bills receivables 553,885 525,783
Prepayments, other receivables and other assets 141,874 150,134
Amounts due from related parties 1,243 1,009
Pledged deposits 67,971 84,814
Time deposits 50,169 64,228
Cash and cash equivalents 711,062 716,320
Total current assets 1,974,093 1,968,335
TOTAL ASSETS 3,503,094 3,508,820
SUMMARY
–2 6–


--- page 36 ---
As of
December 31,
As of
March 31,
2024 2025
RMB’000 RMB’000
(Unaudited)
LIABILITIES
Current liabilities
Trade and bills payables 716,560 682,878
Other payables and accruals 181,321 146,272
Contract liabilities 17,858 9,698
Interest-bearing bank borrowings 121,126 170,204
Lease liabilities 34,678 33,962
Tax payables 8,645 12,093
Amounts due to related parties 972 723
Other current liabilities 3,227 3,325
Total current liabilities 1,084,387 1,059,155
Non-current liabilities
Interest-bearing bank borrowings 127,067 105,817
Lease liabilities 49,465 43,386
Deferred income 30,945 31,042
Deferred tax liabilities 2,715 2,929
Total non-current liabilities 210,192 183,174
Total liabilities 1,294,579 1,242,329
EQUITY
Share capital 384,769 384,769
Reserves 1,817,255 1,870,465
Equity attributable to owners to the parent 2,202,024 2,255,234
Non-controlling interests 6,491 11,257
TOTAL EQUITY 2,208,515 2,266,491
TOTAL EQUITY AND LIABILITIES 3,503,094 3,508,820
Our net current assets increased from RMB889.7 million as of December 31, 2024 to RMB909.2
million as of March 31, 2025, primarily due to (i) a decrease in other payables and accruals, (ii) a
decrease in trade and bills payables, (iii) an increase in pledged deposits, and (iv) an increase in cash
and cash equivalents.
SUMMARY
–2 7–


--- page 37 ---
Summary of Consolidated Statements of Cash Flows
The table below sets forth selected information from our condensed consolidated statements of
cash flows for the periods indicated:
For the three months ended
March 31,
2024 2025
RMB’000 RMB’000
(Unaudited)
Net cash flows (used in)/from operating activities (94,035) 67,955
Net cash flows (used in) investing activities (73,105) (78,101)
Net cash flows (used in)/from financing activities (146,667) 11,636
Net (decrease)/increase in cash and cash equivalents (313,807) 1,490
Cash and cash equivalents at beginning of the period 1,062,110 711,062
Effect of foreign exchange differences, net (5,917) 3,768
Cash and cash equivalents at end of the period 742,386 716,320
We recorded net cash generated from operating activities of RMB68.0 million for the three months
ended March 31, 2025, which was primarily attributable to cash from operations of RMB71.7 million
for such period, partially offset by the payment of income tax of RMB5.7 million for the same period.
No Material Adverse Change
After performing sufficient due diligence work which our Directors consider appropriate and after
due and careful consideration, our Directors confirm that, up to the date of this Prospectus, there had
been no material adverse change in our financial or operating position or prospects since December 31,
2024, which is the end date of the periods reported on in the Accountants’ Report set out in Appendix IA
to this Prospectus, and there had been no event since December 31, 2024 and up to the date of this
Prospectus that would materially affect the information as set out in the Accountants’ Report included
in Appendix IA to this Prospectus.
LISTING ON OTHER SECURITIES EXCHANGES
Our A Shares have been listed and traded on the main board of the SZSE (stock code: 002803)
since July 12, 2016.
SUMMARY
–2 8–


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LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting fees
and commissions, and (ii) non-underwriting-related expenses, comprising professional fees paid to our
legal advisors and reporting accountants for their services rendered in relation to the Listing and the
Global Offering, and other fees and expenses. Assuming an Offer Price of HK$9.08 per H Share (being
the mid-point of the indicative Offer Price range stated in this Prospectus), the estimated total listing
expenses for the Global Offering are approximately RMB104.7 million (equivalent to HK$112.8
million), accounting for approximately 18.3% of our gross proceeds. Among such estimated total listing
expenses, we expect to pay underwriting-related expenses of RMB29.2 million, professional fees for
our legal advisors and reporting accountants of RMB37.2 million and other fees and expenses of
RMB38.3 million. An estimated amount of RMB13.4 million for our listing expenses is expected to be
expensed through the statement of profit or loss and an estimated amount of RMB91.2 million is
expected to be recognized directly as a deduction from equity upon the Listing.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$505.4 million after deducting the underwriting fees and expenses payable by us in the Global
Offering, assuming an Offer Price of HK$9.08 per H Share, being the mid-point of the indicative Offer
Price range of HK$7.48 to HK$10.68 per H Share in this Prospectus. We intend to use the net proceeds
from the Global Offering for the following purposes and in the amounts set out below, subject to
changes in light of our evolving business needs and changing market conditions:
• approximately 40%, or HK$202.2 million, will be allocated to overseas market expansion;
• approximately 35%, or HK$176.9 million, will be allocated to our technology development
in (1) our research and development capabilities, (2) data analytical capabilities to enhance
our business efficiency, and (3) GiiMall to expand our revenue streams;
• approximately 15%, or HK$75.8 million, will be allocated to the expansion of our brands
portfolio and development of our existing self-developed brands;
• approximately 10%, or HK$50.5 million, will be allocated to our working capital and other
general corporate purposes. For further details, please refer to the section headed “Future
Plans and Use of Proceeds” in this Prospectus.
SUMMARY
–2 9–


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In this Prospectus, unless the context otherwise requires, the following terms shall have the
following meanings. Certain technical terms are explained in the section headed “Glossary of
Technical Terms” in this Prospectus.
“A Share Shareholder(s)” Holder(s) of our A Share(s)
“A Shares” ordinary shares issued by our Company, with a nominal value
of RMB1.00 each, which are listed on the SZSE and traded in
Renminbi
“Accountants’ Report” the report from the Reporting Accountants dated May 19,
2025, the text of which is set out in Appendix IA to this
document
“affiliate” with respect to any specified person, any other person, directly
or indirectly, controlling or controlled by or under direct or
indirect common control with such specified person
“AFRC” or “Accounting and
Financial Reporting Council”
the Accounting and Financial Reporting Council of Hong
Kong
“Alibaba Cloud” Alibaba Cloud Computing Ltd. (ʮ̡ ), a
cloud computing service provider controlled by Alibaba Group
Holding Limited, whose shares are listed on the Stock
Exchange (stock code: 9988) and New Y ork Stock Exchange
(stock code: BABA)
“Anhui Jihong” Anhui Jihong EP Paper Products Co., Ltd. (ۜ
ʮ̡ ), a limited liability company incorporated in the
PRC on August 7, 2009 which is wholly-owned by our
Company
“Articles” or “Articles of
Association”
the articles of association of our Company, as amended, which
shall become effective on the Listing Date, a summary of
which is set out in “Appendix V – Summary of the Articles of
Association of the Company” to this Prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Board of Directors” the board of directors of our Company
“Board of Supervisors” the board of supervisors of our Company
“business day” any day (other than a Saturday, Sunday or public holiday in
Hong Kong SAR) on which banks in Hong Kong SAR are
generally open for normal banking business
“CAGR” compound annual growth rate
DEFINITIONS
–3 0–


--- page 40 ---
“CCASS” The Central Clearing and Settlement System established and
operated by HKSCC
“China”, “Mainland China”
or “PRC”
the People’s Republic of China and for the purposes of this
Prospectus only, except where the context requires otherwise,
excluding Hong Kong SAR, Macau SAR and Taiwan
“CIC” China Insights Industry Consultancy Limited, the industry
consultant, an independent third party
“CIC Report” an independent report prepared and issued by CIC with respect
to this Global Offering
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time to
time
“Company”, or “our Company” Xiamen Jihong Co., Ltd (ʮ̡ ,
formerly known as Xiamen Jihong Package Technology Ltd.*
(ʮ̡ ) and Xiamen Jihong
Printing Co., Ltd* (ʮ̡ )), a limited
liability company established in the PRC on December 24,
2003 and converted into a joint-stock company with limited
liability on December 3, 2010
“Company Law” the Company Law of the PRC (جas
amended, supplemented or otherwise modified from time to
time
“Concert Parties Agreement” the concert parties agreement entered into among the Single
Largest Group of Shareholders on February 5, 2024
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“connected transaction(s)” has the meaning ascribed to it under the Listing Rules
“CSDC” China Securities Depository and Clearing Corporation
“CSDC (Hong Kong)” China Securities Depository and Clearing (Hong Kong)
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍ଣ
ึ )
DEFINITIONS
–3 1–


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“CSRC Archive Rules” the Provisions on Strengthening Confidentiality and Archives
Administration of Overseas Securities Offering and Listing by
Domestic Companies (̋੶ྤʫΆุྤ̮೯БᗇՎձɪ
֛issued by the CSRC, the
Ministry of Finance of the PRC, the National Administration
of State Secrets Protection of the PRC, and the National
Archives Administration of the PRC (effective from March 31,
2023), as amended, supplemented or modified from time to
time
“CSRC Filing Rules” the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮
جand supporting guidelines
issued by the CSRC (effective from March 31, 2023), as
amended, supplemented or otherwise modified from time to
time
“CSRC Rules” the CSRC Filing Rules and the CSRC Archive Rules
“Director(s)” the director(s) of our Company
“EIT” the PRC enterprise income tax
“EIT Law” Enterprise Income Tax Law of the PRC
“ESG” environmental, social and governance
“EU” the European Union
“Extreme Conditions” any extreme conditions caused by a super typhoon as
announced by the government of Hong Kong SAR
“FIL” Foreign Investment Law (ج)
published by State Council in January 2020
“FINI” or “Fast Interface for
New Issuance”
an online platform operated by HKSCC that is mandatory for
admission to trading and, where applicable, the collection and
processing of specified information on subscription in and
settlement for all new listings
“fulfilled orders” orders during a given year that are accepted by consumers and
not returned
“Global Offering” the Hong Kong Public Offering and the International Offering
“Group”, “our Group”,
“we”, or “us”
the Company and its subsidiaries from time to time or, where
the context so requires, in respect of the period prior to our
Company becoming the holding company of its present
subsidiaries, such subsidiaries as if they were subsidiaries of
our Company at the relevant time
DEFINITIONS
–3 2–


--- page 42 ---
“Guide” the Guide for New Listing Applicants issued by the Stock
Exchange, as amended, supplemented or otherwise modified
from time to time
“H Share(s)” overseas listed foreign share(s) in our ordinary share capital,
with nominal value of RMB1.00 each, which are to be
subscribed for and traded in HK dollars and for which an
application has been made for listing and permission to trade
on the Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be issued in
the name of HKSCC Nominees and deposited directly into
CCASS to be credited to your designated HKSCC Participant’s
stock account through causing HKSCC Nominees to apply on
your behalf, including by instructing your broker or custodian
who is a HKSCC Participant to give electronic application
instructions via HKSCC’s FINI system to apply for the Hong
Kong Offer Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
“HKSCC Operation Procedures” the operational procedures of HKSCC in relation to CCASS,
containing the practices, procedures and administrative
requirements relating to the operation and functions of
CCASS, as from time to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hohhot Jihong” Hohhot Jihong Printing Packaging Co., Ltd* ( խձखत̹Λ҃
ʮ̡ ), a limited liability company incorporated
in the PRC on September 1, 2009 which is wholly-owned by
our Company
“Hong Kong SAR” or “HK SAR” the Hong Kong Special Administrative Region of the People’s
Republic of China
“Hong Kong Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
“Hong Kong dollars” or
“HK dollars” or “HK$”
Hong Kong dollars, the lawful currency of Hong Kong SAR
DEFINITIONS
–3 3–


--- page 43 ---
“Hong Kong Magic” Hong Kong Magic Digital Technology Co., Limited (ಥ௥Λ
ʮ̡ )
“Hong Kong Offer Shares” the 6,791,000 H Shares initially being offered for subscription
in the Hong Kong Public Offering (subject to reallocation as
described in the section headed “Structure of the Global
Offering” in this Prospectus)
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription by
the public in Hong Kong 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%) on
the terms and subject to the conditions described in this
Prospectus, as further described in the section headed
“Structure of the Global Offering – The Hong Kong Public
Offering” in this Prospectus
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering as listed in
the section headed “Underwriting – Hong Kong Underwriters”
in this Prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement, dated May 15, 2025, relating to
the Hong Kong Public Offering, entered into among our
Company, the Overall Coordinators, our Single Largest Group
of Shareholders, and the Hong Kong Underwriters, as further
described in the section headed “Underwriting – Underwriting
Arrangements and Expenses – Hong Kong Public Offering” in
this Prospectus
“Hongkong Shize” Hongkong Shize Digital Technology Co., Limited (ዣ
ʮ̡ ), a limited liability company incorporated
in Hong Kong on October 8, 2021 which is indirectly
wholly-owned by our Company
“Huanggang Jihong” Huanggang Jihong Packaging Limited* (ࠢ
ʮ̡), a limited liability company incorporated in the PRC on
April 1, 2019 which is wholly-owned by our Company
“Huawei Cloud” Xi’an Y uanyao Information Technology Co., Ltd.* ( Гτʩᘴ
ʮ̡ ), a cloud computing service provider
“IFRS” IFRS Accounting Standards, as issued from time to time by the
International Accounting Standards Board
“independent third party(ies)” any entity or person who is not a connected person of our
Company within the meaning ascribed thereto under the
Listing Rules
DEFINITIONS
–3 4–


--- page 44 ---
“International Offer Shares” the 67,910,000 H Shares being initially offered for
subscription and purchased at the Offer Price under the
International Offering, subject to reallocation as described
under the section headed “Structure of the Global Offering” in
this Prospectus
“International Offering” the offer of the International Offer Shares at the Offer Price
outside the United States in offshore transactions in
accordance with Regulation S or any other available exemption
from registration under the U.S. Securities Act, as further
described in the section headed “Structure of the Global
Offering” in this Prospectus (for the avoidance of doubt, of the
International Offer Shares initially being offered under the
International Offering)
“International Underwriters” the underwriters of the International Offering
“International Underwriting
Agreement”
the international underwriting agreement relating to the
International Offering and expected to be entered into by, inter
alia, our Company, the Overall Coordinators, our Single
Largest Group of Shareholders and the International
Underwriters on or about May 22, 2025, as further described
in the section headed “Underwriting – The International
Offering”
“inventory to sales ratio” calculated by using the average balance of inventories of our
cross-border social e-commerce business at the beginning and
the end of the year divided by revenue of our cross-border
social e-commerce business for such year
“Jiangxi Jihong” Jiangxi Jihong Supply Chain Management Co., Ltd.* ( ϪГΛ
ʮ̡ ), a limited liability company
incorporated in the PRC on September 9, 2019 which is
indirectly wholly-owned by our Company
“Jinan Jilian” Jinan Jihong Packaging Limited* (ʮ̡ ), a
limited liability company incorporated in the PRC on July 24,
2008 which is wholly-owned by our Company
“Jinrunyue” Khorgas Jinrunyue Network Technology Partnership (Limited
Partnership)* (ҦΥྫΆุ (Υྫ)),
previously known as Xiamen Jinrunyue Investment Co.,
Limited* (ʮ̡ ), a limited partnership
established in the PRC on June 28, 2010
“Joint Global Coordinators”,
“Joint Bookrunners” or
“Joint Lead Managers”
the joint global coordinators, the joint bookrunners and the
joint lead managers as named in “Directors, Supervisors and
Parties Involved in the Global Offering” in this Prospectus
DEFINITIONS
–3 5–


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“Joint Sponsors” China International Capital Corporation Hong Kong Securities
Limited and CMB International Capital Limited (in
alphabetical order)
“JYK Ecommerce” JYK Ecommerce Limited (ʮ̡ ), a
limited liability company incorporated in Hong Kong SAR on
September 27, 2017 which is indirectly wholly-owned by our
Company
“Langfang Jihong” Langfang Jihong Packaging Co., Ltd.* (ࠢ
ʮ̡), a limited liability company incorporated in the PRC on
January 8, 2013 which is wholly-owned by our Company
“Latest Practicable Date” May 11, 2025, being the latest practicable date for ascertaining
certain information in this Prospectus before its publication
“Listing” the listing of the H Shares on the Main Board
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on Tuesday, May 27, 2025, on which
the H Shares are listed and dealings in the H Shares are
permitted to commence on the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended, supplemented
or otherwise modified from time to time
“Luanzhou Jihong” Luanzhou Jihong Packaging Limited* (ʮ
̡), a limited liability company incorporated in the PRC on
January 22, 2014 which is a subsidiary of our Company
“Lucky Ecommerce” Lucky Ecommerce Limited (ʮ̡ ), a
limited liability company incorporated in Hong Kong SAR on
September 1, 2017 which is indirectly wholly-owned by our
Company
“Macau SAR” the Macau Special Administrative Region of the People’s
Republic of China
“Main Board” the stock exchange (excluding the option market) operated by
the Stock Exchange which is independent from and operates in
parallel with the GEM of the Stock Exchange
“Maximum Offer Price” HK$10.68 per H Share, being the high end of the Offer Price
range stated in this Prospectus
“MOFCOM” or “Ministry of
Commerce”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
DEFINITIONS
–3 6–


--- page 46 ---
“NDRC” the National Development and Reform Commission of the
PRC (ึ )
“Ningxia Jihong” Ningxia Jihong Environmental Protection Packaging
Technology Co., Ltd.* (ʮ̡ ), a
limited liability company incorporated in the PRC on
December 28, 2018 which is wholly-owned by our Company
“Northeast Asia” for the purpose of this Prospectus only, a geographical region
including Japan, South Korea, Hong Kong SAR and Taiwan
“Offer Price” the final price per H Share (exclusive of any brokerage fee,
SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee) of not more than HK$10.68 and
expected to be not less than HK$7.48 at which the H Shares
are to be subscribed for and issued pursuant to the Global
Offering, to be determined as described in section headed
“Structure of the Global Offering” in this Prospectus
“Offer Share(s)” the H Shares offered in the Global Offering
“order fulfillment rate” the ratio of fulfilled orders to new orders, calculated by
dividing the number of fulfilled orders by the number of new
orders during a given year. For the avoidance of doubt,
fulfilled orders do not include orders that are canceled or
returned after being placed
“our cross-border social e-commerce
business”
our business comprising: (1) primarily using social media
platforms for product promotion and traffic acquisition to
attract overseas consumers to purchase products on our
landing pages, with a strategic focus in Asia which includes
Northeast Asia, Southeast Asia and Middle East. For further
delineation, see “Business – Our Cross-border Social
E-commerce Business – Our Geographic Coverage”; and (2) to
a small extent, selling products of our own brands to
consumers on third-party e-commerce platforms and our
designated brand websites and providing our SaaS services
through GiiMall on a complimentary basis as of the Latest
Practicable Date
“Overall Coordinators” China International Capital Corporation Hong Kong Securities
Limited and CMB International Capital Limited (in
alphabetical order)
DEFINITIONS
–3 7–


--- page 47 ---
“Overseas Legal Advisors” collectively, SyCip Salazar Hernandez & Gatmaitan,
Weerawong, Chinnavat & Partners Ltd., Lee and Li,
Attorneys-at-Law, Shin & Kim LLC, Anderson Mori &
Tomotsune, Al Tamimi & Company, Christopher & Lee Ong,
Dentons Rodyk & Davidson LLP and Robertsons, legal
advisors of our Company in the jurisdictions where our Group
carries material overseas sales under our cross-border social
e-commerce business
“PBOC” People’s Bank of China ( ʕ਷ɛ͏ვБ ), the central bank of
the PRC
“PRC GAAP” the generally accepted accounting principles of the PRC
“PRC Data Legal Advisor” JunHe LLP , legal advisor of our Company as to PRC data
compliance matters
“PRC Legal Advisor” Beijing Kangda Law Firm, our legal advisor as to PRC laws
“PRC Securities Law” the Securities Law of the People’s Republic of China ( ʕശɛ
), as amended, supplemented or otherwise
modified from time to time
“Price Determination Agreement” the agreement to be entered into among our Company, the
Overall Coordinators (for themselves and on behalf of the
Underwriters) on or about the Price Determination Date to
record and fix the Offer Price
“Price Determination Date” the date, expected to be on or before Friday, May 23, 2025, on
which the Offer Price is to be fixed by an agreement among the
Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company
“Prospectus” this prospectus being issued in connection with the Hong Kong
Public Offering
“QSR” quick service restaurant, a specific type of restaurant that
serves fast food cuisine and has minimal table service
“Regulation S” Regulation S under the U.S. Securities Act
“Reporting Accountant” Ernst & Y oung
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“ROI” a metric used to assess the effectiveness of our advertising
efforts. We calculate ROI by dividing the revenue of our
cross-border social e-commerce business for the year by the
advertising cost for such year
“R&D” research and development
DEFINITIONS
–3 8–


--- page 48 ---
“SAFE” State Administration of Foreign Exchange of the PRC ( ʕശɛ
̮ි၍ଣ҅ )
“SAMR” State Administration for Market Regulation of the PRC ( ʕശ
̹ఙ္ຖ၍ଣᐼ҅ )
“SA T” State Administration of Taxation of the PRC ( ʕശɛ͏΍ձ਷
೼ਕᐼ҅ )
“SCNPC” The Standing Committee of the National People's Congress
(ึ )
“SEC” the Securities and Exchange Commission of the United States
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” or “Securities and
Futures Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the Laws
of Hong Kong), as amended, supplemented, or otherwise
modified from time to time
“Shaanxi Jihong” Shaanxi Jihong Packaging Limited* (ʮ̡ ),
a limited liability company incorporated in the PRC on
October 8, 2021 which is wholly-owned by our Company
“Share(s)” ordinary share(s) in the share capital of our Company with a
par value of RMB1.00 each, comprising our A Shares and our
H Shares
“Shareholder(s)” holder(s) of our Share(s)
“Single Largest Group of
Shareholders”
refers to Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying,
Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and
Tibet Y ongyue, details of which are set out in the section
headed “Relationship with Our Single Largest Group of
Shareholders” in this Prospectus
“SMEs” small and medium-sized enterprises
“Southeast Asia” for the purpose of this Prospectus only, a geographical region
including Thailand, Malaysia, the Philippines and Singapore
“Sponsor-Overall Coordinators”
(in alphabetical order)
China International Capital Corporation Hong Kong Securities
Limited and CMB International Capital Limited
“State Council” State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫ )
“Stock Exchange” The Stock Exchange of Hong Kong Limited
DEFINITIONS
–3 9–


--- page 49 ---
“subsidiary(ies)” has the meaning ascribed thereto in section 15 of the
Companies Ordinance
“substantial shareholders” has the meaning ascribed to it in the Listing Rules
“Supervisor(s)” the supervisor(s) of our Company
“SZSE” Shenzhen Stock Exchange
“Takeovers Code” The Code on Takeovers and Mergers issued by the SFC, as
amended, supplemented or otherwise modified from time to
time
“Tax Advisor” Ernst & Y oung (China) Advisory Limited, our advisor as to
overseas tax compliance
“Tibet Y ongyue” Tibet Y ongyue Shichao Corporate Management Co., Limited*
(ʮ̡ ), previously known as
Xiamen Y ongyue Investment Consulting Co., Limited* (ژ
ʮ̡ ), a limited liability company
incorporated in the PRC on June 30, 2010
“Track Record Period” the period comprising the three years ended December 31,
2022, 2023 and 2024
“Trial Measures” the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮
 ) promulgated by the CSRC
on February 17, 2023, as amended, supplemented or otherwise
modified from time to time
“U.S. dollars” or “US$” United States dollars, the lawful currency of the United States
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” United States Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
“United States” or the “U.S.” the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
“V A T” value-added tax
DEFINITIONS
–4 0–


--- page 50 ---
“VStar Packaging” VStar Packaging (China) Limited* (ࠢ
ʮ̡), a limited liability company incorporated in the PRC on
August 9, 2019 which is wholly-owned by our Company
“White Form eIPO ” the application for Hong Kong Offer Shares to be issued in the
applicant's own name by submitting applications online
through the designated website of the White Form eIPO
Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“Xiamen Jihong Packaging” Xiamen Jihong Packaging Industry Co., Limited* (Λ҃̍
ʮ̡ ), a limited liability company incorporated in
the PRC on March 25, 2020 which is wholly-owned by our
Company
“Xi’an Jikeyin” Jikeyin (Xi’an) Digital Technology Co., Ltd.* (Ι (Г
τ)ʮ̡ ), formerly known as Xi’an Jikeyin
Ecommerce Co., Ltd.* (ʮ̡ ), a
limited liability company incorporated in the PRC on August
3, 2017 which is indirectly wholly-owned by our Company
“Y ongyue Investment” Xi amen Y ongyue Investment Consulting Co., Limited* (ژ
ʮ̡ ), the predecessor of Tibet Y ongyue
“Zhengzhou Jikeyin” Jikeyin (Zhengzhou) Digital Technology Co., Ltd.* (܄
Ι(ቍψ)ʮ̡ ), formerly Zhengzhou Jikeyin
E-Commerce Co., Ltd.* (ʮ̡ ), a
limited liability company incorporated in the PRC on August
23, 2017 which is indirectly wholly-owned by our Company
“Yisainuo Information Technology” Zhengzhou Yisainuo Information Technology Co., Ltd.* ( ቍψ
ʮ̡ )
“1688.com” an integrated wholesale marketplace operated by Alibaba
Group Holding Limited
“2021 Restricted Share Incentive
Plan”
a restricted share incentive plan adopted by our Company on
June 11, 2021, for the purpose of incentivising eligible
management and employees of our Group which was
subsequently canceled in April 2022
“2022 Employee Share Ownership
Plan”
an employee share ownership plan adopted by our Company on
October 25, 2022, for the purpose of promoting the long term
development of the Company, retaining talents and
incentivizing our employees, details of which are described in
the section headed “Appendix VI – Statutory and General
Information” in this Prospectus
DEFINITIONS
–4 1–


--- page 51 ---
“2023 Restricted Share Incentive
Plan”
a restricted share incentive plan adopted by our Company on
August 30, 2023, for the purpose of incentivising eligible
management and employees of our Group, the principal terms
of which are set out in “Appendix VI – Statutory and General
Information” to this Prospectus
“%” per cent
Unless otherwise specified or the context otherwise requires:
1. all times refer to Hong Kong time; and
2. references to years, months and days in this Prospectus are to calendar years, calendar
months and calendar days, respectively.
In this Prospectus, the terms “associate”, “close associate”, “connected person”, “core
connected person”, “connected transaction” and “substantial shareholder” shall have the meanings
given to such terms in the Listing Rules, unless the context otherwise requires.
Certain amounts and percentage figures included in this Prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of
the figures preceding them. Any discrepancies in any table or chart between the total shown and the sum
of the amounts listed are due to rounding.
In this Prospectus, “ *” denotes translation of certain natural persons, legal persons, enterprises,
governmental authorities, institutions, entities, organizations, departments, facilities, laws and
regulations into Chinese or English (as the case maybe), etc., or another language included in this
Prospectus for identification purposes only. In the event of any inconsistency, the Chinese names or the
names in their original languages prevail.
In this Prospectus, number of countries/regions sold under our cross-border social e-commerce
business only takes into account representative markets where we recorded more than 300 valid orders
from the relevant country/region in a given year .
DEFINITIONS
–4 2–


--- page 52 ---
This glossary contains definitions of certain terms used in this Prospectus in connection with
our Company and our business. Some of these may not correspond to standard industry definitions or
usage of these terms.
“AI” artificial intelligence
“AIGC” artificial intelligence generated content
“API” application programing interface, a way to enable different
applications to interact with each other
“app” application software designed to run on a mobile device
“AWS” Amazon Web Services
“B2C” business-to-customer
“big data analytics” the use of advanced analytic techniques against large, diverse
sets of information, which greatly exceed the capabilities of
traditional database software tools in terms of data collection
and analysis, to uncover hidden patterns, correlations and
other useful information that can help organizations make
more informed decisions
“BRCGS” Brand Reputation through Compliance Global Standard
“ChatGiiKin-6B” a self-developed artificial intelligence content generation tool
of our Company
“China’s B2C outbound cross-border
e-commerce”
the market where revenue is generated by Chinese enterprises
through online sales channels to countries and regions outside
of Mainland China
“cloud-based” applications, services or resources made available to users on
demand via the Internet from a cloud computing provider’s
server with access to shared pools of configurable resources
“CPA” cost per action
“CPC” cost per click
“CPM” cost per mille
GLOSSARY OF TECHNICAL TERMS
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“deep learning” a subset of AI and machine learning that mimics the working
of biological neural systems such as human brains and uses
multi-layered neural networks to deliver accuracy in tasks such
as object detection and recognition, speech recognition and
natural language processing learn directly from raw data and
can increase its predictive accuracy when provided with some
data
“digitalization” the use of digital technologies to change a business model and
provide new revenue and value producing opportunities
“e-commerce” electronic commerce, which refers to the buying and selling of
goods or services using the Internet, and the transfer of money
and data to execute these transactions
“ERP” enterprise resource planning, a business process management
software that allows an organization to use a system of
integrated applications to manage the business and digitalize
back-office functions relating to technology, services, and
human resources
“ETL” extract, transform, load, which refers to a process of
processing data
“ETRS” Ethical Trade and Responsible Sourcing
“FMCG” fast-moving consumer goods
“FSC” Forest Stewardship Council
“G-king” a self-developed artificial intelligence assistant for
advertisement placement of our Company
“GiiAI” a self-developed artificial intelligence content generation tool
of our Company
“Giikin” a self-developed artificial intelligence comprehensive system
of our Company
“GiiMall” a self-developed SaaS platform of our Company
“GMP” good manufacturing practice, a production standard published
by World Health Organization
“Internet traffic” the flow of data packets transmitted and received over the
Internet, encompassing social media traffic, organic traffic and
platform traffic
“KOL” key opinion leader
GLOSSARY OF TECHNICAL TERMS
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“landing page” a sole-purpose transactional web page that pops up when a
potential customer clicks an advertisement or a search engine
result link
“machine learning” the use of algorithms and statistical models to effectively
perform specific tasks without being explicitly programmed to
do so
“REACH” Registration, Evaluation, Authorization and Restriction of
Chemicals issued by EU
“RoHS” Restriction of Hazardous Substances Directive issued by EU
“SaaS” software as a service, a software licensing and delivery model
in which software is licensed on a subscription basis and is
centrally hosted
“SKU” stock keeping unit, a unique identifier for each distinct
product, as distinguished by style, size and color, of products
which have been ordered during a given year
“sq.m.” square meter(s)
“Super Buyer” a user status awarded by 1688.com
“Transformer” a deep learning architecture based on the multi-head attention
mechanism
GLOSSARY OF TECHNICAL TERMS
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Certain statements in this Prospectus are forward-looking statements and information that are, by
their nature, subject to significant risks and uncertainties. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance
(often, but not always, through the use of words or phrases such as “will”, “expect”, “anticipate”,
“estimate”, “believe”, “going forward”, “ought to”, “may”, “seek”, “should”, “intend”, “plan”,
“projection”, “could”, “vision”, “goals”, “objective”, “target”, “schedule”, “predict”, “aim”, “intend”,
“consider”, “would”, “continue” and “outlook”) are not historical facts, but are forward-looking and
may involve estimates and assumptions and are subject to risks (including the risk factors detailed in
this Prospectus), uncertainties and other factors some of which are beyond our control and which are
difficult to predict. Accordingly, these factors could cause actual results or outcomes to differ materially
from those expressed in the forward-looking statements.
Our forward-looking statements have been based on assumptions and factors concerning future
events that may prove to be inaccurate. Those assumptions and factors are based on information
currently available to us about the businesses that we operate. The risks, uncertainties and other factors,
many of which are beyond our control, that could influence actual results include, but are not limited to:
• future developments, trends and conditions (including economic, political and business
conditions) in the industries and markets in which we operate or plan to operate;
• any changes in the laws, rules and regulations of the central and local governments in the
PRC and other relevant jurisdictions and the rules, regulations and policies of the relevant
governmental authorities relating to all aspects of our business;
• our planned projects and goals;
• our ability to control or reduce costs;
• our ability to control our risks;
• our ability to maintain good relationships with business partners;
• our business prospects and expansion plans;
• our ability to successfully implement our business plans and strategies;
• our financial condition and performance, debt levels and capital needs;
• our dividend policy;
• our capital expenditure plans;
• various business opportunities that we may pursue;
• the actions and developments of our competitors;
• our business strategies, objectives and plans and our ability to achieve these strategies;
• capital market developments;
FORW ARD-LOOKING STA TEMENTS
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• changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or
prices, including those pertaining to Mainland China and the industry and markets in which
we operate; and
• all other risks and uncertainties described in the section headed “Risk Factors” in this
Prospectus.
Since actual results or outcomes could differ materially from those expressed in any
forward-looking statements, we strongly caution investors against placing undue reliance on any such
forward-looking statement. Any forward-looking statement speaks only as of the date on which such
statement is made, and, except as required by the Listing Rules, we undertake no obligation to update
any forward-looking statement or statements to reflect events or circumstances after the date on which
such statement is made or to reflect the occurrence of unanticipated events. Statements of or references
to our intentions or those of any of our Directors are made as of the date of this Prospectus. Any such
intentions may change in light of future developments.
All forward-looking statements in this Prospectus are expressly qualified by reference to this
cautionary statement.
FORW ARD-LOOKING STA TEMENTS
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You should carefully consider all of the information in this Prospectus, including the risks and
uncertainties described below before making an investment in our H Shares. Our business, financial
condition, results of operations or prospects may be materially and adversely affected by any of these
risks and the trading price of our H Shares may decline as a result. You may lose all or part of your
investment.
These factors are contingencies that may or may not occur , and we are not in a position to
express a view on the likelihood of any such contingency occurring. The information given is as of
the Latest Practicable Date, unless otherwise stated, will not be updated after the date hereof, and is
subject to the cautionary statements in “F orward-looking Statements” in this Prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of which are
beyond our control. We have categorized these risks and uncertainties into: (i) risks relating to our
business and our industry; (ii) risks relating to our business and industry in the principal place of our
business; and (iii) risks relating to the Global Offering. There may be additional risks and uncertainties
presently not known to us or not expressed or implied below or those we currently deem immaterial
could also harm our business, financial condition and results of operations. Y ou should consider our
business and prospects in light of the challenges we face, including the ones discussed in this section.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Disruption of our relationships and unfavorable changes in terms of our arrangements with
third-party business partners for our cross-border social e-commerce business could have a
material adverse effect on our business and results of operations.
The operation of our cross-border social e-commerce business depends on our arrangements with
various third-party business partners, including digital marketing service providers and social media
platforms, such as Meta (including Facebook and Instagram), TikTok, Google (including Y ouTube),
Line, Snapchat and X (formerly Twitter). It is common for social media platforms to constantly update
their policies without prior notice. Changes in their policies, such as an increase in price for
advertisement placement, may result in an increase in our costs and expenses. In addition, social media
platforms also have the right to interpret how they would implement their policies. We cannot assure
you that social media platforms will not adopt new policies, change existing policies or change the
interpretation of existing policies that may be materially adverse to us. For example, we cannot assure
you that they will not exercise their discretion to remove, either inadvertently or deliberately, our
advertisements or the links to our landing pages or even suspended or terminate our advertisement
placement in the future, which may materially and adversely affect our business, financial condition and
results of operations. Furthermore, there can be no assurance that social media platforms could always
offer sufficient advertisement space to us on competitive pricing terms. If there is any loss or
deterioration of our relationship with existing social media platforms and/or digital marketing service
providers, or if we fail to develop relationship with new social media platforms and digital marketing
service providers to expand the reach of our cooperation, we may not be able to find replacement from
other social media platforms for advertisement placing in a timely and cost-effective manner, or at all,
which may materially and adversely affect our cross-border social e-commerce business and results of
operations.
RISK FACTORS
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As part of our cross-border social e-commerce business, we place advertisements on social media
platforms through digital marketing service providers to advertise our products. For each year of the
Track Record Period, we recorded advertising costs as selling and distribution expenses amounting to
RMB1,491.4 million, RMB2,242.2 million and RMB1,761.1 million, representing 94.7%, 95.7% and
95.2% of our total selling and distribution expenses, respectively. In addition, during the Track Record
Period, our advertising expenses were concentrated on a limited number of social media platforms. We
expect social media platforms will continue to be our primary method of marketing and promotion in
the foreseeable future. As such, our profitability, financial performance and financial conditions rely on,
among other things, the continued strong business relationships between on the one hand, social media
platforms and digital marketing service providers and, on the other hand, us. See “Business – Our
Cross-border Social E-commerce Business” for more details. We cannot assure you that we will be able
to maintain strong business relationships with our business partners, such as digital marketing service
providers and social media platforms, or there will not be unfavorable changes in our current
arrangements. Under our agreements with digital marketing service providers, either party can
terminate the agreement by serving advance written notice. There is no assurance that digital marketing
service providers will not terminate the agreements with us or there will not be any unfavorable changes
in our current arrangements, such as a substantial increase in the service fee charged by social media
platforms that may be passed on to advertisers like us. In the case that digital marketing service
providers amend the terms of agreements to make them unfavorable to us, the profitability of our
products may be materially and adversely affected.
During the Track Record Period, we sourced products through suppliers registered on 1688.com, a
wholesale marketplace operated by Alibaba. Operational interruption of 1688.com may affect our
ability to source products from a significant number of our products suppliers and adversely affect our
business, financial condition and results of operations.
We may not be able to identify and respond to changes in consumption trends and consumer
preferences and market demand in a timely manner .
Our business performance is sensitive to consumption trends and consumer preferences, and
market demands which change from time to time.
Consumers of our cross-border social e-commerce business in different geographical locations
have varied demands and online shopping tastes and patterns. The success of our cross-border social
e-commerce business is largely dependent on our ability to understand and anticipate consumption
trends, consumer preferences and market demand to discover products that match the appetites of our
target consumers, accurately place recommendations to potential consumers and to address evolving
needs and preferences. Consumption trends and consumer preferences differ within and across different
countries and regions and among different consumer groups, thus are influenced by factors such as
consumer tastes, regional history and culture. Although we apply AI algorithms in product discovery
and advertisement placement, we may not be able to discover products that cater to changing consumer
preferences or recommend relevant products to interested consumers. Any failure to accurately
anticipate trends and react to prevailing consumer preferences in a timely manner could adversely affect
our sales performance, result in obsolete inventories and lead to a reduction in our business profitability,
which may, in turn, have a material adverse effect on our cross-border social e-commerce business,
financial condition and results of operations.
RISK FACTORS
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The performance of our paper packaging business depends on our ability to continuously
anticipate, adapt or respond to changes in general consumer preference and market demand and make
improvements to existing products design and development. With years of operations in the FMCG
paper consumer packaging market in Mainland China, we have accumulated knowledge about and
insights into general consumer preferences and demand. However, as general consumer preferences and
demand are continuously changing, there is no guarantee that we will always be able to anticipate and
adapt to the shift and design, produce and offer products to address general consumer needs. If we fail
to anticipate, adapt to or timely respond to changes in general consumer preferences and demands in the
FMCG paper consumer packaging market, we may suffer a decrease in demand for our paper packaging
product or if enterprise customers lose confidence in our paper packaging products, a loss in enterprise
customers, which may, in turn, have a material adverse effect on our paper packaging business.
Any material shortage or delay in supply by our suppliers or instability of their product quality,
any difficulty in sourcing products demanded by our consumers, and any difficulty in maintaining
our current relationships with our suppliers or finding replacements for our suppliers in a timely
manner, could materially and adversely affect our business.
For our paper packaging business, we rely on the stable relationship with raw material suppliers to
maintain our production schedules and commitment to our customers. For each year of the Track Record
Period, raw material costs associated with our paper packaging business represented approximately
77.9%, 77.9% and 76.1%, respectively, of our total cost of sales of our paper packaging business. We
procure our products from various product suppliers in Mainland China for our cross-border social
e-commerce business and raw paper from raw paper suppliers for our paper packaging business. For
each year of the Track Record Period, the cost of sales associated with cross-border social e-commerce
business accounted for approximately 39.7%, 43.8% and 42.8%, respectively, of the total cost of sales
of our Group. The operations of our suppliers are vulnerable to business interruptions due to natural
disasters, infectious diseases or other catastrophic events, such as storms, fires, floods, earthquakes,
typhoons, power shortages and failures, water shortages, hardware failures, outbreak of COVID-19
pandemic, terrorist attacks, wars or such other reasons which may or may not be foreseeable or
otherwise within their control. If we fail to timely replace our suppliers affected with qualified
substitute under our stringent selection criteria, the occurrence of any such natural disasters or
catastrophic events could cause material shortages or delays in the supply of raw materials or products
by our suppliers.
Moreover, we may not be able to monitor the production quality of our suppliers directly and
effectively. If our suppliers fail to supply products in accordance with our quality standards or product
specifications, the delivery of suitable products may be delayed, which could harm our reputation and
operations.
In addition, we may face difficulties in sourcing products demanded by our consumers. If we fail
to source products or sufficient quantity of products demanded by our consumers from our product
suppliers in a timely manner, our cross-border social e-commerce business, financial condition and
results of operations may be adversely affected. Furthermore, we may not be able to identify sufficient
numbers of suitable suppliers or may need significant amount of time to locate new suppliers when we
experience significant increases in demand for our products or if we are required to replace our
suppliers. If we are unable to retain our current major suppliers or contract new suppliers at terms
acceptable to us in a timely manner, our business, financial condition and results of operations could be
materially and adversely affected.
RISK FACTORS
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We operate in the competitive China’s B2C outbound social media e-commerce market and FMCG
paper consumer packaging industry in Mainland China. If we fail to compete effectively and
successfully, our customer base, market share and profitability may be materially and adversely
affected.
We operate in China’s B2C outbound social media e-commerce market. We primarily compete
based on a few major factors: (i) digitalization and AI application capability; (ii) precision targeting
capability; (iii) product selection capability; (iv) localization capability; (v) multi-platform
management capability; (vi) supply chain management capability. See “Industry Overview – Overview
of China’s B2C Outbound Social Media E-commerce Market”. There can be no assurance that we will
be able to address these challenges and compete successfully against current and future competitors,
and those competitive pressures may have a material adverse effect on our business, financial condition
and results of operations.
We also face competition in the FMCG paper consumer packaging market in Mainland China. We
primarily compete based on a number of factors in this market: (i) one-stop service capability; (ii)
top-tier client coverage; (iii) process design and technology planning capability; (iv) adaptability to the
policy environment and emphasis on ESG; (v) technology capability. If we are unable to control our
costs or anticipate and respond to changing enterprise customer needs, we may not be able to compete
successfully which in turn could have an adverse impact on our sales of packaging products and our
results of business operations.
We may not be able to successfully enhance our market penetration through expanding our sales
and distribution channels.
Our distribution channels have been a critical factor in driving our cross-border social e-commerce
business growth and achieving strong operating results. We have established a broad advertisement
placement strategy, covering different social media platforms, to sell and market our products. During
the Track Record Period, we had more than 611,000 SKUs. See “Business – Our Cross-border Social
E-commerce Business”. For each year of the Track Record Period, our revenue generated from our
cross-border social e-commerce business amounted to RMB3,106.6 million, RMB4,256.6 million and
RMB3,365.9 million, respectively, accounting for 57.8%, 63.6% and 60.9%, respectively, of our total
revenue.
For our paper packaging business, we maintain a group of sales and marketing staff, focusing on
maintaining and growing the relationships with our existing enterprise customers. From time to time,
our sales and marketing staff will provide the latest information about our services, sample designs,
shipping routes, shipping schedules and fee quotations to our enterprise customers for their selection
based on their needs.
To further increase our market share, we plan to invest more advertisement expenses to further
increase market penetration. The expansion of our sales and distribution channels may put pressure on
our managerial, financial, operational and other resources and affect our profitability in the short term.
If we are unable to continuously improve our market penetration and reach through expanding our sales
and distribution channels, our sales volume, our growth potential and profitability could be materially
and adversely affected.
RISK FACTORS
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If we are unable to maintain our existing level of production utilization rates for our packaging
products, or any unexpected disruption at our production facilities could have a material adverse
effect on our business, financial conditions and results of operations.
For each year of the Track Record Period, we achieved production utilization rates of
approximately 63.2%, 55.7% and 56.2%, respectively, for our packaging products. For details of the
production utilization rates, please refer to the section headed “Business – Our Paper Packaging
Business – Our Production Facilities” in this Prospectus. The utilization rates of our production plants
depend primarily on the demand for our products. The utilization rates may also be affected by various
other factors, such as skills of our employees, adverse weather conditions, natural disasters and
breakdown of our production equipment. There is no assurance that we will be able to maintain a
comparable level of output and utilization rates for our production plants in the future. In the event that
we are unable to maintain the existing level of utilization rates for any or all of our production plants,
our business, financial conditions and operating results may be materially and adversely affected.
In addition, smooth and consistent daily operations of our production facilities are highly crucial
to our paper packaging business. Regular repair and maintenance for our production facilities are
scheduled by our production department. We cannot assure you that there will be no sudden malfunction
or stoppage of our production facilities during our daily operations and if any breakdown or
malfunctions of machinery happened, our business, financial conditions and results of operations could
be adversely impacted.
Our production requires significant and constant supply of electricity and water. If at any time we
do not have adequate electricity and water to sustain normal production due to blackouts, shortage of
electricity and water, we may need to limit, delay or halt production, and any disruption to such supply
may adversely affect our production flow, prevent us from meeting enterprise customer orders and/or
increase our costs of production, which could adversely affect our business and financial performance.
Our business operations involve multiple jurisdictions and are susceptible to changes in
international trade policies, tariff regulations and geopolitical tensions.
Prior to 2025, products of Chinese origin being exported into the U.S. were subject to duties
ranging from 7.5% to 50% under Section 301 of the U.S. Trade Act of 1974, and imports from the PRC
and Hong Kong SAR were free of these duties using informal entry procedures if they have an aggregate
fair retail value of less than US$800 (per person, per day) (the “ De Minimis Exemption ”) under the
U.S. Tariff Act of 1930. Since early 2025, the U.S. government has issued multiple executive orders
implementing additional tariff on imports from various jurisdictions, including additional tariff
amounting to an aggregate of 145% on imports from the PRC and Hong Kong SAR that took effect on
April 10, 2025 (the “ Tariff Increases ”). Moreover, the U.S. government also issued executive orders
repealing the De Minimis Exemption with effect from May 2, 2025, and imported goods from the PRC
and Hong Kong SAR that are sent through the international postal network valued at or under US$800
will be subject to a duty rate of either 120% of their value or US$100 per item (the Tariff Increases and
the repeal of the De Minimis Exemption collectively, the “ U.S. Tariff Changes ”). On May 12, 2025, the
PRC government and U.S. government issued a joint announcement acknowledging that both parties
will take actions to build a sustainable and long-term trade relationship, and the U.S. government is
committed to take actions to (i) reduce the additional tariff rate to 54% on imports from the PRC and
Hong Kong SAR, of which the tariff duty amounting to 24% is subject to temporary imposition
suspension for an initial period of 90 days, and (ii) reduce the tariff rates of the imports from the PRC
that would have been subject to the De Minimis Exemption to 54% or US$100 per item.
RISK FACTORS
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However, the U.S. tariff and trade policies are subject to constant changes, influenced by evolving
geopolitical dynamics, economic priorities and regulatory agenda, and such policies may be amended,
expanded, or replaced with little or no advance notice. We cannot predict the timing, scope, or severity
of potential changes in tariff and trade policies, which may continue to evolve in the future. The U.S.
Tariff Changes may bring various second-order effects, for example, (i) the market competition of
global social e-commerce market with destinations in non-U.S. countries and regions may be intensified
as market players may shift their focus to non-U.S, markets, (ii) other countries may take similar actions
by imposing additional tariffs on products with Chinese origins following the U.S. Tariff Changes, (iii)
the demands and purchasing willingness of customers, those who are price-sensitive in particular, may
be bruised as cross-border e-commerce merchants may raise the selling prices of products in response to
the incremental tariff costs, and (iv) the global economy may be subject to ongoing impact, such as
slower growth rates or contractions. We cannot assure you that we will not be influenced by the
second-order effects arising from the U.S. Tariff Changes and the potential impacts on us cannot be
quantified. Furthermore, we cannot assure you that we will not be subject to stricter tariff rules or trade
restrictions in the future. Any future deteriorating changes in the tariff policies of the U.S. and other
jurisdictions towards the PRC may incur additional costs, affect our profitability level and deter market
demands of our products, and we may face a decrease in revenue while simultaneously experiencing
increased costs. Additionally, if any changes are implemented faster and/or more strictly than
anticipated, we may not be able to respond and mitigate the risks associated effectively and timely. Any
of the above could negatively affect our performance, financial results and business operations. See “-
Risks relating to our Business and Industry - Our operations may be affected by and subject to licensing
and other requirements under laws and regulations of various jurisdictions where we operate or sell
products.” and “Business – Regulatory Changes on U.S. Tariff Regulations.”
We may not be able to maintain an effective quality control system for our business, and any
failure or deterioration of our quality control system would adversely affect our operations and
financial conditions.
The quality of our products is critical to the success of our business. The quality of our products is
mainly dependent on the effectiveness of our quality control system. To ensure that products are
manufactured according to our enterprise customers’ requirements, we will set specific quality control
standards and requirements for each product according to its specification.
Our packaging and printing production facilities have passed professional certification
qualifications, such as ISO9000 quality management system, ISO14001 environmental system, and
BRCGS ETRS social responsibility certification. For further details of our quality control system,
please refer to the section headed “Business – Our Paper Packaging Business – Our Business Process –
Quality Control” in this Prospectus. For out cross-boarder e-commerce business, we perform quality
check after the products arrive at our leased warehouses.
Any failure of our quality control system or non-adherence to the measures under such quality
control system could result in the production of defective or substandard products, which in turn may
impair our reputation, result in delays in the delivery of our products and the need to replace defective
or substandard products, which could have a material and adverse impact on our business, financial
conditions and results of operations. Other than conducting exterior checks of the products, we are
unable to monitor the production quality of our suppliers directly and effectively. If our suppliers fail to
supply products in accordance with quality standards or product specifications, the delivery of suitable
products may be delayed, which could harm our reputation and operations.
RISK FACTORS
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The operation of our cross-border social e-commerce business may be affected by risks related to
logistics services provided by third parties.
We work with logistics service providers to manage the transportation, distribution, and overall
flow of our products. For cross-border social e-commerce business, we typically arrange for the product
to be shipped by third-party logistics service providers from our domestic warehouses to consumers
overseas, who are also responsible for customs clearance and payment of import/export duties. The
logistic service providers are responsible for collecting payments from our consumers when the
consumer has elected to pay on a cash on delivery basis. For paper packaging business, we deliver the
finished products to the locations designated by our consumers (or as stipulated in the purchase orders)
by third-party logistics companies. Disputes in or terminations of contractual relationships with one or
more of our logistics service providers could result in delayed delivery of products or increased costs.
Any failure to maintain or develop good relationships with logistics service providers may inhibit our
ability to offer products in sufficient quantities, on a timely basis, or at prices acceptable to our
consumers.
Moreover, as we do not have any direct control over our logistics service providers, we cannot
guarantee the quality of their services. Delay in delivery, damage to products or other issues may cause
us to lose consumers and sales may be tarnished. Any breakdown in our relationships with our preferred
logistics service providers, increase in the logistics service costs, or deficiencies in the services they
provide may materially and affect our business, financial condition and results of operations.
We could be negatively impacted if our and/or social media platforms’ data analytics capabilities
become ineffective.
As part of our social e-commerce business, we employ data analytics in conjunction with our
proprietary AI algorithms and models to select products based on consumer needs and preferences, as
well as to maximize the effectiveness of our advertisement placement efforts. Through analyzing data,
in compliance with data protection laws and regulations, we match products with consumer needs and
accurately place advertisements to draw consumers to landing pages that facilitate the purchase of the
products.
RISK FACTORS
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In addition, as we place advertisements through social media platforms, the data analytics
capabilities of our social media platforms also impact the efficacy of our social e-commerce business
model. In April 2021, Apple changed its policy whereby iPhone users were allowed to choose whether
to agree to be tracked on different apps which had a limited impact on the conversion rate of precision
marketing of social media platforms in the industry, according to CIC. In response to such policy
change, many social media platforms, including those we place advertisements on, turned to
SKAdNetwork-based (“ SKAN-based ”) advertising attribution technology, which provides aggregated
insights in measuring the effectiveness of advertisements placed with no user level data, enabling
advertisers to make informed adjustments to their marketing strategies without the need to track user
activities thereby easing the impact of Apple’s policy change, and such technology has been commonly
adopted by social media platforms since Apple’s policy change, according to CIC. We have not
witnessed any drop in number of orders or sales amounts under our cross-border social e-commerce
business that correspond to Apple’s policy change in 2021. We have included a clause regarding
compliance with all applicable laws, legal duties and contractual and other legal obligations in respect
of its performance in our agreement with the social media platforms to minimize the exposure to
potential violations of third-parties’ policies that could limit its access to the consumers and thus
adversely affect our business. In addition, in the event that the social media platforms have to amend
their policies, applications and/or operation systems, our digital marketing service providers agree to
help us in seeking solutions to accommodate the changes with the social media platforms. We cannot
assure you that our business will not be affected by policy changes of various third parties relating to
our operations. See “Business – Our Cross-border Social E-commerce Business – Advertisement
Placement – Social Media Platform.” and “Business – Our Cross-border Social E-commerce Business –
Advertisement Placement – Digital Marketing Service Providers.” In addition, we cannot assure you
that such changes in policies will not happen in the future, which could indirectly affect the efficacy of
the algorithms and models of our own and of the social media platforms that we collaborate with or
place advertisements on and in turn, the efficacy of our advertisement placement efforts.
In addition, with the volume of data increasing, our algorithms and systems must conduct
increasingly complex processing and analyzing tasks. To the extent our algorithms and systems fail to
accurately analyze relevant data and information, or experience significant errors or defects, we may not
be able to effectively match our products with consumers, which could affect our sales and profitability,
result in a decline of our market share, and materially affect our business, results of operations and
financial condition.
We depend on the proper functioning of our technologies and IT systems, and the Internet
infrastructure and telecommunication network.
Our success and our capacity to draw in and retain consumers and enterprise customers depend on
the efficient operation, appropriate and stable performance, convenient accessibility, and ongoing
updating of our technology, algorithms and platforms. We also rely on our self-developed unified
operations management system, Giikin, to operate our business. Our systems may be vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions, which could lead to system
interruptions, website slowdown or unavailability, delays or errors in transaction processing, loss of
data or the inability to accept and fulfill consumers’ orders. During the Track Record Period, we were
not subject to these types of attacks that had materially and adversely affected our business operations.
However, there can be no guarantee that we will not be exposed to attacks like these in the future, which
could require us to spend a significant amount of money and resources to restore functionality. Any such
future occurrences may have a material adverse impact on our business, financial condition and results
of operation.
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As our business expands, we expect to continue investing in our IT systems and may potentially
increase our investment, especially in AI algorithms and our proprietary Giikin system. We may
recognize costs associated with these investments earlier than some of the anticipated benefits and the
return on these investments may be lower, or may develop more slowly, than our expectation. We may
fail to recover our capital expenditures or investments, in part or in full, if at all, or the recovery of these
capital expenditures or investments may take longer than we expected. As a result, the carrying value of
the related assets may be subject to an impairment charge, which may materially and adversely affect
our business, financial condition and results of operations.
In addition, our business operation also depends on the performance and reliability of the Internet
infrastructure in Mainland China. In the event of disruption, failures or other problems with the Internet
infrastructure, we may not have access to alternative networks. Failure or disruption in network would
interfere with the speed and availability of our communication-based solutions. In addition, we have no
control over the costs of the services provided by the telecommunications operators. If the prices that
we pay for telecommunications and Internet services rise significantly, our business, financial condition
and results of operations could be adversely affected.
Our operations may be disrupted by events beyond our control, including health epidemics,
infectious diseases, operational hazards or natural calamities and other outbreaks.
Our business could be affected by outbreaks of contagious diseases such as SARS, H5N1 avian
influenza, human swine flu and COVID-19, or another epidemic or outbreak.
The outbreak of such epidemics may affect us in various ways, such as resulting in delay or
interruption to our or our business partners’ business operation. In addition, government authorities may
adopt certain hygiene measures, including closures of our offices, travel and transportation restrictions,
and import and export restrictions. Additionally, we have also incurred additional costs as we
implemented mitigating actions to alleviate the impact of the pandemic, including offering
accommodation and food to our employees, disseminating personal protective equipment to our
employees, and other initiatives designed to protect our employees from the pandemic. Any of these
circumstances may materially slow regional or global economic development in areas where we operate
and may have a material and adverse effect on our business operations.
A public health emergency and its related movement restrictions may also cause supply chain
disruptions. If we fail to minimize the impact of supply chain disruptions when facing future health
epidemics, infectious diseases and other outbreaks, our suppliers’ ability to produce sufficient
quantities of our products on time will be affected, and we may not be able to fulfill consumer and
enterprise customer orders on time, which will negatively affect our business, reputation and financial
condition.
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We may not have adequate and successful arrangements for our operations to meet consumer and
enterprise customer demands in case of emergence of other health epidemics. If other health epidemics
emerge, we may experience additional disruptions that could materially and adversely impact our
business operations, financial condition and results of operations, including but not limited to:
• decreases in general consumer demands and/or consumer spending due to the rapid spread of
the health epidemics, which in turn will negatively affect our revenue and profitability;
• disruptions in our operation; and
• inability to implement our growth plans, including delays in marketing activities or adversely
impact our overall ability to successfully execute our plans to enter into new markets.
Furthermore, raw materials of our packaging products, as well as finished packaging products that
we store at our warehouses located in Mainland China are particularly vulnerable to fire risk. Products
that we produced and stored in warehouses located in Mainland China and overseas for deliveries are
also subject to fire risks. Any significant accident could interrupt our operations and result in legal and
regulatory liabilities. Our insurance coverage for accidents resulting from the proper or improper use of
such equipment may be inadequate to offset losses arising from claims related to accidents. Moreover,
any equipment in factories involved in an accident, malfunction or fire may be damaged or destroyed,
and we may need to devote time and resources to repair or restore it, thereby adversely impacting our
business, financial condition, results of operations and prospects. As a result, our operations may be
disrupted for reasons that are beyond our control, including public health emergency, or the outbreak of
any other infectious disease, natural disasters, industrial accidents, fires, arson, terrorist attacks,
technical failures and labor disputes.
Our operations may be affected by and subject to licensing and other requirements under laws
and regulations of various jurisdictions where we operate or sell products.
We operate in Mainland China and sell products to consumers located in countries and regions
including Japan, South Korea, Thailand and Saudi Arabia under our cross border social e-commerce
business. As we continue our global expansion, we will compete with companies who have an
established local footprint or are more familiar with the local regulatory and business practices, which
may give them a competitive advantage over us.
We are also subject to the laws and regulations of various jurisdictions. Multiple aspects of our
business will be adversely affected if we fail to ensure compliance with those laws and regulations,
mainly including licensing, regulation and standards in relation to the sale of our products, privacy laws
and regulations and import and export requirements. We may also experience increased costs and delays
in deliveries and other schedules as a result of the need to comply with applicable laws, regulations,
licenses and permits. In addition to the risk of costly and time-consuming regulatory compliance, we
cannot assure you that we will obtain all approvals or required licenses and permits.
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Furthermore, there is no assurance that our internal control policies will always be adequate and/or
effective. Any failure of compliance may result in enforcement actions thereunder, including orders
issued by regulatory or judicial authorities causing operations to cease, and may include corrective
measure requiring capital expenditures or remedial actions. We may be required to compensate those
suffering loss or damage by reason of our activities, and may have civil or criminal fines or penalties
imposed upon us for violation of applicable laws or regulations. Any change in laws and regulations or
policies affecting us or our operations, or their interpretation, could materially and adversely affect our
operations or increase our compliance expenses, which could, in turn, materially and adversely affect
our business adversely, for which could be costly and time-consuming.
In addition, any trade restrictions such as sanctions, anti-dumping duties, tariffs or quota fees
imposed by the countries to which our products are exported, or a trade war involving our products
could significantly increase the prices of our products, escalate our compliance costs or even restrict the
sale of our products in such countries and eventually harm our sales.
For instance, on May 17, 2024, the United States Department of Commerce announced its final
affirmative determination (the “ Final Determination”) in the antidumping investigations of certain
paper shopping bags (the “ Relevant Paper Shopping Bags ”) from Mainland China. According to the
Final Determination, the Relevant Paper Shopping Bags are subject to suspension of liquidation, which
the U.S. Customs and Border Protection requires a cash deposit for the Relevant Paper Shopping Bags
entering into the United States, starting from 90 days before the date on which the suspension of
liquidation was first ordered. As a result, the Relevant Paper Shopping Bags sold in the United States
are subject to an anti-dumping cash deposit of approximately 62.07%, from October 2023. While the
anti-dumping duty regulation is applicable to our sales to the United States, our Directors consider that
such regulation does not exert material adverse impact on our paper packaging business as we did not
incur and do not expect to incur costs arising from the anti-dumping duty from the sales of paper bags in
the United States as we adopt a free on board shipping model for our paper packaging business, which
according to the International Commercial Terms published by the International Chamber of Commerce,
the buyers are responsible for importing duties and customs, such as anti-dumping duties and cash
deposit arising therefrom, we did not incur any cash deposit arising from sales of the Relevant Paper
Shopping Bags to the United States payable according to the Final Determination. In addition, we
cannot assure you that we will not be subject to stricter anti-dumping restrictions in the future and if we
are subject to any other anti-dumping allegation or investigation, we may need to incur extensive legal
costs and divert the effort of our management in defending against such allegation or investigation, and
the sales of our products in the relevant country may be adversely affected if we do not succeed in these
proceedings. During the Track Record Period, to the best of our knowledge after due and careful
inquiry, we had not made sales to overseas consumers that would violate sanction related laws or
regulations. However, sanctions laws and regulations are constantly evolving, and new persons and
entities are regularly added to the list of persons subject to sanction lists maintained by different
countries. Further, new requirements or restrictions could come into effect which might increase the
scrutiny on our business or result in one or more of our business activities being deemed to have
violated sanctions. We can provide no assurance that our future business will be free of any sanctions
risks or our business will conform to the expectations and requirements of the authorities of the
jurisdictions that maintain sanction programs. Our business and reputation could be adversely affected
if the authorities of the such jurisdictions were to determine that any of our future activities constitutes
a violation of the sanctions they impose or provides a basis for a sanction designation of our Group.
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The theft, loss, or misuse of personal information or other data, could increase our expenses,
damage our reputation, or result in legal or regulatory proceedings.
During the operation of our cross-border social e-commerce business, the personal information
collected by us is mainly the mailing address, email, telephone number and name of the recipients used
by our overseas consumers. We face multiple risks in the handling and securing of these data, including:
(i) techniques used to gain unauthorized access to data and systems, disable or degrade service or
sabotage systems are constantly evolving, and we may be unable to anticipate, deter or prevent such
techniques or otherwise implement adequate preventive measures to avoid unauthorized access to data
collected by us; and (ii) our service may be vulnerable to cybersecurity breaches and attacks, which
could lead to system interruptions, delays or shutdowns and cause the loss or leakage to our overseas
consumers’ data.
We are subject to laws and regulations of the PRC and other countries and regions relating to the
collection, use, retention, security and transfer of personal information with respect to our customers
employees and business partners. For example, the Personal Information Protection Law (ڭࢹڦ
) provides detailed provisions for the protection and processing of personal information in the
PRC. These laws may vary from jurisdiction to jurisdiction.
In particular, in recent years, privacy and data protection have become increasing regulatory
focuses of government authorities across the world. The PRC government has enacted a series of laws,
regulations and governmental policies for the protection of personal data, cybersecurity and data
security in the past few years. On December 28, 2021, the Cyberspace Administration of China (the
“CAC”) adopted the updated Cybersecurity Review Measures (), which came into
effect on February 15, 2022. The Cybersecurity Review Measures stipulates the mandatory requirement
of cybersecurity review for companies which hold more than one million users’ personal information
when applying for an overseas listing. See “Regulatory Overview – PRC Laws and Regulations –
Regulations on Internet Security” and “Regulatory Overview – PRC Laws and Regulations –
Regulations on Privacy Protection” for details. Our PRC Data Legal Advisor is of the view that the
Cybersecurity Review Measures have not had and will not have any material adverse impact on us as
further detailed in “Business – Data Compliance and Data Security – Data Compliance.” We cannot
assure you that we will not be subject to the cybersecurity review in the future if we are imposed of any
compliance requirements by any new laws, regulations, or rules.
In addition, on September 24, 2024, the State Council published the Regulations on the
Administration of Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Network Data Security
Regulations ”), which came into effect on January 1, 2025. The Network Data Security Regulations
provide detailed implementing rules that cover personal information, data security, network security,
and other aspects, largely following the paths set by the existing laws such as the Cybersecurity Law,
the Data Security Law, and the Personal Information Protection Law. However, as the Network Data
Security Regulations only came into effect in early 2025, we cannot assure you that our business
operation will continue to be considered to be in full compliance with relevant rules and regulations.
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In addition, new legal and regulatory developments may affect how we design our IT systems and
how we operate our business. For example, on July 10, 2023, the CAC, consented by NDRC, Ministry of
Education, Ministry of Science and Technology, MIIT, Ministry of Public Security, National Radio and
Television Administration, promulgated the Provisional Administrative Measures for Generative
Artificial Intelligence Services (ج“() AIGC Services Measures ”),
effective on August 15, 2023. The AIGC Services Measures impose compliance requirements for
providers of generative AI services to the general public within the territory of the PRC. The Generative
Artificial Intelligence Services Measures provide, among other things, that the provider of generative AI
services of text, image, audio or video to the general public shall (i) assume the responsibilities as the
producers of the AI-generated content thereon, and (ii) any provider of generative artificial intelligence
services with attribute of public opinions or capable of social mobilization shall conduct security
assessment in accordance with the relevant regulations, and complete the formalities for algorithm
filing, change or deregistration in accordance with Provisions on the Administration of
Algorithm-generated Recommendations for Internet Information Services (પᑥ၍
֛However, the AIGC Services Measures do not state what constitutes “general public”.
Although we do not provide any AIGC products, technologies or services to users within the PRC, as
AIGC is a relatively novel technology, we cannot assure you that our use of AIGC technologies will not
be subject to any new regulations in the future. During our business operation, we only provide our
employees in Mainland China with tools and products utilizing AIGC technologies and services for the
purposes of generating advertisement copywriting, translation, image content design, video generation
and providing customer services. Our Directors believe that, based on the view of our PRC Data Legal
Advisor and since we strictly limit our application of AIGC products and technologies to internal usage
and do not provide any AIGC products, technologies, or services to users within the territory of
Mainland China, the AIGC Service Measures are not applicable to our Company. In addition, since we
strictly limit our application of AIGC products and technologies to internal usage only, without offering
any Internet-based information services utilizing AIGC technologies to users within the territory of the
PRC, our PRC Data Legal Advisor is of the view that our Company is not required to file for record our
algorithms with the CAC. In addition, we cannot assure you that the contents generated by our AIGC
technologies will not be deemed as identical or similar to pre-existing works and hence, subject us to
lawsuits for infringement on intellectual property rights.
We have adopted internal policies, procedures and guidelines for the protection of personal
information of our customers, and to ensure our compliance with relevant laws and regulations with
respect to personal information protection. Nevertheless, the efforts that we take to protect our
customers’ personal information may not always be sufficient or effective. Any non-compliance with the
relevant cybersecurity, data security or personal information protection relating laws and regulations,
may result in administrative penalties, including fines, a shut-down of our business, suspension of our
solutions and services and revocation of requisite licenses, as well as reputational damage or legal
proceedings or actions against us, which may result in material adverse effects on our business,
financial condition or results of operations.
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We may be exposed to risks relating to ESG issues.
Our business and operational activities, such as production and sales of packaging products,
storage of raw materials, transportation and exportation of packaging products and certain other
activities, are affected by laws and regulations, especially the extensive environmental, health and
safety laws and regulations and stringent standards which are promulgated by the PRC government. We
are required to obtain and maintain relevant environmental, health and safety related licenses and
certificates for production and sales of packaging products. To comply with the extensive environmental
laws and regulations relating to air, water and soil quality, waste management and public health and
safety in Mainland China, we must prepare environmental impact assessment reports and obtain
discharge permits, filings and the relevant approvals for production facilities in operation. In Mainland
China, we must also pass both periodic and unscheduled inspections of our production facilities by
relevant authorities to ensure the safety of our equipment and facilities. If we fail to obtain such
environmental approvals, filings or pass the inspections, the relevant authorities may suspend
production at our production facilities and may impose a fine on us. In addition, in recent years, there
have been growing concerns from the PRC government on ESG issues, and our manufacturing process
of packaging products are subject to various environmental protection laws and regulation, such as the
Law of the PRC on Prevention and Control of Atmospheric Pollution (ط
), the Law of the PRC on Prevention and Control of Water Pollution (ط
) and the Law of the PRC on Prevention and Control of Noise Pollution (ݑ
) which govern the emission, discharge, release and disposal of environmental wastes and other
pollutants during our manufacturing process. In the event that we fail to comply with applicable laws
and regulations or fail to maintain, renew or obtain the necessary licenses or certificates, our
qualification to conduct our various businesses may be adversely affected, which may adversely affect
our business, financial condition and results of operations.
Furthermore, there are growing social concerns from the general public, third-party social media
platforms and government authorities on ESG issues relating to the sale of apparel and footwear
products, such as encouraging the recycling of clothing and packaging materials, boycotting the use of
certain raw materials that may involve the deployment of cheap workforce in certain countries, reducing
the waste of clothing and packaging materials and reducing the greenhouse gas emissions caused by sea,
air or land transportation during the delivery by logistics service providers. Extreme weather conditions
have also raised concerns on environmental protection and social responsibilities of enterprises
engaging in the sale of apparel and footwear products. We have also noticed the recent negative news on
the ESG issues relating to social media platforms, such as Meta, which pointed out the relatively high
greenhouse gas emissions, hazardous waste emissions and waste of materials during the manufacturing,
packaging and delivery of the products sold through such platforms. Government authorities in our
overseas markets, including Asia, has promulgated policies on encouraging the recycling of apparel
products and relevant apparel materials, packaging and wrapping materials, to reduce hazardous
substance discharge. It is foreseeable that increasingly tightening legislation and regulations aiming at
reducing the waste of materials and greenhouse gas emissions may have potential impact on our
operations directly or indirectly, as a result of compliance requirement on our suppliers or our logistics
service suppliers, and may subject us to additional costs and restrictions, which could adversely impact
our financial condition and results of operations. Any implementation of such laws and regulations may
also distract the attention of our management and increase our compliance costs. See “Business –
Environmental, Social and Corporate Governance – Environmental Management”.
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The prices of key raw materials and the selling prices of our products may impact our business.
The business operations of our paper packaging business are affected by the prices of our key raw
materials for our packaging products. Our packaging operations depend on our ability to consistently
obtain sufficient quantities of key raw materials at acceptable prices and quality levels from our
suppliers in a timely manner. Raw paper, including black liner board, white liner board, and food grade
cardboard are the most important raw materials in the production chain of our paper packaging business.
For each year of the Track Record Period, raw material costs associated with our paper packaging
business represented approximately 77.9%, 77.9% and 76.1%, respectively, of our total cost of sales of
our paper packaging business.
As the purchase of raw paper comprises a substantial portion of our total purchase for our paper
packaging business, any increase in the cost of raw paper may have a negative impact on our results of
operations and prospects. In addition, the prices of these key raw materials are affected from time to
time by a number of factors, including general economic conditions, market demand and supply
situation, and may fluctuate beyond our expectation and control from time to time. We may not be able
to pass on any increase in key material costs to our enterprise customers immediately or at all. If we fail
to pass on such increase in key raw material costs to our enterprise customers, our profitability may be
affected.
Furthermore, we do not deploy any financial instrument to hedge the price risks of key raw
materials. As such, there is no guarantee that we are able to procure sufficient key raw materials at
competitive price. In the event that the prices of these key raw materials fluctuate under abnormal
conditions and/or there is a shortage in supply, it may result in disruption to our production schedule
and could have a negative impact on our profitability.
We face risks as a result of our acceptance of various payment methods for consumers who make
purchase with us.
Our cross-border social e-commerce consumers typically have the option to either pay by (1) cash
on delivery to logistics companies, and (2) online payment through third-party payment platforms.
During the Track Record Period, the revenue generated from cash on delivery amounted to RMB2,152.5
million in 2022, RMB2,336.6 million in 2023 and RMB1,797.1 million in 2024, representing 69.3%,
54.9% and 53.4% of the revenue from our cross-border social e-commerce business, respectively. The
revenue generated from online payment amounted to RMB954.1 million in 2022, RMB1,920.0 million
in 2023 and RMB1,568.8 million in 2024, representing 30.7%, 45.1% and 46.6% of the revenue from
our cross-border social e-commerce business, respectively. Payment service providers help us handle
electronic payment processing, ensuring that our consumers can make purchases seamlessly while
adhering to the highest standards of security. For some payment methods, we could be charged
interchange and other administrative fees, which might increase over time, which in turn, increase our
operational costs, and reduce our profit margins. With regard to the various payment options we
provide, notably online payments and cash on delivery options, we may potentially be the target of
fraud and other unlawful activities. Our operations could be disrupted, and our reputation could be
severely harmed, if the social media platforms or logistics service providers fail to transfer the money
they have collected to us promptly or at all, or if they fail to provide these services to us for any reason.
We are also subject to various rules, regulations and requirements governing electronic funds transfers,
which could change or be reinterpreted to make it difficult or impossible for us to comply with. If we
fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees
and lose our ability to accept credit and debit card payments from our consumers, process electronic
funds transfers or facilitate other types of online payments, and our business, financial condition and
results of operations could be adversely affected.
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We face further risks associated with our cash on delivery payment option. Under such option,
logistics services providers help us collect payment on our behalf upon delivery of our products. If our
consumers refuse to accept the delivery of our products or ask for the product to be returned, they may
refuse to pay for the product. In this case, we would incur transportation costs with our logistics service
provider for the delivery as well as the product return, without collecting the purchase price for the
product. In addition, although we require third party logistics services providers to implement a number
of internal control policies to prevent cash misappropriation and embezzlement with respect to orders
that are settled through cash, we may be unable to prevent, detect or deter all instances of misconduct.
Any misconduct committed against our interests, which may include past acts that have gone undetected
or future acts, could subject us to financial losses, harm our reputation and may have a material adverse
effect on our business and results of operations.
We depend on certain major suppliers.
During the Track Record Period, our major suppliers include product suppliers, marketing services
providers, social media platforms, logistics companies and payment service suppliers. We rely on a
limited number of suppliers for a large portion of our total purchases. For each year of the Track Record
Period, our total purchase from our top five suppliers accounted for approximately 34.6%, 39.6% and
38.1% of our total purchase. We usually entered into short term contracts with our suppliers. If, for
whatever reasons, any of our major suppliers cannot supply us with a sufficient amount of key raw
materials at prices acceptable to us, our total cost of purchase may increase or we may face a shortage
of the key raw materials for our production. Similarly, if, for whatever reasons, they cannot supply us
with the services that support our operations, our ability to operate our cross-border social e-commerce
business may be impaired. In any of these events, our results could be adversely affected. The
operations of our suppliers might be subject to business interruptions due to natural disasters, infectious
diseases or other catastrophic events which may or may not be foreseeable or otherwise within their
control. If we fail to timely replace our suppliers, the occurrence of any such business interruptions
could cause material shortages or delays in the supply of products by our suppliers.
In addition, we may not be able to identify sufficient numbers of suitable suppliers when we
experience significant increases in demand for our products. If we are unable to retain our current major
suppliers or contract new suppliers at terms acceptable to us in a timely manner, our business, financial
condition and results of operations could be materially and adversely affected.
We have a concentration of enterprise customers for our paper packaging business during the
Track Record Period, and we do not enter into long-term sales framework agreements with our
major enterprise customers. The loss of any one of our five largest customers under such business
for respective periods during the Track Record Period could affect our revenue and have a
material adverse effect on our business, financial condition and results of operations.
We have a concentration of customers for our paper packaging business during the Track Record
Period. For each year of the Track Record Period, sales to our top five customers amounted to
approximately RMB1,545.0 million, RMB1,623.7 million and RMB1,501.5 million, respectively,
representing approximately 28.7%, 24.3% and 27.2% of our total revenue, of which, Customer Group A
(See “Business – Our Customers – Major Customers”), being our largest customer for each year of the
Track Record Period, accounted for approximately 23.8%, 18.6% and 18.8% of our total revenue.
Therefore, if our major enterprise customers reduce their purchase orders with us and we cannot solicit
a similar amount of purchase orders from other enterprise customers on time, our business, financial
condition and results of operation may be adversely affected.
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Enterprise customers of our paper packaging business generally enter into a one-year framework
sales agreements with us and place orders with us for each time of purchase, rather than into long-term
sales agreements with us as the selling price of our packaging products may change along with the price
of our key raw materials. As we generally do not have any long-term sales agreement with our major
enterprise customers during the Track Record Period, and they are not bound by any exclusivity terms
or arrangements with us, there is no guarantee that we will be able to obtain recurring orders from such
customers in a timely manner. Accordingly, we do not have contractual assurances as to our future sales.
We cannot assure you that our major enterprise customers will continue to place purchase orders with us
at the existing volume or pricing level or at all. As such, should there be any adverse development
related to our major enterprise customers’ operations or any other reasons resulting in any deterioration
or termination of our business relationship with one or more of our major enterprise customers, our
business, financial condition, operating results and prospects could be materially and adversely
affected. If we are unable to use our competitive strengths, marketing expertise and product
development capabilities to respond quickly and effectively to the market trends, our profitability and
sales volume may be negatively affected. To the extent we provide agreement terms that are more
favorable to our major enterprise customers, our profitability may be reduced. The loss of a major
enterprise customer, or a material reduction in sales to a major enterprise customer, could materially
and adversely affect our product sales, financial condition, results of operations and prospects.
Failure to maintain optimal inventory level could affect on our business, financial condition,
results of operations and prospects.
Optimal inventory level is important to the success of our business. We manage our supply chain
for our cross-border social e-commerce business through maintaining a certain level of inventory for
specific products and purchasing products from suppliers after we receive orders from our customers if
the ordered products are out of stock. We achieve effective inventory management through this “rolling
inventory” model, allowing us to maintain a lower inventory to sales ratio than the industry average,
according to CIC. For each year of the Track Record Period, for our cross-border social e-commerce
business, our inventory to sales ratio ranges between 3.2% to 4.0%. For our paper packaging business,
we control our inventory level by (i) keeping track of the inventory movements on a real-time basis; and
(ii) monthly procurement plans from enterprise customers. For each year of the Track Record Period,
our inventory turnover days for our paper packaging business were 58.7 days, 57.4 days and 54.5 days,
respectively. Our inventory level is susceptible to various factors which are beyond our control,
including, changing fashion trends, consumer needs and market demand, seasonality, and unexpected
weather changes. In addition, if we underestimate demand for our products, we may experience
inventory shortages which may, in turn, result in unfulfilled enterprise customer demands, leading to a
negative impact on enterprise customer experiences and our reputation.
If we fail to accurately anticipate consumer needs, there may be obsolete products in our
inventories, which in turn may result in impairment of inventories. As of December 31, 2022, 2023 and
2024, we recorded impairment of inventories of RMB8.5 million, RMB19.5 million and RMB9.5
million, respectively, recognized in cost of sales. For further details, see “Financial Information –
Selected Items from the Consolidated Balance Sheets – Inventories”. There can be no assurance that we
will be able to maintain optimal inventory level, and any such failure may affect our business, financial
condition, results of operations and prospects.
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If we are not able to manage our expansion successfully, our growth potential, results of
operations and business could be materially and adversely affected.
We intend to further expand our cross-border social e-commerce business in the future through
acquisitions of brands that have achieved a leading position in certain categories on leading e-commerce
platforms, distinctive brand recognition, an existing well-established supply chain and a high customer
repurchasing rate. See “Business – Our Strategies”. The implementation of our expansion plan will
incur additional costs and expenses and put pressure on our managerial, financial, operational and other
resources. See “Future Plans and Use of Proceeds”. We cannot assure you that we will be able to
implement in accordance with our expansion plan, or to recruit qualified staff to support our expansion
plan. If we are unable to manage our expansion, or to effectively control expansion-related expenses,
our business, prospects, financial condition and results of operations could be materially and adversely
affected. In addition, investments and acquisitions transactions involve significant challenges and risks,
including:
• difficulties integrating the personnel, operations, products or services into our operations;
• robustness of technology, internal controls and financial reporting of the companies we
acquire;
• disrupting our ongoing business, distracting our management and employees and increasing
our expenses;
• for investments over which we do not obtain management and operational control, we may
lack influence over the controlling partner or shareholder, which may prevent us from
achieving our strategic goals in such investment;
• new regulatory requirements and compliance risks that we become subject to as a result of
acquisitions in new industries or otherwise;
• actual or alleged misconduct or non-compliance by any company we acquire or invest in (or
by its affiliates) that occurred prior to our acquisition or investment, which may lead to
negative publicity, government inquiry or investigations against such company or against us;
• unforeseen or hidden liabilities or costs that may adversely affect us following our
acquisition of such targets;
• regulations including the anti-monopoly and competition laws, rules and regulations of the
PRC and other countries in connection with any proposed investments and acquisitions;
• the risk that any of our pending or other future proposed acquisitions does not close;
• the costs of identifying and consummating investments and acquisitions;
• the use of substantial amounts of cash and potentially dilutive issuances of equity securities;
• significant reduction of the value of our investments at fair value through profit or loss; and
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• challenges in achieving the expected benefits of synergies and growth opportunities in
connection with these acquisitions and investments.
Any such factors described above could disrupt our business development strategies.
We may be subject to risks associated with our transfer pricing arrangement.
During the Track Record Period, our cross-border social e-commerce business involved inter-company
arrangements. See “Financial Information – Transfer Pricing Arrangement”. While our transfer pricing
advisor concluded that our transfer pricing arrangements were consistent with the arm’s length principle from
the perspective of PRC and Hong Kong SAR’s transfer pricing regulations during the Track Record Period,
there were uncertainties associated with the profit allocation and the tax position in respect of the intra-group
transaction arrangements. There is no assurance that the tax authorities will not subsequently challenge the
appropriateness of our transfer pricing arrangement. If any competent tax authority in the PRC or Hong Kong
SAR later consider that our transfer pricing arrangements do not comply with the relevant transfer pricing
laws and regulations, we may face adverse tax consequences including additional taxes, interests or penalties,
which may result in a higher overall tax liability for us and may adversely affect our business, financial
condition and operating result.
We may be subject to tax exposure in various jurisdictions.
Our cross-border social e-commerce business is primarily focused on the sale of a distinctive
portfolio of Chinese products carefully selected for consumers in a number of countries and regions,
such as Japan, South Korea, Thailand and Saudi Arabia. As global and local policies (including laws,
regulations and rules) concerning online sales continue to evolve, we may be subject to potential direct
and/or indirect tax that we are required to collect and remit in the jurisdictions where our consumers are
located.
Tax policies applicable in various countries and regions are constantly evolving, particularly with
respect to cross-border transactions. Inherent uncertainties exist with respect to the interpretation and
implementation of tax policies in places where we sell our products, and how these tax policies are
interpreted and implemented may impact our business, financial condition and performance. Tax
authorities are increasingly scrutinizing the allocation of income between transactional parties.
Depending on various circumstances, we may be deemed doing business in places where we sell our
products and be subject to direct tax in such jurisdictions.
In addition, it has become increasingly common for tax and customs authorities to impose various
taxes (e.g. indirect tax), collection and payment obligations on overseas sellers which do not have
physical presence in the importing jurisdictions over time. There is no assurance that we will not be
subject to indirect tax exposure, penalties or fines imposed by the relevant government authorities as a
result of the potential non-compliance behaviors which have not been reviewed by our tax consultants,
or any other non-compliance behaviors which may arise due to the lack of familiarity with the evolving
tax and customs policies in the future. Under the transactional arrangements of our cross-border social
e-commerce business, the local agencies of the logistic service providers or the local consumers take on
the role of Importer of Record upon importation to the jurisdictions involved and the local agencies are
responsible for filing the import declaration as well as settling the applicable import taxes. We cannot
assure you that we will be fully compliant with the relevant tax and customs policies should any of those
third parties fail to perform their obligations. Failure to fully comply with tax and customs policies in
the importing jurisdictions would subject us to certain tax exposure and penalties or liabilities which
may have a material adverse effect on our business, performance and financial condition.
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We have communicated with third-party professional tax consultants and legal counsels with
respect to overseas tax and customs to ensure compliance with applicable laws and regulations. As
advised by our Tax Advisor, (i) in terms of direct tax, the possibility for us to be subject to overseas
direct tax laws and regulations is generally low considering the Group’s activities and existence in the
overseas jurisdictions where we sell products under our cross-border social e-commerce business and
relevant applicable tax laws and treaties, and (ii) in terms of indirect tax, the risk for relevant customs
authorities to impose tax liabilities or penalties on us is generally low based on our transaction
arrangements as well as relevant applicable customs laws and regulations of the overseas jurisdictions
where we sell products under our cross-border social e-commerce business. Due to the facts that the tax
and customs environment is different in different countries or regions and that the tax policies regarding
various indirect and direct taxes are complex, our overseas operations may expose us to the risks
associated with the overseas tax and customs policy changes. We may need to make corresponding
judgments to deal with the uncertainties with respect to the tax treatment of certain operating activities.
For example, in certain jurisdictions in which we sell our products, there is uncertainty in the
interpretation of local policies and jurisprudence as to whether an e-commerce seller could be subject to
corporate income tax or indirect tax even it does not have physical presence in the relevant jurisdiction.
Furthermore, changes in overseas tax and customs policies may be applicable to us could adversely
affect our business, financial condition and performance.
Our sales are subject to seasonality, which could cause our results of operations and financial
condition to fluctuate.
For our cross-border social e-commerce business, we typically carry out more sales and marketing
activities before and during overseas holiday seasons. As a result, we may maintain higher revenue and
have higher level of inventories for our cross-border social e-commerce business to satisfy market
demand before and during holiday seasons and relevant shopping events than at other times in the year.
On the other hand, our businesses are vulnerable to extreme or unusual weather conditions. For
example, the extended period of warm weather during the winter season could render a portion of our
apparel products incompatible with such unseasonable conditions, and thus may affect our sales and
inventories.
For our paper packaging business, we typically see greater demand for packaging before and
during Chinese holiday seasons. We typically engage with our customers well in advance of holiday
seasons to design packaging tailored to holiday seasons. As a result, we sometimes achieve higher
revenue and have higher level of inventories for our paper packaging business to satisfy market demand
before and during holiday seasons. We may be exposed to risks associated with such seasonal factors
and the fluctuation of demand of our products. Should there be any adverse change of market conditions
during the peak season, our profitability may be adversely affected.
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Changes in our preferential tax treatment may materially and adversely affect our business,
financial condition and results of operations.
During the Track Record Period, we and certain of our subsidiaries enjoyed preferential tax
treatment. The Company was qualified as High and New Technology Enterprises on October 21, 2020
(৷อҦஔΆุ )( “ HNTE ”) and was entitled to a preferential tax rate of 15% during the year ended
December 31, 2022. Certain of our PRC subsidiaries are accredited as HNTEs and were entitled to
preferential tax rate of 15% during the Track Record Period. Certain of our PRC subsidiaries benefited
from other preferential tax policies including the policies in Notice on Preferential Corporate Income
Tax Policies of Kashgar and Khorgos Special Economic Development Zones in Xinjiang, and policies
encouraging industries in Western Mainland China, and were entitled to a preferential corporate income
tax rate of 15% or were exempt from corporate income tax during the Track Record Period. For each
year of the Track Record Period, our effective income tax rate was 19.8%, 14.1% and 15.4%,
respectively. See Note 11 to the Accountant’s Report set out in Appendix IA to this Prospectus. There
can be no assurances that we would continue to enjoy these preferential tax treatments at historical
levels, or at all. Any change, suspension or discontinuation of these preferential tax treatment could
adversely affect our business, financial condition and results of operations.
We may not be able to maintain our profit margin in the future.
For each year of the Track Record Period, we achieved gross profit margin of approximately
59.1%, 63.1% and 60.5% for our cross-border social e-commerce business and 15.2%, 18.8% and 17.9%
for our paper packaging business, respectively. For the same periods, our net profit margin was
approximately 3.2%, 5.0% and 3.3%, respectively. As our profitability is dependent upon a number of
factors some of which are beyond our control, such as price of raw materials, advertising costs,
procurement costs, costs of logistics services, labor and other production costs, market competition, the
market demands and inflationary pressures. In particular, the profitability of our cross-border social
e-commerce business is sensitive to our advertising costs, while the profitability of our paper packaging
business is sensitive to raw material costs. We may not be able to pass on any increase in such costs to
our consumers and/or enterprise customers immediately or at all. If we fail to pass on such increase in
costs to our consumers and/or enterprise customers, our profitability may be adversely affected.
Therefore, there is no assurance that we will be able to maintain such gross profit margins or net
profit margins in the future as those in the Track Record Period. Any prices and costs fluctuation would
have a material adverse impact on our profit margin. Accordingly, our financial conditions may be
adversely affected.
We may not be able to collect all of our receivables, thus being exposed to credit risk and may
incur impairment losses on our receivables.
Our trade receivables primarily arise from (i) sales to enterprise customers of our packaging
business to whom we provide credit terms and (ii) sales of our cross-border social e-commerce business
where our payment service provider or logistics service provider has collected payment from the
consumer but have not settled with us. As of December 31, 2022, 2023 and 2024, our trade receivables,
net were RMB472.0 million, RMB479.1 million and RMB548.9 million, respectively. We seek to
maintain strict control over our outstanding receivables and have a credit control department to
minimize credit risk. Overdue balances are reviewed regularly by senior management and credit limits
attributed to enterprise customers are reviewed annually. We cannot assure you that we will be able to
collect our trade receivables in full, or at all, in the future, despite our efforts to conduct credit
assessment on them.
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As of December 31, 2022, 2023 and 2024, we recorded current prepayments, other receivables and
other assets of RMB199.9 million, RMB162.8 million and RMB141.9 million, respectively. During the
Track Record Period, we recorded impairment of deposits and other receivable from an acquiror of
equity interests from us (the “ Relevant Receivable ”) of RMB62.4 million, RMB17.8 million and nil for
each year of the Track Record Period, respectively. See “Financial Information – Key Components of
Our Consolidated Statement of Profit or Loss – Impairment Losses on Financial Assets.” If a significant
increase in credit risk of a receivable has occurred since initial recognition, then impairment is
measured as lifetime expected credit losses. The assessment of impairment losses involves a significant
degree of management judgments as well as estimates in determining the key assumptions. Therefore,
there is uncertainty on the prediction of the movement of impairment of receivables. Significant
impairment losses on receivables may have a material adverse effect on our financial condition and
results of operations.
We are uncertain about the recoverability of our deferred tax assets, which may adversely affect
our financial condition in the future.
We are required to make judgments, estimates and assumptions about the carrying amounts of our
deferred tax assets. As of December 31, 2022, 2023 and 2024, we had net deferred tax assets of
RMB13.5 million, RMB12.2 million and RMB11.1 million, respectively. See Note 32 in Appendix IA to
this Prospectus for details of the movements of our deferred tax assets during the Track Record Period.
Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the
extent that it is probable that taxable profit will be available against which the losses and deductible
temporary difference can be utilized. This requires judgment on the tax treatments of certain
transactions and assessment on the probability, timing and adequacy of future taxable profits available
for the deferred tax to be recovered. These judgment and assessment are mainly based on historical
experience and other relevant factors. As a result, actual results may differ from these accounting
estimates.
The realization of deferred tax assets depends primarily on our estimate of whether sufficient
future profits will be available. If sufficient future taxable profits are not expected to be generated or if
taxable profits are lower than expected, we may fail to recover our deferred tax assets, which may
materially and adversely affect our financial condition.
We are subject to risks in relation to IP infringement or misappropriation, which may have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our intellectual properties and trade secrets are important to our success and competitive position.
In addition to intellectual properties already registered in our name, we have applied for registration of
certain intellectual properties in Mainland China. Details of our intellectual property rights are set out
in Appendix VI to this Prospectus under the heading “Statutory and General Information – Further
Information About Our Business – 2. Intellectual Property Rights of the Group”. We cannot assure you
that such applications will be successful and should any of them be challenged, rejected or become
unsuccessful for any other reason, we may be unable to use such intellectual properties and it may be
difficult for us to establish any claim against any infringement of those intellectual properties.
Brand name of our brands, or names similar to our self-owned brands, may be registered or in use
by third parties in markets we may wish to enter. As a result, we may have to incur significant expenses
to acquire the right to use our brand names in such markets. If we are unable to do so, we may be
prevented from entering such markets or may only be able to do so using a different brand name.
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In addition, we may, from time to time, be involved in IP disputes where third parties claiming
infringement of our products to their IP rights. See “Business – Intellectual Property Rights”. We seek
to develop and implement new technologies and production processes in both our businesses to keep in
pace with the market development. In doing so, we may not be aware of other third-party intellectual
property rights, and accordingly, we may be unable to assess the scope and validity of those third-party
intellectual property rights. In addition, product development is inherently uncertain in a rapidly
evolving technology environment where there may be numerous patent applications pending, many of
which are confidential when filed with regard to similar technologies. There may also be uncertainty
regarding the rightful ownership of newly developed patents or technology. Accordingly, we may be
subject to lawsuits for infringement on intellectual property rights.
Therefore, from time to time, we may also be subject to litigation involving claims of patent
infringement or violation of other IP rights of third parties in our business operations. An adverse
determination in any such litigation or proceedings to which we may become a party could subject us to
significant liability to third parties, require us to seek licenses from third parties or redesign our
products, or subject us to injunctions prohibiting the development and sale of our products. Protracted
litigation could also result in consumers and/or enterprise customers or potential consumers and/or
enterprise customers deferring, reducing or canceling their purchases of our products. In addition, we
could face disruptions to our business operations as well as damage to our reputation as a result of such
claims, and our business, financial condition, results of operations and prospects could be materially
and adversely affected. We cannot assure you that such situations will not occur in the future. Our
potential loss could include, but are not limited to, loss of revenue, decline in market share and
reputational damage, which could have a material adverse effect on our business, results of operations
and financial condition.
Failure to fulfill our obligations in respect of contract liabilities could materially and adversely
affect our results of operation, liquidity and financial position.
Our contract liabilities represent advance payments from our customers where the products have
not been delivered to the customers. As of December 31, 2022, 2023 and 2024, we had contract
liabilities of approximately RMB12.9 million, RMB14.8 million and RMB17.9 million, respectively.
See “Financial Information – Selected Items from the Consolidated Balance Sheets – Contract
Liabilities”.
There is no assurance that we will be able to fulfill our obligations in respect of contract liabilities
as the completions of existing and future orders from our enterprise customers are subject to various
factors, including our raw material suppliers and logistics service suppliers, and normal operations of
our business. If we were not able to fulfill our obligations with respect to our contract liabilities, the
amount of contract liabilities will not be recognized as revenue, and we may have to return the advanced
payments made by our enterprise customers or provide alternative compensation for the deferred
revenue due to the enterprise customers. As a result, our results of operations, liquidity and financial
position may be materially and adversely affected.
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We recorded negative cash flows from investing activities and financing activities during the Track
Record Period, which may have an adverse effect on our business, financial condition, results of
operations and prospects.
For each year of the Track Record Period, we recorded net cash used in investing activities of
RMB183.6 million, RMB282.4 million and RMB337.1 million, respectively, primarily as attributable to
(i) purchase and withdrawal of deposits with original maturity of more than three months when
acquired, (ii) purchase of items of property, plant and equipment and (iii) purchase of financial assets at
fair value through profit or loss. For each year of the Track Record Period, we recorded net cash used in
financing activities of RMB32.0 million, RMB237.3 million and RMB394.6 million, respectively,
primarily due to (i) repayment of bank loans, (ii) dividends paid and (iii) repurchase of shares. For
further details, see “Financial Information – Liquidity and Capital Resources – Cash Flows”. Net
investing and financing cash outflows could impair our ability to make necessary capital expenditures
and constrain our flexibility as well as adversely affect our ability to meet our liquidity requirements.
While we believe we have sufficient working capital to fund our current operations, we may,
however, experience net cash outflows from our operating activities in the future. If we are unable to
maintain adequate working capital, we may default in our payment obligations and may not be able to
meet our capital expenditure requirements or pursue our growth strategies, which may have a material
adverse effect on our business, financial condition, results of operations and prospects.
Our use of open-source technology could impose limitations on our business operations.
We use open-source code and expect to continue to use open-source code in the future. Although
we monitor our use of open-source code to avoid our software being subject to conditions we do not
intend, we may face allegations from others alleging ownership of, or seeking to enforce the terms of,
an open-source license, including by demanding release of the open-source code, derivative works, or
our algorithms or models that was developed using such code. These allegations could also result in
litigation. The terms of many open-source licenses have not been interpreted by courts. There is a risk
that these licenses could be construed in a way that could impose unanticipated conditions or
restrictions on our ability to commercialize our software. In such an event, we may be required to seek
licenses from third parties to continue to commercially use our proprietary algorithms or models, and
continue to develop algorithms or models based on open-source code, which could adversely affect our
business and revenue.
As open-source code is subject to further development and modification by anyone, the use of
open-source code may subject us to risks of reducing accuracy of our AI models and increased
competition from competitors who also use open-source code as part of their operations.
We may be involved in legal or other proceedings arising from our business operations.
We are exposed to legal or other proceedings arising from our ordinary course of business,
including but not limited to disputes with various parties involved in our business operations, our
consumers and/or enterprise customers, raw material suppliers, digital marketing service providers,
social media platforms, logistics service providers and employees. These disputes may lead to legal,
arbitration or other proceedings, which may be both costly and time-consuming, and could significantly
divert the efforts and resources of our management and personnel.
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In addition, we may encounter compliance issues in the course of our business operations, which
may lead to administrative proceedings, and may materially and adversely affect our business, financial
condition and results of operations. We cannot assure you that we will not be involved in legal or other
proceedings in the future, any negative outcome of such proceedings may materially and adversely
affect our business, financial condition and results of operations.
If we fail to comply with applicable anti-corruption and anti-bribery laws, our reputation may be
harmed and we could be subject to penalties and significant expenses that have a material adverse
effect on our business, financial condition and results of operations.
We may be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic
sanctions, and similar laws and regulations in various jurisdictions in which we conduct activities. Our
Company, our officers, Directors, Supervisors, employees, and business partners acting on our behalf,
including agents, are prohibited from corruptly offering, promising, authorizing, or providing anything
of value to a “foreign official” for the purposes of influencing official decisions or obtaining or
retaining business or otherwise obtaining favorable treatment. We are also required to make and keep
books, records, and accounts that accurately reflect transactions and dispositions of assets and to
maintain a system of adequate internal accounting controls. A violation of these laws or regulations
would adversely affect our business, reputation, financial condition, and results of operations.
We cannot assure you that each of our employees is able to strictly follow our guidance on
compliance with anti-corruption and anti-bribery laws and regulations or, in situations not covered by
the guidance. Non-compliance with anti-corruption, anti-bribery by our employees, or even allegations
of non-compliance, could subject us to whistleblower complaints, adverse media coverage,
investigations, and severe administrative, civil and criminal sanctions, collateral consequences,
remedial measures, and legal expenses, all of which could materially and adversely affect our business,
reputation, financial condition, and results of operations.
We may require additional funding to finance our operations, which may not be available to us on
favorable terms, or at all, to meet our funding requirements.
We currently fund our operations principally through cash flow generated from operations and
borrowings. As of December 31, 2022, 2023 and 2024, we had interest-bearing bank borrowings of
RMB312.2 million, RMB258.6 million, and RMB248.2 million, respectively. We may need to obtain
adequate external debt financing and equity fund raising from external sources to supplement our
internal sources of liquidity in the future in order to finance our ongoing operations, improvement of
our supply chain management capabilities, investment in research and development, current and future
capital expenditure requirements, other investment plans, and funding requirements.
Our ability to obtain external financing in the future is subject to a variety of uncertainties,
including, among other things regulatory approvals to obtain financing in the domestic or international
markets, our financial condition, results of operations, cash flows and credit history, the condition of the
global and domestic financial markets and changes in the monetary and fiscal policies in Mainland
China, with resulting effects on bank interest rates and lending practices and conditions.
RISK FACTORS
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In addition, under the terms of one of our loan agreements, we are required to comply with a
financial covenant that requires our liabilities-to-assets ratio not higher than 70%. As of the Latest
Practicable Date, we were in compliance with covenants under such credit agreement. See “Financial
Information – Indebtedness – Borrowings”. Financing may not be available in a timely manner or in
amounts or on terms acceptable to us, or at all. A large amount of bank borrowings and other debt may
result in a significant increase in interest expenses while at the same time exposing us to increased
interest rate risks and may also affect our ability to fund our operations and planned developments. If
we are required to raise equity financing, this could result in dilution to our Shareholders, and the
securities issued in future financings may have rights, preferences and privileges that are senior to those
of our Shares. Any failure to raise additional funds on favorable terms or in a timely manner or at all
could severely restrict our liquidity and have a material adverse effect on our business, financial
condition and results of operations.
Failure to make adequate contributions to various employee benefit plans as required by PRC
regulations may subject us to penalties.
PRC laws and regulations require us to participate in various government sponsored employee
benefit plans. These benefit plans include social insurance, housing provident fund and other
welfare-oriented payment obligations. According to applicable PRC laws and regulations, employers
must open social insurance registration accounts and housing provident fund accounts and pay social
insurance premiums and housing provident fund contributions for employees. PRC laws require that we
contribute to the plans in amounts equal to certain percentages of salaries, including bonus and
allowances, of our employees up to the maximum amounts specified by the local government at
locations where we operate our business. Local governments across Mainland China do not have
consistent requirements regarding the implementation of employee benefit plans. In addition, according
to the Urgent Notice of the General Office of the Ministry of Human Resources and Social Security on
Implementing the Spirit of the Executive Meeting of the State Council in Stabilizing the Collection of
Social Security Contributions (஫࿏ໝྼ਷ਕ৫੬ਕึᙄၚग़ʲྼ
ٝpromulgated on September 21, 2018, all local authorities
responsible for the collection of social insurance are strictly forbidden to conduct self-collection of
historical unpaid social insurance contributions from enterprises.
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During the Track Record Period, certain PRC operating entities in our Group did not make full
contribution to the social insurance and housing provident funds for our employees. For each year of the
Track Record Period, the estimated shortfall amount of social insurance was RMB7.3 million, RMB9.7
million and RMB6.4 million, respectively, and the estimated shortfall of housing provident was RMB0.7
million, RMB1.4 million and RMB1.3 million, respectively. According to applicable PRC laws and
regulations and as advised by our PRC Legal Advisor, if we fail to make full contribution of social
insurance within the prescribed period, we may be required by relevant regulatory authorities to make
up the outstanding amount prior to a stipulated deadline and we may be liable for the additional late
payment penalty at the daily rate of 0.05% of the shortfalls. Moreover, we may be liable to a fine of one
to three times of the outstanding contribution amount in the event that we fail to make such payments in
time. In addition, for outstanding housing provident fund contributions that we did not fully pay within
the prescribed period, the relevant government authorities may demand that we pay the outstanding
housing provident fund contributions by a stipulated deadline. We may also be required by the relevant
PRC courts for compulsory enforcement if we fail to rectify by that deadline. As advised by our PRC
Legal Advisor, based on relevant laws and regulations, the likelihood that the relevant social insurance
and housing provident fund authorities would take initiative to recover the historically unpaid social
insurance and housing provident fund from us and/or impose the administrative penalties on us due to
our failure to make full payment of the social insurance and housing provident fund is remote, on the
basis that (1) we have not received any notifications from the relevant authorities requiring us to pay the
shortfalls; and (2) we had not been subject to any administrative penalties relating to inadequate
contributions of our current and former employees. We would make full payment within the stipulated
deadline as required by relevant authorities once we received the notifications from the relevant
authorities requiring us to pay the shortfalls. As a result, we did not make any provisions in connection
with the contribution of social insurance and housing fund during the Track Record Period and up to the
Latest Practicable Date.
Although we had not been subject to any administrative penalties in connection with our
contribution of social insurance plans and housing provident fund during the Track Record Period, there
is no assurance that our historical and current practice with respect to the contribution of social
insurance plans and housing provident fund will at all times be deemed in full compliance with relevant
PRC laws and regulations by PRC government authorities. In the event of any such non- compliance, we
may be required to pay any shortfall in social insurance and housing provident fund contributions within
a prescribed time period and to pay penalties if we fail to do so.
However, if we are still required to make additional payments in relation to such social insurance
and housing provident funds contributions, our operating expenses will increase, which could
consequently adversely affect our financial condition and results of operations.
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We may be adversely affected by any significant disruption to the warehouses where we store our
products.
We primarily store our products in leased and self-owned warehouses in Mainland China and in
warehouses operated by our logistic service providers overseas. As of the Latest Practicable Date, for
our cross-border social e-commerce business, we leased two warehouses located in Mainland China; for
our paper packaging business, we had warehouses that were proximate to each of our production
facilities and additionally, we also leased one warehouse in Mainland China as a transition center to
store our paper packaging products for certain of our major customers. See “Business – Our Business
Model” for details of our warehouses. Any significant downtime arising from major and unexpected
repairs or servicing of any of these warehouses that results in major disruptions to our operations could
cause us to be unable to store our products for an extended period and require us to make significant
unanticipated capital expenditures and/or delay our delivery of products. If any one or more of the
above risks were to materialize, our financial condition and results of operations may be adversely
affected. The warehouses where we store products are also subject to a number of risks, such as fires,
floods, explosions, natural disasters, third-party interference, disruptions in the power supply or power
outages, war, terrorism and communal unrest, which could lead to a significant disruption to our
operations or result in significant damages to our warehouses or inventories. These hazards could also
result in personal injury or wrongful death claims and other damage to our warehouses. These
disruptions may materially and adversely affect our business, financial condition and results of
operations.
We may incur losses resulting from product liability claims or product recalls.
We are subject to product liability claims with respect to products sold by us. Such claims may
arise if any such products are deemed or proven to be unsafe, defective or contaminated or unintentional
distribution of counterfeits.
If any products sold by us are alleged to be unsafe, defective or contaminated, we may experience
reduced sale of the relevant products and may have to recall them from the market. For instance, during
the Track Record Period, in line with our wide-array product strategy, we sold various products,
including healthcare products in our cross-border social e-commerce business. For each year of the
Track Record Period, our revenue generated from sales of healthcare products accounted for 5.6%, 7.1%
and 10.0%, respectively, of the total revenue of our cross-border social e-commerce business. However,
as the healthcare industry has been subject to widespread attention that coupled with continuous
technology advancements in the scientific research, future academic conclusions, results, reports or
publications may cast doubt on the quality, efficiency and safety of healthcare products, which may in
turn damage the reputation of the healthcare products we sold as well as the healthcare industry in
general. In addition, any regulatory changes outside of Mainland China that adversely affect the sale of
healthcare products may pose heavier compliance burden and material and adverse effect on our
business and operations.
We cannot guarantee that product recalls will not occur or product liability claims will not be filed
against us in the future. A substantial claim or a substantial number of claims against us, if successful,
would have a material adverse effect on our reputation, business, financial condition and results of
operations. Any product recalls or any claims against us, regardless of merit, can strain our financial
resources and consume the time and attention of our management. If any claims against us are
successful, we may incur monetary liabilities, and our reputation may be severely damaged.
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There are legal defects regarding some of our leased properties.
We lease properties in Mainland China for various purposes. As of the Latest Practicable Date,
with respect to 9 of our leased properties in Mainland China, the lessors of such properties had still not
provided us valid title certificates, or relevant proofs evidencing the legality of the construction of the
leased properties, despite the proactive requests we previously made. Such leased properties are
primarily used as offices and, to a lesser extent, production facilities, with an aggregate GFA of
approximately 12 thousand sq.m. Of these 9 leased properties, three properties are used as our
production and warehousing facilities, with an aggregate GFA of approximately six thousand sq.m. As
advised by our PRC Legal Advisor, if the leased properties were deemed by competent government
authorities as illegal constructions under relevant PRC laws and regulations, the relevant lease
agreements may be invalid, and as a result, we may be required to vacate from the relevant properties
and relocate. In this event, our operation in such properties may be impaired and we may not be
adequately indemnified by the landlords for our related losses. Also, we will incur additional costs
during relocation to other suitable locations, thus affecting our business and financial condition.
Furthermore, in the event that any lessor’s right to lease was challenged by any party with third-party
interests, or if some of our leased properties were challenged by competent government authorities
because of the inconsistency between actual usage and prescribed usage in the title documents or due to
the lack of construction completion that proves our ability to use, our occupation or lease of such
properties is likely to be adversely affected. See “Business – Properties” for remedial measures.
In addition, as of the Latest Practicable Date, among the 40 lease agreements we entered into with
respect of our leased properties, 37 lease agreements had not been registered and filed with the
competent PRC government authorities as required by applicable PRC laws and regulations. Our leased
properties are primarily used as offices, and to a lesser extent, warehouses and production facilities with
an aggregate GFA of over 139 thousand sq.m. As of the Latest Practicable Date, all relevant leases for
our production facilitates, with an aggregate GFA of approximately 137 thousand sq.m. had not been
registered and filed with the competent PRC government authorities. We cannot assure you that the
lessors will cooperate and complete the registration in a timely manner. Although the failure to do so
does not in itself invalidate the leases, we may be ordered by the relevant PRC government authorities
to rectify such non-compliance and we may be subject to fines imposed by PRC government authorities.
According to the Administrative Measures for Commercial Housing Leases (ॡ༣၍ଣ፬
), failure to complete the relevant lease registration may subject the parties to the lease agreement a
fine between RMB1,000 to RMB10,000. As a result, if we fail to complete or timely complete such
lease registration upon the housing authorities’ request, we may face a total maximum fine up to
RMB370,000 assuming a maximum fine of RMB10,000 is imposed on each unregistered lease
agreement. See “Business – Properties” for remedial measures.
RISK FACTORS
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We are subject to uncertainties in accounting estimates for our financial assets at fair value
through profit or loss (“FVTPL”). Any fluctuation in the changes in fair value of these financial
assets would affect our financial results.
We have invested in shares of a private equity fund that recorded as financial assets at FVTPL of
RMB130.9 million in 2024. For more details, see “Financial Information — Selected Items from the
Consolidated Balance Sheets — Financial Assets at Fair V alue Through Profit or Loss” in this
Prospectus. The fair value changes in our financial assets measured at FVTPL may negatively affect our
financial performance. The fair value of such financial assets are not traded in an active market, thus are
not determined by valuation techniques that maximize the use of observable market data where it is
available and rely as little as possible on entity specific estimates. Given the inherent uncertainty in the
fair value of financial assets at FVTPL, any change in the estimates and assumptions may lead to a
change in the fair value of the financial assets, which in turn could negatively affect our financial
conditions and results. Moreover, as our investment in the private equity fund is not principal protected,
we may lose a part or all of the principal invested, and there is no assurance that we will generate return
from such investment.
Our insurance coverage may be insufficient to cover potential losses arising as a result of business
interruption, damage to our property or third-party liabilities.
We maintain limited insurance policies covering certain potential liabilities. See “Business –
Insurance” for details of insurances we purchased. In line with the industry practice, we have elected
not to maintain certain types of insurance, such as business interruption insurance. There can be no
assurance that our insurance coverage will be available or sufficient to cover all our risk exposures. Our
existing insurance contains exclusions and limitations on coverage. If insurance coverage is unavailable
or insufficient to cover any such exposures, we may incur substantial costs and diversion of our
resources which, in turn, could materially and adversely affect our business, financial condition and
results of operations.
Any loss of our senior management and failure to attract and retain qualified personnel could
affect our operations and growth prospects.
The talent, experience and leadership of our senior management team are critical to the success of
our business. In particular, Mr. Wang Y apeng, the chairman and an executive Director of our Company,
Ms. Zhuang Hao, the founder of our Group, the executive Director and the general manager of our
Company, Mr. Zhang Heping, the vice chairman, an executive Director and a deputy general manager of
our Company, have been pivotal to our success. Other members of our senior management team also
have substantial experience and expertise in our business and have made significant contributions to our
growth and success.
In addition, our future success also depends substantially on our ability to recruit, train and retain
qualified management and other qualified personnel. For example, our business is dependent on our
technical personnel to further develop AI algorithms and apply huge data resources and data insights to
our cross-border social e-commerce business. The departure of any of these individuals could have an
adverse effect on our business and prospects. We may not be able to easily or quickly replace lost
personnel and we may incur additional expenses to recruit, train and retain new hires. The unexpected
loss of services of one or more of these individuals could also have a material adverse effect on us.
RISK FACTORS
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Failure to comply with relevant laws, regulations and rules on occupational health and safety
could subject us to investigations and administrative penalties, which may adversely affect our
business, results of operations and financial condition.
As we engage a considerable number of employees in our daily business operations, we are
particularly sensitive to legal and regulatory requirements in connection with occupational health and
safety, the violation of which may subject us to administrative penalties. During the Track Record
Period, we did not encounter any incident resulting from our non-compliance with occupational health
and safety laws and regulations that has resulted in a material adverse effect on our financial condition
and results of operations. However, we cannot assure you that we will not be subject to regulatory
actions or administrative penalties in the future. With a view to ensuring compliance with relevant laws
and regulations on occupational health and safety, we have adopted certain internal rules to enhance our
compliance with laws, regulations and rules in connection with occupational health and safety. See
“Business – Environmental, Social and Corporate Governance.” However, we cannot assure you that we
or our employees will fully comply with relevant laws and regulations on occupational health and safety
in the future. If we fail to comply with the relevant laws and regulations, we could be subject to
disciplinary warnings or administrative penalties, which may in turn adversely affect our reputation, our
business, financial condition and results of operations.
Enforcement of stricter labor laws and regulations and increases in labor costs in Mainland China
may adversely affect the Group’s business and results of operations.
We are required by PRC laws and regulations to pay various statutory employee benefits,
including pension, housing funds, medical insurance, work-related injury insurance, unemployment
insurance and maternity insurance to designated government authorities for the benefit of our
employees. The relevant governmental authorities may examine whether an employer has made
adequate payments for the statutory employee benefits. We expect that our labor costs, including wages
and employee benefits, will continue to increase, which may adversely affect our financial condition
and results of operation.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY IN THE PRINCIPAL PLACE OF OUR
BUSINESS
Economic, political and social factors affecting global macroeconomic environment may adversely
impact our business, financial condition, and results of operations.
Economic conditions in markets where we operate are sensitive to global economic conditions, as
well as changes in economic and political policies and the expected or perceived overall economic
growth rate in markets where we operate. Any severe or prolonged slowdown in the economy may
materially and adversely affect our business, results of operations and financial condition. The global
macroeconomic environment faces numerous challenges. There is considerable uncertainty over the
long-term effects of the expansionary monetary and fiscal policies which had been adopted by the
central banks and financial authorities of some of the world’s leading economies.
RISK FACTORS
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Moreover, macroeconomic growth has been accompanied by periods of high inflation globally. In
response, the government authorities have implemented policies from time to time to control the global
inflation, such as restricting the availability of credit by imposing tighter bank lending policies or
higher interest rates. The government authorities may, from time to time, take similar measures in
response to future inflationary pressures worldwide. Rampant global inflation without the government
authorities’ mitigation policies would likely increase our costs, thereby materially reducing our
profitability. There is no assurance that we will be able to pass any additional costs to our consumers
and/or enterprise customers. On the other hand, such control measures may also lead to slower
economic activity globally and we may see reduced demand for our products.
We consume electricity for our daily business operation and during our manufacturing process.
During the Track Record Period and up to the Latest Practicable Date, our electricity consumption and
daily operations had not been suspended or restricted at the request of the local government authority.
We cannot assure you that we will not be subject to any power shortage or blackout in the future, which
may adversely impact our business and results of operations.
Furthermore, political conditions, such as the tensions in international trade, could materially and
adversely affect our business. For instance, constant changes in global trade practices and foreign
policies, such as trade protectionism and ongoing trade disputes, may further affect the global economy
and markets, including markets where we operate. In addition, trade restrictions, including tariffs,
quotas, embargoes, safeguards and customs restrictions, could restrict our abilities to sell products and
arrange cross-border deliveries to other markets and thus may negatively impact our results of
operations.
Geopolitical tensions have escalated and may continue to escalate due to, among other things,
trade disputes, sanctions and regulations that may prohibit or hinder cross-border transactions. Rising
political tensions could reduce levels of trades, investments, technological exchanges, and other
economic activities globally. Such tensions, and any escalation thereof, may negatively affect trading
and business environments, which may, in turn, adversely impacting our business, financial condition,
and results of operations.
In addition, various social conditions, such as social unrest, terrorist threats and potential and
ongoing wars, may increase market volatility across the globe, which may adversely affect our business,
financial condition and results of operations.
We are subject to risks associated with foreign exchange rate fluctuations.
The fluctuation in the value of RMB against other currencies, is subject to changes resulting from
governmental policies and depends to a large extent on international economic and political
developments as well as supply and demand in the local market. It is difficult to predict how market
factors or government policies may impact the exchange rates between the RMB and other currencies in
the future. With the development of foreign exchange markets and progress towards interest rate
liberalization and Renminbi internationalization, the PRC government may in the future announce
further reforms to the exchange rate regime.
RISK FACTORS
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Our sale to consumers in our cross-border social e-commerce business are primarily denominated
and settled in foreign currencies, with the remaining mainly denominated and settled in currencies of
the countries to which we sell our products. We mainly pay our domestic suppliers in Renminbi. During
the Track Record Period, we recorded net foreign exchange losses due to the foreign exchange rate
fluctuation in connection with our outstanding trade and other receivables denominated in foreign
currencies, most of which were in U.S. dollars. As a result, changes in the exchange rates between the
foreign currency, in particular the U.S. dollar and Renminbi could affect our results of operations and
competitiveness against overseas sellers. In 2024, we recognized net foreign exchange losses of
RMB3.5 million, the amount of which represents 0.06% of our total revenue for the same period. Net
foreign exchange gains amounted to RMB10.7 million and RMB1.0 million, representing 0.20% and
0.01% of our total revenue in 2022 and 2023, respectively.
The value of the Renminbi against other foreign currencies may fluctuate due to a number of
factors, all of which are beyond our control. Any significant depreciation of other foreign currencies
against Renminbi may have a negative impact on our revenue and/or gross profit while any appreciation
of other foreign currencies may also have a positive impact on our revenue and/or gross profit. Our
revenue generated from cross-border social e-commerce business decreased from RMB4,256.6 million
in 2023 to RMB3,365.9 million in 2024. Foreign exchange rate fluctuations in certain key markets,
particularly in Japan and South Korea, adversely affected our revenue. In 2024, the depreciation of
Japanese yen and South Korean won against Renminbi, and our reduced selling prices for certain
products in such areas, led to our lower average selling price per order recognized in Renminbi in such
markets. Furthermore, as a result of the unpredictability of exchange rate fluctuations, we strategically
reduced the advertising expenses in these markets with significant exchange rate fluctuations in 2024,
which also led to the decrease in our number of fulfilled orders and revenue in such markets. We may
consider taking measures to mitigate the impact of a depreciation of other foreign currencies after
taking the competitive landscape of our products into consideration. However, we cannot assure you
that such measures will successfully lead to a satisfactory result in our business operations or financial
performance.
In order to manage foreign exchange risk, we generally enter into foreign currency hedging
contracts. The contracts have the effect of converting our foreign currency at a fixed rate on a specific
date so that we are not exposed to changes in foreign currency rates during a specific period of time.
Although we seek to manage our exposure to foreign exchange rate risk in order to minimize any
negative effects from exchange rate fluctuations, there can be no assurance that we will be able to do so
successfully, especially since the effect of the foreign hedging instruments with respect to RMB are
limited at reasonable costs. Our financial condition and results could nevertheless be adversely affected
by adverse fluctuations of the foreign exchange rates. All of these factors could materially and
adversely affect our business, financial condition, results of operations and prospects, and could reduce
the value of, and dividends payable on, our Shares in foreign currency terms.
Furthermore, if interest rate increases by the PBOC, or market disruptions in the United States, EU
and other countries or regions, our cost of borrowing may increase, and our ability to access sources of
liquidity upon which we may rely to finance our operations and satisfy our debt obligations as they
become due may be adversely affected. We intend to continue to make investments to support our
business growth and may require additional funds to respond to business challenges. Any failure of
accessing sources of liquidity at reasonable costs to finance our operations or meet our obligations may
materially and adversely affect our business, prospects, financial condition and results of operations.
RISK FACTORS
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Moreover, the proceeds from the Global Offering will be received in Hong Kong dollars. As a
result, any appreciation of the RMB against the Hong Kong dollar and the U.S. dollar may result in the
decrease in the value of our proceeds from the Global Offering. Conversely, any depreciation of the
RMB may adversely affect the value of, and any dividends payable on, the Shares in foreign currency.
There are limited instruments available for us to hedge our foreign currency risk.
Policies regarding foreign currency conversion may impact our foreign exchange transactions,
including dividend payment to holders of our H Shares.
Part of our income is denominated in Renminbi. Currently, the conversion of Renminbi into
foreign currency has to comply with the relevant laws and regulations, and conversion and remittance of
foreign currencies are subject to the PRC foreign exchange regulations. Under the current PRC foreign
exchange regulatory system, foreign exchange transactions under the current account conducted by us,
including the payment of dividends following the completion of the Global Offering, do not require
advance approval from the SAFE, but we are required to present written evidence of such transactions
and conduct such transactions at designated foreign exchange banks within Mainland China that have
the requisite licenses to carry out foreign exchange business. Foreign exchange transactions under the
capital account conducted by us, however, must be approved or registered in advance by the SAFE.
The policies regarding foreign exchange transactions under the current account and the capital
account may not necessarily continue in the future. In addition, these foreign exchange policies may
restrict our ability to obtain sufficient foreign exchange, which could have an adverse effect on our
foreign exchange transactions and the fulfillment of our other foreign exchange requirements. If there
are changes in the policies regarding the payment of dividends in foreign currencies to shareholders or
other changes in foreign exchange policies resulting in insufficient foreign exchange, our payment of
dividends in foreign currencies may be affected.
RISK FACTORS
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Y ou may experience difficulties in effecting service of legal process and enforcing judgments
against us and our management.
We are a company incorporated under the laws of the PRC and majority of our business, assets and
operations are located in Mainland China. In addition, the majority of our Directors, Supervisors and
executive officers reside in Mainland China, and substantially all of the assets of such Directors,
Supervisors and executive officers are located in Mainland China. As a result, it may not be possible for
you to directly effect service of process upon us or such Directors, Supervisors or executive officers.
Pursuant to arrangements for Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Cases between Courts of the Mainland and Hong Kong Special Administrative
Region (τર ),
which came into effect on January 29, 2024, a party with an enforceable final court judgment rendered
by any designated people’s court of Mainland China or any designated Hong Kong SAR court requiring
payment of money in a civil and commercial case according to a written choice of court agreement, may
apply for recognition and enforcement of the judgment in the relevant people’s court of Mainland China
or Hong Kong SAR court. Moreover, Mainland China has not entered into a treaty for the reciprocal
recognition and enforcement of court judgments with the United States, the United Kingdom, Japan and
many other countries. In addition, Hong Kong SAR has no arrangement with the United States for
reciprocal enforcement of judgments. In accordance with the Civil Procedure Law of the PRC and other
applicable law and regulations, a court judgment obtained in the United States and any of the other
jurisdictions mentioned above may be recognized and enforced in Mainland China or Hong Kong SAR
in consideration of the treaties providing for the reciprocal enforcement of judgments of courts between
Mainland China and the country where the judgment was made.
Holders of H Shares may be subject to PRC taxation.
As a PRC-incorporated company, under applicable PRC tax laws, we are subject to a tax of up to
25% on our global income. Non-PRC resident individuals and non-PRC resident enterprises are subject
to different tax obligations with respect to dividends received from us or gains realized upon the sale or
other disposition of our H Shares in accordance with applicable PRC tax laws, rules and regulations.
Pursuant to the PRC Individual Income Tax Law (جand its
implementation rules, non-PRC resident individuals are subject to a 20% PRC individual income tax on
their dividend income derived from the PRC and we are required to withhold such tax from our dividend
payments. If there is an applicable tax treaty to avoid double taxation and taxation evasion between
Mainland China and the jurisdiction where the foreign individual resides, the applicable tax rate shall be
determined in accordance with such tax treaty. Considering that the applicable tax rate on dividends is
usually 10% according to tax treaties or tax agreements and that the number of stockholders is large for
a listed company, to simplify the tax administration, generally a domestic non-foreign-investment
enterprise with shares listed in Hong Kong SAR can withhold dividend income tax at a rate of 10%.
There remains uncertainty as to whether gains realized by non-PRC resident individuals on disposition
of H Shares are subject to PRC individual income tax.
Pursuant to the EIT Law and other applicable PRC tax rules and regulations, non-PRC resident
enterprises that do not have establishments or premises in Mainland China, or have establishments or
premises in Mainland China but their income is not related to such establishments or premises are
subject to a 10% PRC enterprise income tax rate on dividend income received from a PRC company and
gains realized upon the sale or other dispositions of equity interest in a PRC company. The 10% tax rate
is subject to reduction under any special arrangements or applicable treaties between Mainland China
and the jurisdiction where the non-resident enterprise domiciles.
RISK FACTORS
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There remains uncertainty as to whether and how non-PRC resident H shareholders are subject to
enterprise income tax rate on gains realized upon the sale or other dispositions of their H shares. In
addition, the value of your investment in our H Shares may be materially affected by unfavorable
changes in the applicable tax rates currently stipulated by the PRC tax authorities.
Under the EIT Law, an enterprise established outside of Mainland China with “de facto
management bodies” within Mainland China is considered a “resident enterprise”, meaning that it is
treated in a manner similar to a Chinese enterprise for PRC EIT purposes. The implementing rules of the
EIT Law define “de facto management bodies” as “management bodies that exercise substantial and
overall management and control over the production and operations, personnel, accounting, and
properties” of the enterprise. In addition, the Notice Regarding the Determination of
Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of
De Facto Management Bodies (͏Άุ
), or Circular 82, specifies that certain Chinese-controlled offshore incorporated
enterprises, defined as enterprises incorporated under the laws of foreign countries or territories and
that have PRC enterprises or enterprise groups as their primary controlling shareholders, will be
classified as resident enterprises if all of the following are located or resident in Mainland China: (i)
senior management personnel and departments that are responsible for daily production, operation and
management; (ii) financial and personnel decision-making bodies; (iii) key properties, accounting
books, company seal and minutes of board meetings and shareholders’ meetings; and (iv) half or more
of senior management or directors having voting rights. The State Administration of Taxation of the
PRC, or SA T, has subsequently provided further guidance on the implementation of Circular 82.
As most of our operational management is currently based in Mainland China, our offshore
subsidiaries may be deemed to be “PRC resident enterprises” for the purpose of the EIT Law. If our
offshore subsidiaries are deemed PRC resident enterprises, they could be subject to the EIT at 25% on
our global income, except that the dividends they receive from our PRC subsidiaries may be exempt
from the EIT to the extent such dividend income constitutes “dividends received by a PRC resident
enterprise from its directly invested entity that is also a PRC resident enterprise”. It is, however, unclear
what type of enterprise would be deemed a “PRC resident enterprise” for such purposes. The EIT on our
subsidiaries’ global income could significantly increase our tax burden and adversely affect our cash
flows and profitability.
For additional information, see “Taxation and Foreign Exchange” in Appendix III to this
Prospectus.
Payment of dividends is subject to restrictions under the PRC laws.
Under PRC law, dividends may be paid only out of distributable profit. Distributable profit is our
profit as determined under PRC GAAP or IFRS, whichever is lower, less any recovery of accumulated
losses and appropriations to statutory and other reserves that we are required to make. As a result, we
may not have sufficient or any distributable profit to enable us to make dividend distributions to our
Shareholders, including in years in which we are profitable. Any distributable profit not distributed in a
given year is retained and available for distribution in subsequent years.
In addition, we are required to comply with the dividend distribution rules prescribed by the PRC
regulatory authorities when determining our dividend payout ratios and we cannot assure you that the
amounts of our dividend distribution and our capital available to support the development and growth of
our business will not be affected in the future.
RISK FACTORS
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Moreover, as the calculation of distributable profits under PRC GAAP is different from the
calculation under IFRS in certain respects, our subsidiaries may not have distributable profits as
determined under PRC GAAP , even if they have profits for that year as determined under IFRS, or vice
versa. Accordingly, we may not receive sufficient distributions from our subsidiaries. Failure by our
subsidiaries to pay dividends to us could have a negative impact on our cash flows and our ability to
make dividend distributions to our Shareholders in the future, including those periods in which our
financial statements indicate that our operations have been profitable.
RISKS RELATING TO THE GLOBAL OFFERING
Regulatory requirements and characteristics of the A share and H share markets may differ .
Our A Shares are currently listed and traded on the SZSE. Following the Global Offering, our A
Shares will continue to be traded on the SZSE and our H Shares will be traded on the Hong Kong Stock
Exchange. We will be required to comply with the listing rules (where applicable) and other regulatory
regimes of both jurisdictions, unless otherwise agreed by the relevant regulators. Accordingly, we may
incur additional costs and resources in complying with the requirements of both jurisdictions.
In addition, the A share and H share markets have different characteristics, including different
trading volumes and liquidity and different investor bases. Without regulatory approval, our A Shares
and H Shares are neither convertible into nor fungible with each other. As a result of these differences,
the trading price of our A Shares and H Shares may not be the same. Fluctuations in the price of our A
Shares may adversely affect the price of our H Shares, and vice versa. Due to the different
characteristics of the A share and the H share markets, the historical prices of our A shares may not be
indicative of the performance of our H Shares. Y ou should not rely on the prior trading history of our A
Shares when evaluating an investment in our H Shares.
There has been no previous public market for our H Shares prior to the Global Offering and you
may not be able to resell our H Shares at or above the price you pay, or at all.
Prior to the completion of the Global Offering, there has been no public market for our H Shares.
We cannot guarantee that there will be an active trading market for our H Shares or such market, if
developed, will be sustained after completion of the Global Offering. The Offer Price is the result of
negotiations between our Company, the Overall Coordinator (for itself and on behalf of the
Underwriters), which may not be indicative of the price at which our H Shares will be traded following
completion of the Global Offering. The market price of our H Shares may drop below the Offer Price at
any time after completion of the Global Offering.
RISK FACTORS
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The trading volume and trading price of our H Shares may be volatile, which could result in
substantial losses to you.
In addition, the trading volume and trading price of our H Shares may be volatile and could
fluctuate widely in response to factors beyond our control, including general market conditions of the
securities markets in Hong Kong SAR, Mainland China, the United States and elsewhere in the world.
In particular, the performance and fluctuation of the market prices of other companies with business
operations located mainly in Mainland China that have listed their securities in Hong Kong SAR may
affect the volatility in the price of and trading volumes for our H Shares. Many companies based in
Mainland China have listed their securities, and some are in the process of preparing for listing their
securities, in Hong Kong SAR. Certain of these companies have experienced significant volatility,
including significant price declines after their initial public offerings. The trading performances of these
securities of such companies at the time of or after their initial public offerings may influence the
overall investor sentiment towards Mainland China-based companies listed in Hong Kong SAR, whether
positively or negatively, and consequently may impact the trading performance of our H Shares. These
broad market and industry factors may significantly affect the market price and volatility of our H
Shares, regardless of our actual operating performance, and may result in losses on your investment in
our H Shares.
A future significant increase or perceived significant increase in the supply of our H Shares in
public markets could cause the market price of our H Shares to decrease significantly, and/or
dilute shareholdings of holders of H Shares.
The market price of our H Shares could decline as a result of future sales of a substantial number
of our H Shares or other securities relating to our H Shares in the public market, or the issuance of new
shares or other securities, or the perception that such sales or issuances may occur. Future sales, or
anticipated sales, of substantial amount of our securities, including any future offerings, could also
materially and adversely affect our ability to raise capital at a specific time and on terms favorable to us.
In addition, our Shareholders may experience dilution in their holdings if we issue more securities in
the future. New shares or shares-linked securities issued by us may also confer rights and privileges that
take priority over those conferred by the H Shares.
Our Single Largest Group of Shareholders may have substantial influence over our Company and
the interest of our Single Largest Group of Shareholders may not be aligned with those of our
other Shareholders.
Our Single Largest Group of Shareholders have substantial influence over our business and
operations, including matters relating to management and policies, decisions in relation to acquisitions,
expansion plans, business consolidation, the sale of all or substantially all of our assets, the nomination
of directors, the payment of dividends or other distributions, as well as other significant corporate
actions. Immediately following the completion of the Global Offering, our Single Largest Group of
Shareholders will hold approximately 27.3% of our A Shares in aggregate. The concentration of voting
power and the substantial influence of our Single Largest Group of Shareholders over our Company may
discourage, delay or prevent a change in control of our Company, which could deprive other
shareholders of an opportunity to receive a premium for their Shares as part of a sale of our Company
and reduce the price of our H Shares. In addition, our Single Largest Group of Shareholders’ interests
may differ from those of our other Shareholders. Subject to the Listing Rules, our Articles of
Association and other applicable laws and regulations, our Single Largest Group of Shareholders will
continue to have the ability to exercise their substantial influence over us and to cause us to enter into
transactions or take, or fail to take, actions or make decisions which conflict with the best interests of
our other shareholders.
RISK FACTORS
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Purchasers of our H Shares will incur immediate and substantial dilution following the Global
Offering and may experience further dilution in the future.
As the Offer Price of our H Shares is higher than the net tangible book value per share of our H
Shares immediately prior to the Global Offering, purchasers of our H Shares in the Global Offering will
experience an immediate dilution. In addition, we may issue additional Shares in the future. Purchasers
of our H Shares may experience dilution in the net tangible assets value per Share of their investments
in the H Shares if we issue additional H Shares in the future at a price which is lower than the net
tangible asset value per Share prior to the issuance of such additional H Shares.
Our historical dividends may not be indicative of our future dividend policy, and there can be no
assurance whether and when we will pay dividends in the future.
Dividends paid in prior periods may not be indicative of future dividend payments. We cannot
guarantee when, if and in what form dividends will be paid in the future. During the Track Record
Period, we declared (i) an interim dividend for the first three quarters of 2022 of RMB99.5 million in
January 2023, representing a dividend of RMB2.63 (inclusive of tax) for every 10 A Shares of our
Company, (ii) an interim dividend for the half year of 2023 of RMB75.7 million in September 2023,
representing a dividend of RMB2.00 (inclusive of tax) for every 10 A Shares of our Company, (iii) an
annual dividend of RMB136.8 million for 2023 in March 2024, representing a dividend of RMB3.60
(inclusive of tax) for every 10 A Shares of our Company (based on the number of A Shares as of the date
of approval of the dividend declaration by our Board of Directors, excluding the A Shares repurchased
and held as treasury shares), and (iv) an interim dividend for the first three quarters of 2024 of
RMB68.2 million in November 2024, representing a dividend of RMB1.80 (inclusive of tax) for every
10 A Shares of our Company (based on the number of A Shares as of the date of approval of the
dividend declaration by our Board of Directors, excluding the A Shares repurchased and held as treasury
shares). Furthermore, in May 2025, we also declared the distribution of annual dividend for 2024,
according to which an aggregate amount of RMB59.7 million, representing a dividend of RMB1.58
(inclusive of tax) for every 10 A Shares of our Company (based on the number of A Shares as of the date
of the announcement, excluding the A Shares repurchased and held as treasury shares) is announced to
be settled in cash. Our Board of Directors may declare dividends in the future after taking into account
our results of operations, financial condition, cash requirements and availability and other factors as it
may deem relevant at such time. Any declaration and payment as well as the amount of dividends will be
subject to our constitutional documents and the PRC laws and regulations and requires approval at our
shareholders’ meeting. No dividend shall be declared or payable except out of our profits and reserves
lawfully available for distribution.
Moreover, we may not have sufficient profits or cash flow to enable us to make dividend
distributions to our Shareholders in the future, even if our financial statements indicate that our
operations have been profitable. In any event, the past distribution record should not be used as a
reference of the amount of dividends payable in the future.
Accordingly, the return on your investment in our H Shares will likely depend entirely upon any
future price appreciation of our H Shares. There is no guarantee that our H Shares will appreciate in
value or even maintain the price at which you purchased the H Shares. Y ou may not realize a return on
your investment in our H Shares and you may even risk losing your entire investment in our H Shares.
RISK FACTORS
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Y ou should not place any reliance on any information released by us in connection with the listing
of our A Shares on the SZSE.
Since the listing of our A Shares on the SZSE, we have been subject to periodic reporting and
other information disclosure requirements in Mainland China. As a result, from time to time we publicly
release information relating to us on the SZSE or other media outlets designated by the SZSE. However,
the information we announce in connection with our A Shares listing is based on regulatory
requirements and market practices in Mainland China, which differ from those applicable to the Global
Offering. Such information does not and will not form a part of this Prospectus. As a result, prospective
investors in our H Shares are reminded that in making their investment decisions as to whether to
purchase our H Shares, they should rely only on the financial, operating and other information included
in this Prospectus. By applying to purchase H Shares in the Global Offering you will be deemed to have
agreed that you will not rely on any information other than that contained in this Prospectus, and any
formal announcements made by us in Hong Kong SAR related to the Global Offering.
There can be no assurance of the accuracy or completeness of certain facts, forecasts and other
statistics obtained from governmental sources contained in this Prospectus.
Facts, forecasts and statistics in this Prospectus relating to China’s B2C outbound social media
e-commerce industry in general and in the Asian market and FMCG paper consumer packaging market
are obtained from third-party reports, either commissioned by us or publicly accessible, and other
publicly available sources, including governmental sources. We engaged CIC to prepare the CIC Report,
an independent industry report, in connection with the Global Offering. We believe that the sources of
this information are appropriate sources for such information and have taken reasonable care in
extracting and reproducing such information. We have no reason to believe that such information is
false or misleading or that any fact has been omitted that would render such information false or
misleading. The information from official government sources has not been independently verified by
us, the Joint Sponsors, the Overall Coordinators, the underwriters or any other party involved in the
global offering and no representation is given as to its accuracy. In any event, you should consider
carefully the importance placed on such information or statistics.
Y ou should read the entire Prospectus carefully to make your investment decision and should not
rely on any information contained in press articles or other media regarding us and the Global
Offering.
We strongly caution you not to rely on any information contained in press articles or other media
regarding us and/or the Global Offering. Prior to the publication of this Prospectus, there may be press
and media coverage regarding us and/or the Global Offering. Such press and media coverage may
include references to certain information that does not appear in this Prospectus, including certain
operating and financial information and projections, valuations and other information. We have not
authorized the disclosure of any such information in the press or media and do not accept any
responsibility for any such press or media coverage or the accuracy or completeness of any such
information or publication. We make no representation as to the appropriateness, accuracy,
completeness or reliability of any such information or publication. To the extent that any such
information is inconsistent or conflicts with the information contained in this Prospectus, we disclaim
responsibility for it and you should not rely on such information. Y ou should only rely on the
information included in this Prospectus to make your investment decision, and we strongly caution you
not to rely on any information contained in press articles or other media coverage relating to us, our H
Shares or the Global Offering.
RISK FACTORS
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The forward-looking statements included in this Prospectus are based on various assumptions.
There are also uncertainties, risks and other unforeseen factors which may cause our actual performance
or achievements to be materially different from those expressed or implied by such forward-looking
statements. See “Forward-looking Statements” for details of these statements and the associated risks.
Forward-looking statements contained in this Prospectus are based on certain assumptions and
subject to risks and uncertainties.
Certain forward-looking statements and information relating to us contained in this Prospectus are
based on our beliefs as well as assumptions made by, and information currently available to, us. When
used in this Prospectus, the words “believe”, “expect”, “estimate”, “predict”, “aim”, “intend”, “will”,
“may”, “plan”, “consider”, “anticipate”, “seek”, “should”, “could”, “would”, “continue”, and similar
expressions, as they relate to our Company or our Directors, are intended to identify forward-looking
statements. Such statements reflect our current view with respect to future events, business operations,
liquidity and capital resources, some of which may not materialize or may change. These statements are
subject to certain uncertainties and assumptions, including the other risk factors as described in this
Prospectus. Subject to the ongoing disclosure obligations of the Listing Rules or other requirements of
the Stock Exchange, we do not intend to publicly update or otherwise revise the forward-looking
statements in this Prospectus, whether as a result of new information, future events or otherwise. Y ou
should not place undue reliance on such forward-looking statements and information.
RISK FACTORS
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In preparation for the Listing, our Company has applied for the following waivers from strict
compliance with the relevant provisions of the Listing Rules as set out below.
W AIVER IN RELATION TO MANAGEMENT PRESENCE IN HONG KONG SAR
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient management
presence in Hong Kong SAR. This normally means that at least two of our executive Directors must be
ordinarily resident in Hong Kong SAR. Since substantially all of the business operations of our Group
are managed and conducted outside of Hong Kong SAR, and all of our executive Directors, except Mr.
Lu Tashan ( ௔̴ʆ ), ordinarily reside in Mainland China, we do not have, and for the foreseeable future
will not have, sufficient management presence in Hong Kong SAR for the purpose of satisfying the
requirements under Rules 8.12 and 19A.15 of the Listing Rules. Accordingly, we have applied for, and
the Stock Exchange has granted us, a waiver from strict compliance with the requirements under Rules
8.12 and 19A.15 of the Listing Rules and paragraph 10 under Chapter 3.10 of the Guide for New Listing
Applicants subject to the following conditions:
(a) we have appointed Ms. Zhuang Hao ( ୿ख) and Mr. Lu, as our authorized representatives for
the purposes of Rule 3.05 of the Listing Rules to serve as our principal channel of
communication with the Stock Exchange. We have provided the Stock Exchange with their
contact details, and they will be available to meet with the Stock Exchange within a
reasonable period of time upon the request of the Stock Exchange and will be readily
contactable by telephone, facsimile and email;
(b) as and when the Stock Exchange wishes to contact our Directors on any matters, each of our
authorized representatives will have means to contact all of our Directors promptly at all
times. We will implement measures such that (i) each Director must provide his or her
mobile phone number, office phone number, facsimile number and email address to our
authorized representatives and the Stock Exchange; and (ii) in the event that a Director
expects to travel or otherwise be out of office, he or she will provide the phone number of the
place of his or her accommodation to our authorized representatives. We have provided the
Stock Exchange with the contact details of each Director to facilitate communication with
the Stock Exchange;
(c) each Director who is not an ordinarily resident in Hong Kong SAR possesses or can apply for
valid travel documents to visit Hong Kong SAR and can meet with the Stock Exchange
within a reasonable period of time;
(d) we have appointed a compliance adviser, Fosun International Capital Limited, pursuant to
Rule 3A.19 of the Listing Rules, which will act as our additional and alternative channel of
communication with the Stock Exchange, and its representative(s) will be fully available to
answer enquiries from the Stock Exchange. The compliance adviser will advise our Company
on on-going compliance requirements and other issues arising under the Listing Rules and
other applicable laws and regulations in Hong Kong SAR after the Listing, and will have
access at all times to our authorized representatives, Directors and other senior officers to
ensure that it is in a position to respond promptly to any inquiries or requests from the Stock
Exchange in respect of our Company; and
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(e) any meeting between the Stock Exchange and our Directors will be arranged through our
authorized representatives or compliance adviser or directly with our Directors within a
reasonable time frame. We will inform the Stock Exchange promptly in respect of any
changes in our authorized representatives and compliance adviser.
W AIVER IN RELATION TO JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, our company secretary must be an individual
who by virtue of his or her academic or professional qualifications or relevant experience is, in the
opinion of the Stock Exchange, capable of discharging the functions of company secretary. Note 1 to
Rule 3.28 of the Listing Rules provides that the Stock Exchange considers the following academic or
professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the
Laws of Hong Kong); or
(c) a certified public accountant as defined in the Professional Accountants Ordinance (Chapter
50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules provides that in assessing “relevant experience”, the
Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
Securities and Futures Ordinance, the Companies Ordinance, Companies (Winding Up and
Miscellaneous Provisions) Ordinance, and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement under Rule
3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
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We have appointed Mr. Lu Tashan ( ௔̴ʆ ) as one of the joint company secretaries, considering
his past working experiences within our Group and his thorough understanding of our internal
administration, business operations and corporate culture. As such, although Mr. Lu does not possess
the specified qualifications strictly required by Rule 3.28 of the Listing Rules, our Directors believe that
Mr. Lu is capable of discharging the functions of a joint company secretary with the assistance of Mr.
Lee Chung Shing (ϓ ), who meets the requirements under Rule 3.28 of the Listing Rules and has
been appointed to act as the other joint company secretary and to assist Mr. Lu in the compliance
matters for the Listing as well as other Hong Kong regulatory requirements for an initial period of three
years from the Listing Date. Over such period, we will implement the following measures to assist Mr.
Lu to satisfy the requisite qualifications as prescribed in Rules 3.28 and 8.17 of the Listing Rules:
(a) Mr. Lee will assist Mr. Lu so as to enable him to discharge his duties and responsibilities as a
joint company secretary of our Company. Given Mr. Lee’s relevant experiences, he will be
able to advise both Mr. Lu and us on the relevant requirements of the Listing Rules as well as
other applicable laws and regulations of Hong Kong SAR;
(b) Mr. Lu will be assisted by Mr. Lee for an initial period of three years commencing from the
Listing Date, which should be sufficient for him to acquire the requisite knowledge and
experience under Rule 3.28 of the Listing Rules;
(c) we will ensure that Mr. Lu has access to the relevant trainings and support to enable him to
familiarize himself with the Listing Rules and the duties required of a company secretary of
an issuer listed on the Stock Exchange, and Mr. Lu has undertaken to attend such trainings;
(d) Mr. Lee will communicate with Mr. Lu on a regular basis regarding matters in relation to
corporate governance, the Listing Rules as well as other applicable laws and regulations of
Hong Kong which are relevant to our operations and affairs. Mr. Lee will work closely with,
and provide assistance to Mr. Lu with a view to discharging his duties and responsibilities as
a company secretary, including but not limited to organizing the Board meetings and
Shareholders’ meetings; and
(e) pursuant to Rule 3.29 of the Listing Rules, Mr. Lee and Mr. Lu will also attend in each
financial year no less than 15 hours of relevant professional training courses to familiarize
themselves with the requirements of the Listing Rules and other legal and regulatory
requirements of Hong Kong SAR. Both Mr. Lee and Mr. Lu will be advised by our legal
advisors as to Hong Kong SAR law and our compliance adviser as and when appropriate and
required.
Accordingly, we have applied for, and the Stock Exchange has granted us, a waiver from strict
compliance with the requirements of Rules 3.28 and 8.17 of the Listing Rules, for an initial period of
three years from the Listing Date (the “ Waiver Period ”). Pursuant to paragraph 13 under Chapter 3.10
of the Guide for New Listing Applicants, the waiver is granted on the conditions: (1) Mr. Lu must be
assisted by Mr. Lee, who possesses the qualifications or experience as required under Rule 3.28 and is
appointed as a joint company secretary throughout the Waiver Period; and (2) the waiver can be revoked
if there are material breaches of the Listing Rules by our Company. Prior to the expiry of the three-year
period, we will conduct a further evaluation of the qualification and experience of Mr. Lu to determine
whether the requirements as stipulated in Rules 3.28 and 8.17 of the Listing Rules can be satisfied, and
we will liaise with the Stock Exchange to assess whether Mr. Lu, having had the benefit of Mr. Lee’s
assistance for three years, would have acquired the relevant experience within the meaning of Note 2 to
Rule 3.28 of the Listing Rules such that there is no need to further apply for a waiver.
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For more details of Mr. Lee and Mr. Lu’s biographies, please refer to the section headed
“Directors, Supervisors and Senior Management”.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND THEIR
CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of a listing
applicant may only subscribe for or purchase any securities for which listing is sought that are being
marketed by or on behalf of a listing applicant either in his/her/its own name or through nominees if the
conditions in Rule 10.03 of the Listing Rules are fulfilled, namely that (i) no securities are to be offered
to the existing shareholders on a preferential basis and no preferential treatment is given to them in the
allocation of the securities; and (ii) the minimum prescribed percentage of public shareholders required
by Rule 8.08(1) of the Listing Rules is achieved. Paragraph 5(2) of Appendix F1 to the Listing Rules
states that, without the prior written consent of the Stock Exchange, no allocations will be permitted to
be made to directors or existing shareholders of a listing applicant or their close associates, unless the
conditions set out in Rules 10.03 and 10.04 are fulfilled.
Chapter 4.15 of the Guide provides that the Stock Exchange will consider granting a waiver from
Rule 10.04 of the Listing Rules and a consent, pursuant to paragraph 5(2) of Appendix F1 to the Listing
Rules, to allow a listing applicant’s existing shareholders or their close associates to participate in its
initial public offering if any actual or perceived preferential treatment arising from their ability to
influence the listing applicant during the allocation process can be addressed.
Prior to the Listing, our share capital comprises entirely A Shares listed on the SZSE. As a
company listed on the SZSE with its A Shares publicly traded thereon and with a large public A Shares
shareholder base, it would be unduly burdensome for us to seek the prior consent of the Stock Exchange
for each of our minority existing Shareholders or their close associates who subscribe for the H Shares
in the Global Offering.
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance with
Rule 10.04 of, and a consent under paragraph 5(2) of Appendix F1 to the Listing Rules to permit H
Shares in the International Offering to be placed to certain existing minority Shareholders who (i) hold
less than 5% of the voting rights in our Company prior to the completion of the Global Offering and (ii)
are not and will not become (upon the completion of the Global Offering) core connected persons of our
Company or the close associates of any such core connected person (together, the “ Permitted Existing
Shareholder ”), on the following conditions:
(a) each Permitted Existing Shareholder to whom our Company may allocate the H Shares under
the International Offering holds less than 5% of the voting rights in our Company prior to the
completion of the Global Offering;
(b) each Permitted Existing Shareholder is not, and will not be, a core connected person of our
Company or any close associate of any such core connected person immediately prior to or
following the Global Offering;
(c) none of the Permitted Existing Shareholders has the power to appoint any Directors nor have
any other special rights in our Company;
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(d) allocation to the Permitted Existing Shareholders and their close associates will not affect
our Company’s ability to satisfy the public float requirement under Rule 8.08(1) of the
Listing Rules;
(e) to the best knowledge and belief of our Company and the Joint Sponsors, and based on
discussions between our Company and the Overall Coordinators and confirmations required
to be submitted to the Stock Exchange by the Joint Sponsors, we will confirm to the Stock
Exchange that no preferential treatment will be given to the Permitted Existing Shareholders
and/or their close associates in the allocation process by virtue of their relationship with our
Company;
(f) in the case of participation as placees, the Overall Coordinators will confirm to the Stock
Exchange that, to the best of their knowledge and belief, no preferential treatment has been,
nor will be, given to any of the Permitted Existing Shareholders or their close associates by
virtue of their relationship with our Company in any allocation in the International Offering;
and
(g) the Joint Sponsors will confirm to the Stock Exchange that based on (i) their discussions
with our Company and the Overall Coordinators; and (ii) the confirmations provided to the
Stock Exchange by our Company and the Overall Coordinators, and to the best of their
knowledge and belief, they have no reason to believe that the Permitted Existing
Shareholders and/or their close associates received any preferential treatment in the
allocation process as placees by virtue of their relationship with our Company, and details of
allocation to the Permitted Existing Shareholders will be disclosed in the allotment results
announcement of our Company.
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This Prospectus, for which our Directors (including any proposed director who is named as such in
this Prospectus) collectively and individually accept full responsibility, includes particulars given in
compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Securities
and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) and the Listing
Rules for the purpose of giving information to the public with regard to our Group. Our Directors,
having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the
information contained in this Prospectus is accurate and complete in all material respects and not
misleading or deceptive, and there are no other matters the omission of which would make any
statement herein or this Prospectus misleading or deceptive.
FILING PROCEDURES WITH THE CSRC
Our filing procedures with the CSRC for the submission of the application to list our H Shares on
the Stock Exchange and for the Global Offering were completed on January 24, 2025. In completing
such filing, the CSRC accepts no responsibility for our financial soundness, nor for the accuracy of any
of the statements made or opinions expressed in this Prospectus.
THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS
This Prospectus is published solely in connection with the Hong Kong Public Offering, which
forms part of the Global Offering. The Global Offering comprises the Hong Kong Public Offering of
initially 6,791,000 Offer Shares and the International Offering of initially 61,119,000 Offer Shares
(subject, in each case, to reallocation on the basis as set out in the section headed “Structure of the
Global Offering” in this Prospectus). For applicants under the Hong Kong Public Offering, this
prospectus set out the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained and
representations made in this Prospectus and on the terms and subject to the conditions set out herein and
therein. No person is authorized to give any information in connection with the Global Offering or to
make any representation not contained in this Prospectus, and any information or representation not
contained herein must not be relied upon as having been authorized by our Company, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters, the Capital Market Intermediaries, any of their respective directors,
agents, employees or advisors or any other party involved in the Global Offering.
Neither the delivery of this Prospectus nor any offering, sale or delivery made in connection with
the H Shares should, under any circumstances, constitute a representation that there has been no change
or development reasonably likely to involve a change in our affairs since the date of this Prospectus or
imply that the information contained in this Prospectus is correct as of any date subsequent to the date
of this Prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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OFFER SHARES FULLY UNDERWRITTEN
The listing of our H Shares on the Stock Exchange is sponsored by the Joint Sponsors and the
Global Offering is managed by the Joint Global Coordinators. The Hong Kong Public Offering is fully
underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting
Agreement and is subject to us and the Joint Global Coordinators (for themselves and on behalf of the
Underwriters) agreeing on the Offer Price on or before the Price Determination Date. An International
Underwriting Agreement relating to the International Offering is expected to be entered into on or
around the Price Determination Date, subject to the Offer Price being agreed. The International Offering
will be fully underwritten by the International Underwriters under the terms of the International
Underwriting Agreement to be entered into.
If, for any reason, the Offer Price is not agreed between us and the Joint Global Coordinators (for
themselves and on behalf of the Underwriters) on or before 12:00 noon on Friday, May 23, 2025, the
Global Offering will not proceed and will lapse. For full information about the Underwriters and the
underwriting arrangements, please refer to the section headed “Underwriting” in this Prospectus.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed “How to
Apply for the Hong Kong Offer Shares” in this Prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering, including its conditions, are set out in the section
headed “Structure of the Global Offering” in this Prospectus.
RESTRICTIONS ON OFFER AND SALE OF H SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will be
required to, or be deemed by his or her acquisition of the Hong Kong Offer Shares to, confirm that he or
she is aware of the restrictions on offers and sales of the Hong Kong Offer Shares described in this
Prospectus.
No action has been taken to permit a public offering of the H Shares in any jurisdiction other than
Hong Kong SAR, or the distribution of this Prospectus in any jurisdiction other than Hong Kong SAR.
Accordingly, this Prospectus may not be used for the purpose of, and does not constitute, an offer or
invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not
authorized or to any person to whom it is unlawful to make such an offer or invitation. The distribution
of this prospectus and the offering and sales of the Offer Shares in other jurisdictions are subject to
restrictions and may not be made except as permitted under the applicable securities laws of such
jurisdictions pursuant to registration with or authorization by the relevant securities regulatory
authorities or an exemption therefrom. In particular, the Offer Shares have not been publicly offered or
sold, directly or indirectly, in Mainland China or the U.S.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the granting of the listing of,
and permission to deal in, our H Shares to be issued pursuant to the Global Offering.
Under section 44B(l) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, if
the permission for the H Shares to be listed on the Stock Exchange pursuant to this Prospectus has been
refused before the expiration of three weeks from the date of the closing of the Global Offering or such
longer period not exceeding six weeks as may, within the said three weeks, be notified to us by or on
behalf of the Stock Exchange, then any allotment made on an application in pursuance of this
Prospectus shall, whenever made, be void.
COMMENCEMENT OF DEALINGS IN THE H SHARES
Dealings in the H Shares on the Stock Exchange are expected to commence at 9:00 a.m. on
Tuesday, May 27, 2025. Except for the A Shares that have been listed on the SZSE and our pending
application to the Stock Exchange for the listing of, and permission to deal in, the H Shares, no part of
our share or debt securities is listed on or dealt in on the Stock Exchange or any other stock exchange
and no such listing or permission to list is being or proposed to be sought in the near future.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the Stock
Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the Listing Date or any other date as determined by HKSCC. Settlement of transactions between
Exchange Participants (as defined in the Listing Rules) is required to take place in CCASS on the
second settlement day after any trading day. All activities under CCASS are subject to the General
Rules of HKSCC and HKSCC Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.
Investors should seek the advice of their stockbroker or other professional advisor for details of the
settlement arrangements as such arrangements may affect their rights and interests.
H SHARE REGISTER, STAMP DUTY AND DIVIDENDS PA Y ABLE TO HOLDERS OF H
SHARES
All Offer Shares will be registered on the H Share register of our Company maintained by our H
Share Registrar, Computershare Hong Kong Investor Services Limited in Hong Kong SAR. Our register
of members will also be maintained by us at our legal address in Mainland China.
Dealings in the H Shares registered on the H Share register of our Company in Hong Kong SAR
will be subject to Hong Kong SAR stamp duty. The stamp duty is charged to each of the seller and
purchaser at the ad valorem rate of 0.1% of the consideration for, or (if greater) the value of, the H
Shares transferred. In other words, a total of 0.2% is currently payable on a typical sale and purchase
transaction of the H Shares. In addition, a fixed duty of HK$5 is charged on each instrument of transfer
(if required).
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Unless determined otherwise by our Company, dividends payable in respect of our H Shares will
be paid to the Shareholders listed on the H Share register of our Company in Hong Kong SAR, by
ordinary post, at the Shareholders’ risk, to the registered address of each Shareholder of our Company.
COMPLIANCE WITH THE LISTING RULES
We will comply with applicable laws and regulations in Hong Kong (including the Listing Rules)
and any other undertakings which have been given in favor of the Stock Exchange from time to time. If
the Listing Committee finds that there has been a breach by us of the Listing Rules or such other
undertakings which may have been given in favor of the Stock Exchange from time to time, the Listing
Committee may instigate cancelation or disciplinary proceedings in accordance with the Listing Rules.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed the H Share Registrar, and the H Share Registrar has agreed, not to register the
subscription, purchase or transfer of any H Shares in the name of any particular holder unless the holder
delivers a signed form to the H Share Registrar in respect of those H Shares bearing statements to the
effect that the holder:
(i) agrees with us and each of our Shareholders, and we agree with each Shareholder, to observe
and comply with the PRC Company Law, the Companies Ordinance, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and our Articles;
(ii) agrees with us, each of our Shareholders, Directors, Supervisors, managers and officers, and
we, acting for ourselves and for each of our Directors, Supervisors, managers and officers
agree with each Shareholder, to refer all differences and claims arising from our Articles or
any rights or obligations conferred or imposed by the PRC Company Law or other relevant
laws and administrative regulations concerning our affairs to arbitration in accordance with
our Articles, and any reference to arbitration shall be deemed to authorize the arbitration
tribunal to conduct hearings in open session and to publish its award, which shall be final and
conclusive;
(iii) agrees with us and each of our Shareholders that our H Shares are freely transferable by the
holders thereof; and
(iv) authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers and
officers undertake to observe and comply with their obligations to our Shareholders as
stipulated in our Articles.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional advisors
as to the taxation implications of subscribing for, purchasing, holding or disposing of, and/or dealing in
the H Shares or exercising rights attached to them. None of us, the Joint Sponsors, the Sponsor-Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, any of their respective affiliates, directors, supervisors, officers, employees, agents or
representatives or any other person or party involved in the Global Offering accepts responsibility for
any tax effects on, or liabilities of, any person resulting from the subscription, purchase, holding,
disposition of, or dealing in, or the exercise of any rights in relation to, the H Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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EXCHANGE RATE CONVERSION
Solely for your convenience, this Prospectus contains translations of Renminbi, Hong Kong
dollars and U.S. dollars based on the latest available exchange rates published by the PBOC for foreign
exchange translations as of the Latest Practicable Date. Unless indicated otherwise, the translation of
Renminbi into Hong Kong dollars, of Renminbi into U.S. dollars and of U.S. dollars into Hong Kong
dollars, and vice versa, in this Prospectus was made at the following rates:
• RMB0.9276 to HK$1.00;
• RMB7.2095 to US$1.00; and
• US$1.00 to HK$7.7722
No representation is made that any amounts in Renminbi, Hong Kong dollars or U.S. dollars can
be or could have been at the relevant dates converted at the above rates or any other rates or at all.
LANGUAGE
Translated English names of Chinese laws and regulations, governmental authorities, departments,
entities (including certain members of our Group), institutions, natural persons, facilities, certificates,
titles and the like included in this Prospectus and for which no official English translation exists are
unofficial translations for identification purposes only. In the event of any inconsistency, the Chinese
name shall prevail.
If there is any inconsistency between the English version of this Prospectus and the Chinese
translation of this Prospectus, the English version of this Prospectus shall prevail unless otherwise
stated. However, if there is any inconsistency between the names of any of the entities mentioned in this
English document which are not in the English language and their English translations, the names in
their respective original languages shall prevail.
ROUNDING AND OTHERS
Certain amounts and percentage figures included in this Prospectus have been subject to rounding
adjustments, or have been rounded to one or two decimal places. Any discrepancies in any table, chart
or elsewhere between totals and sums of amounts listed therein are due to rounding.
Unless otherwise specified, all references to any shareholdings in our Company are based on
figure(s) as of the Latest Practicable Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 8–


--- page 108 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. W ANG Y apeng (؃North Court, Lucheng
Baihe IV
No. 2-4 Dirun Road
Zhengzhou
Henan Province
PRC
Chinese
Ms. ZHUANG Hao ( ୿ख) No.2-34 Y uandang Road
Siming District
Xiamen
PRC
Chinese
Mr. ZHANG Heping ( ੵձ̻ ) No.2-34 Y uandang Road
Siming District
Xiamen
PRC
Chinese
Mr. ZHUANG Shu ( ୿⤳) Room 401, No. 96, Sports Road
Siming District
Xiamen
PRC
Chinese
Mr. LU Tashan ( ௔̴ʆ ) Room E, 17/F, Block 12
Pacific Palisades
1 Braemar Hill Road
North Point
Hong Kong SAR
Chinese
Non-executive Director
Mr. LIAO Shengxing ( ࿋͛ጳ ) Room 1501, Building 35
The Triumphal Arch
Zhonghai International Community
Nankang Road
Zhanggong District
Ganzhou
Jiangxi Province
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 9–


--- page 109 ---
Name Address Nationality
Independent non-executive Directors
Dr. ZHANG Guoqing ( ੵ਷૶ ) 303, Building 44
Xiamen University Seaside
No. 422 Siming South Road
Xiamen
PRC
Chinese
Dr. Y ANG Chenhui ( เોฯ ) 801, No. 11 Huizhan North Lane
Siming District
Xiamen
PRC
Chinese
Professor Alfred SIT Wing Hang
(ᑡ͑㛬 )
Flat B, 7/F, Block 1
Julimout Garden
8-12 Fu Kun Street
Shatin
New Territories
Hong Kong SAR
Chinese
Mr. HAN Jianshu (ࣣܔ6-2-2501, Block A2
Wanda Tianxi Residential Area
Xinghualing District
Taiyuan
Shanxi Province
PRC
Chinese
Ms. NG Weng Sin ( ю͑⟂ ) 5/F, 267 Castle Peak Road
Cheung Sha Wan
Kowloon
Hong Kong SAR
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 100 –


--- page 110 ---
SUPERVISORS
Name Address Nationality
Ms. BAI Xueting ( ͣ௛ణ ) Room 303, No. 93 Hubin Sanli
Siming District
Xiamen
PRC
Chinese
Mr. HE Zhuokai ( Оՙ⺍ ) 5/F, Unit 1, Building 3
No. 6 Zhongyuan Lane
Wuhou District
Chengdu
PRC
Chinese
Mr. HU Guanhong (҃ ) 7-1-1503, Jinhui Y uefu
Y anta District, Xi’an
Shaanxi
PRC
Chinese
For details of the biographies and other relevant information of our Directors and Supervisors, see
“Directors, Supervisors and Senior Management” in this Prospectus.
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors and Sponsor-Overall
Coordinators
(in alphabetical order)
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
Overall Coordinators
(in alphabetical order)
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 101 –


--- page 111 ---
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
(in alphabetical order)
BOCI Asia Limited
26/F Bank of China Tower
1 Garden Road
Central
Hong Kong SAR
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road
Central
Hong Kong SAR
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Hong Kong SAR
CCB International Capital Limited
12/F CCB Tower
3 Connaught Road Central
Central
Hong Kong SAR
Joint Bookrunners China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
(in alphabetical order)
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 102 –


--- page 112 ---
BOCI Asia Limited
26/F Bank of China Tower
1 Garden Road
Central
Hong Kong SAR
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road
Central
Hong Kong SAR
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Hong Kong SAR
CCB International Capital Limited
12/F CCB Tower
3 Connaught Road Central
Central
Hong Kong SAR
Quam Securities Limited
5/F and 24/F (Rooms 2401 and 2412)
Wing On Centre
111 Connaught Road Central
Hong Kong SAR
SDHG International Securities Limited
Floor 38, The Center
99 Queen’s Road Central
Central
Hong Kong SAR
Fosun International Securities Limited
Suite 2101-2105, 21/F Champion Tower
3 Garden Road
Central
Hong Kong SAR
Long Bridge HK Limited
Unit 3302, 33/F, West Tower
Shun Tak Centre
No. 168-200 Connaught Road Central
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 103 –


--- page 113 ---
Livermore Holdings Limited
Unit 1214A 12/F Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong SAR
Sinolink Securities (Hong Kong) Company Limited
Unit 3501-08, 35/F, Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong SAR
Huafu International Securities Limited
Unit 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong SAR
Joint Lead Managers China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
(in alphabetical order)
BOCI Asia Limited
26/F Bank of China Tower
1 Garden Road
Central
Hong Kong SAR
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road
Central
Hong Kong SAR
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 104 –


--- page 114 ---
CCB International Capital Limited
12/F CCB Tower
3 Connaught Road Central
Central
Hong Kong SAR
Quam Securities Limited
5/F and 24/F (Rooms 2401 and 2412)
Wing On Centre
111 Connaught Road Central
Hong Kong SAR
SDHG International Securities Limited
Floor 38, The Center
99 Queen’s Road Central
Central
Hong Kong SAR
Fosun International Securities Limited
Suite 2101-2105, 21/F Champion Tower
3 Garden Road
Central
Hong Kong SAR
Long Bridge HK Limited
Unit 3302, 33/F, West Tower
Shun Tak Centre
No. 168-200 Connaught Road Central
Hong Kong SAR
Livermore Holdings Limited
Unit 1214A 12/F Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong SAR
Sinolink Securities (Hong Kong) Company Limited
Unit 3501-08, 35/F, Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong SAR
Huafu International Securities Limited
Unit 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 105 –


--- page 115 ---
Capital Market Intermediaries China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong SAR
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong SAR
(in alphabetical order)
BOCI Asia Limited
26/F Bank of China Tower
1 Garden Road
Central
Hong Kong SAR
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road
Central
Hong Kong SAR
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Hong Kong SAR
CCB International Capital Limited
12/F CCB Tower
3 Connaught Road Central
Central
Hong Kong SAR
Quam Securities Limited
5/F and 24/F (Rooms 2401 and 2412)
Wing On Centre
111 Connaught Road Central
Hong Kong SAR
SDHG International Securities Limited
Floor 38, The Center
99 Queen’s Road Central
Central
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 106 –


--- page 116 ---
Fosun International Securities Limited
Suite 2101-2105, 21/F Champion Tower
3 Garden Road
Central
Hong Kong SAR
Long Bridge HK Limited
Unit 3302, 33/F, West Tower
Shun Tak Centre
No. 168-200 Connaught Road Central
Hong Kong SAR
Livermore Holdings Limited
Unit 1214A 12/F Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong SAR
Sinolink Securities (Hong Kong) Company Limited
Unit 3501-08, 35/F, Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong SAR
Huafu International Securities Limited
Unit 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong SAR
Legal Advisors to our Company As to Hong Kong and U.S. law
Dentons Hong Kong LLP
Suite 3201
Jardine House
1 Connaught Place
Central
Hong Kong SAR
As to local Hong Kong SAR law
Robertsons
57/F, The Center
99 Queen’s Road Central
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 107 –


--- page 117 ---
As to PRC law
Beijing Kangda Law Firm
8/F, Emperor Group Centre
No. 12D, Jianwai Avenue,
Chaoyang District
Beijing
PRC
As to PRC data compliance
JunHe LLP
20/F, China Resources Building
8 Jianguomenbei Avenue
Beijing
PRC
As to the law of Taiwan
Lee and Li, Attorneys-at-Law
8F, No. 555
Sec.4, Zhongxiao E. Rd.
Taipei 110055
Taiwan
As to Singapore law
Dentons Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
As to the law of the Kingdom of Saudi Arabia
Al Tamimi & Company
Abdulhadi Al Hugayet Tower, 9th Floor,
Prince Turki Street, Al Shamaliah Area
PO Box 1227, Al Khobar 31952, Saudi Arabia
As to Korean law
Shin & Kim LLC
23F, D-Tower (D2)
17 Jongno 3-gil, Jongno-gu
Seoul 03155, Korea
As to Japanese law
Anderson Mori & Tomotsune
Otemachi Park Building
1-1-1 Otemachi, Chiyoda-Ku
Tokyo 100-8136
Japan
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 118 ---
As to law of the Philippines
SyCip Salazar Hernandez & Gatmaitan
SyCipLaw Center
105 Paseo de Roxas
Makati City 1229
The Philippines
As to Malaysian law
Christopher & Lee Ong
Level 22, Axiata Tower
No.9, Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur, Malaysia
As to law of Thailand
Weerawong, Chinnavat & Partners Ltd.
No. 1 Park Silon Tower, 39th Floor
Convent Road, Silom
Bangrak, Bangkok 10500
Thailand
Legal Advisors to the Underwriters
and the Joint Sponsor
As to Hong Kong and U.S. law
Jia Yuan Law Office
Suites 3502-03, 35/F
One Exchange Square
8 Connaught Place
Central, Hong Kong
As to Hong Kong law
Allen Overy Shearman Sterling
9/F, Three Exchange Square
Central
Hong Kong SAR
As to PRC law
Han Kun Law Offices
9/F, Office Tower C1, Oriental Plaza
1 East Chang An Ave., Dongcheng District
Beijing
PRC
Auditor and Reporting Accountants Ernst & Y oung
Certified Public Accountants
27/F, One Taikoo Place
979 King’s Road
Quarry Bay,
Hong Kong SAR
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 109 –


--- page 119 ---
Compliance Adviser Fosun International Capital Limited
Suite 2101-2105, 21/F, Champion Tower
3 Garden Road
Central
Hong Kong SAR
Industry Consultant China Insights Industry Consultancy Limited
10/F Block B, Jingan International Center
88 Puji Road
Jingan District
Shanghai
PRC
Tax Advisor Ernst & Y oung (China) Advisory Limited
50/F, Shanghai World Financial Center
100 Century Avenue
Pudong New Area
Shanghai
PRC
Receiving Bank CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 110 –


--- page 120 ---
Registered Office and Headquarter in
the PRC
No. 9 Putou Road, Dongfu Industry Park II
Haicang District
Xiamen, Fujian Province
PRC
Principal Place of Business in
Hong Kong
Office 5, 15/F
Bank of East Asia Harbour View Centre
No. 56 Gloucester Road
Hong Kong SAR
Company’s Website www.jihong.cn
(The information contained on the website does not
form part of this Prospectus)
Joint Company Secretaries Mr. LU Tashan
Room E, 17/F, Block 12
Pacific Palisades
1 Braemar Hill Road
North Point
Hong Kong SAR
Mr. LEE Chung Shing
(CPA of HKICPA, FCCA of ACCA)
46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai, Hong Kong SAR
Authorized Representatives Ms. ZHUANG Hao
No.2-34 Y uandang Road
Siming District
Xiamen
PRC
Mr. LU Tashan
Room E, 17/F, Block 12
Pacific Palisades
1 Braemar Hill Road
North Point
Hong Kong SAR
Strategy Committee Mr. W ANG Y apeng (Chairperson)
Ms. ZHUANG Hao
Mr. HAN Jianshu
Audit Committee Dr. ZHANG Guoqing (Chairperson)
Ms. NG Weng Sin
Dr. Y ANG Chenhui
Remuneration and Appraisal Committee Ms. NG Weng Sin (Chairperson)
Dr. ZHANG Guoqing
Mr. ZHUANG Shu
CORPORA TE INFORMA TION
– 111 –


--- page 121 ---
Nomination Committee Dr. Y ANG Chenhui (Chairperson)
Professor Alfred SIT Wing Hang
Mr. ZHANG Heping
H Share Registrar Computershare Hong Kong Investor Services Limited
Shops 1712-1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong SAR
Principal Banks China Merchants Bank, Xiamen branch
No. 18 Lingshiguan Road
Siming District
Xiamen
Fujian Province
PRC
Agricultural Bank of China Limited,
Xiamen Haicang branch
No. 254 Haifu Road
Haicang District
Xiamen
Fujian Province
PRC
CORPORA TE INFORMA TION
– 112 –


--- page 122 ---
The information and statistics set out in this section and other sections of this Prospectus were
extracted from the report prepared by CIC, which was commissioned by us, and from various official
government publications and other publicly available publications. We engaged CIC to prepare the
CIC Report, an independent industry report, in connection with the Global Offering. We believe that
the sources of this information are appropriate sources for such information and have taken
reasonable care in extracting and reproducing such information. We have no reason to believe that
such information is false or misleading or that any fact has been omitted that would render such
information false or misleading. The information from official government sources has not been
independently verified by us, the Joint Sponsors, the Overall Coordinators, the underwriters or any
other party involved in the Global Offering and no representation is given as to its accuracy.
OVERVIEW OF CHINA’S B2C OUTBOUND E-COMMERCE MARKET
With the ever-growing number of Internet users and the rapid advancements in mobile technology,
the e-commerce industry has revolutionized the consumer shopping experience by offering greater
flexibility and efficiency, as well as an extensive range of products, transcending geographical and
temporal boundaries. The seamless integration of digital payment systems and cutting-edge logistics
technology has further propelled the growth of the B2C e-commerce industry. As a result, the global
e-commerce market has been flourishing, reaching a market size of US$5.8 trillion in 2024, as measured
by revenue.
Global B2C cross-border e-commerce entails global B2C e-commerce transactions extending
beyond customs borders. Amidst the thriving e-commerce industry, the global B2C cross-border
e-commerce market has exhibited remarkable resilience, as global trade becomes increasingly
interconnected. Leveraging rapid advancements in digital technology, logistics infrastructure, and
supply chain optimization, the share of the global cross-border e-commerce market within the overall
global B2C e-commerce market continues to expand. In 2024, as measured by revenue, the global B2C
cross-border e-commerce market reached US$1,232.8 billion.
China’s B2C outbound cross-border e-commerce refers to the sales model in which Chinese
enterprises utilize online channels to sell products to consumers overseas. The market size of China’s
B2C outbound cross-border e-commerce business encompasses revenue generated by Chinese
enterprises through online sales channels to countries and regions outside of Mainland China, excluding
any e-commerce revenue derived from sales within Mainland China itself. Leveraging China’s advanced
production capabilities and diverse industrial clusters, e-commerce enterprises have effectively
introduced a wide range of high-quality products to the global market through the Internet, catering to
the diverse demands of international consumers. As global trade continues to integrate, China’s B2C
outbound e-commerce market has demonstrated remarkable market vitality. In terms of revenue, the size
of China’s B2C outbound e-commerce market was US$457.4 billion in 2024, accounting for 7.9% of the
global B2C e-commerce market. Furthermore, the market size is expected to reach US$927.6 billion in
2029, representing 11.4% of the global B2C e-commerce market, with a CAGR of 15.2% from 2024.
INDUSTRY OVERVIEW
– 113 –


--- page 123 ---
9.9 11.7 14.8 19.7
5.9 7.0 8.5 10.1
11.1 13.0 15.0 17.2 19.6 22.0
13.0 18.1
35.4 42.1 49.5 57.7 66.6 76.1
42.6 49.6 57.1 62.3 73.1 82.9 93.0 103.2 113.3 123.0
46.2 55.4 66.9 81.4 94.5 111.8
131.0
152.1
174.9
199.2
102.7
125.7
152.8
184.6
220.5
260.2
304.1
352.1
403.7
458.4
27.1 31.9 37.1 42.8 48.8
220.4
267.6
28.0
386.1
457.4
537.0
624.6
322.9
820.9
927.6
22.7 22.9
719.5
5.5% 5.8%
6.5%
7.2%
7.9%
8.6%
9.4%
10.1%
10.8%
11.4%
21.0% 15.8%
19.6% 16.1%
14.4% 11.0%
28.5% 16.5%
16.9% 14.7%
23.4% 16.4%
20.0% 15.2%
CAGR
2020-2024
CAGR
2024-2029E
Total
Asia
Europe
North America
Latin America
Oceania
Africa
Penetration rate of China’s B2C outbound e-commerce business*
Market size of China’s B2C outbound e-commerce industry, by region, 2020-2029E
USD Billion, %
2023 2024 2025E 2026E2020 2027E2021 2028E2022 2029E
Note: Penetration rate of China's B2C outbound e-commerce business refers to the percentage of China's B2C outbound
e-commerce revenue in relation to global B2C e-commerce revenue.
Source: CIC Report
Main Drivers of China’s B2C Outbound E-commerce Market
Continuous increase in global Internet usage: As network infrastructure continues to advance
and advanced Internet technologies become more widely adopted, users are experiencing faster and
more stable Internet access. The global trend towards information interconnection and digitization has
further accelerated the widespread adoption of the Internet globally, resulting in an increase in the
global Internet penetration rate from 55.4% in 2020 to 60.7% in 2024. As the prevalence of mobile
Internet and the availability of online content continue to increase, individuals will increasingly rely on
the Internet for accessing information, entertainment, and social interactions. This ongoing trend is
projected to fuel the global Internet penetration rate, reaching an estimated 67.3% by 2029. The
continuous growth in global Internet usage is anticipated to result in an expanding consumer base for
the e-commerce industry on a global scale, presenting significant opportunities for businesses to tap
into a larger market and capitalize on the increasing demand for online shopping.
Increasing acceptance of e-commerce by overseas consumers: Owing to the convenient online
shopping experience, the continuous enhancement of global logistics networks and the global
popularization of online shopping, overseas consumers have increasingly embraced the concept of
online shopping. The increasing popularity of online shopping can be attributed to its convenience, with
features such as one-click ordering, doorstep delivery, and seamless digital payment processes.
Additionally, online shopping provides enhanced shopping experiences through live-streaming
demonstrations and short video product showcases. This effectively overcomes the previous limitation
of not being able to try products before purchasing through online channels, which was a common
concern for consumers in the past. Consequently, in terms of revenue, the share of e-commerce sales in
the global retail market has experienced a rapid surge, rising from 17.1% in 2020 to 19.0% in 2024.
With the escalating adoption of online shopping worldwide, the percentage is anticipated to continue its
upward trajectory, reaching an estimated 22.1% by 2029.
INDUSTRY OVERVIEW
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--- page 124 ---
Simultaneously, as e-commerce is increasing accepted, consumers generally are no longer only
satisfied with the goods manufactured locally. Instead, they are actively pursuing novel and convenient
shopping experiences and a diverse range of products from overseas to cater for their personal needs and
preferences, further contributing to the development of the B2C outbound e-commerce industry.
Policy support for the e-commerce industry: The Chinese government has implemented a range of
policies to facilitate the international outbound expansion of Chinese e-commerce enterprises. The
implementation of policies such as the ‘Opinions of the Stabilize General Office of the State Council on
Effectively Making Cross-cycle Adjustments to Further Stabilise Foreign Trade’ (׵
จԈ ) underscores a focus on fiscal support, expediting tax rebates,
promoting new trade forms, alleviating logistics pressures, and supporting key sectors and corporations.
The ‘Opinions on Stabilizing the Scale and Optimizing the Structure of Foreign Trade’ (પਗ̮൱
จԈ) advocated for market expansion, domestic exhibition restoration, increased
financial support, and enhancement of the foreign trade environment. Additionally, initiatives such as
the establishment of comprehensive pilot zones for cross-border e-commerce enterprises have
significantly bolstered the growth of China’s B2C outbound e-commerce industry. In addition, the
Chinese government has implemented favorable policies for cross-border social e-commerce business.
For instance, the ‘Business Development Plan for the 14th Five-Y ear Plan Period’( ‘ɤ̬ʞ ’࢝
ྌ) promoted foreign trade with cross-border e-commerce initiatives, standards, and overseas
warehouse improvements to aim for a 10% trade share by 2025. The ‘Plan for the Development of
E-Commerce The 14th Five-Y ear Plan Period’ ( ‘ɤ̬ʞ ’஝ྌ) strengthened supply
chain service innovation, supported new courier services, and builds an international logistics system.
Furthermore, the ‘Plan for Development of the Digital Economy During the 14th Five-Y ear Plan Period’
(‘ɤ̬ʞ ’஝ྌ) aimed to guide high-quality foreign trade, promote new trade methods,
and support diverse trade services including overseas warehousing. Concurrently, the export destination
countries have also implemented a range of policies, encompassing initiatives to streamline customs
clearance processes and provide tax incentives, to attract goods from other nations through cross-border
e-commerce channels.
China’s supply chain advantage: Leveraging the robust manufacturing infrastructure and resilient
supply chains in Mainland China, products manufactured in Mainland China offer consumers diverse
options, catering to specific consumer requirements. These products boast strong appeal in terms of
quality, pricing, and innovativeness, addressing the diverse consumption needs of overseas consumers
and fostering sustained growth of the industry.
Enhancement of global logistics infrastructure: The ongoing advancements in the global
logistics network have substantially mitigated the costs associated with long-distance global
transportation, enabling cross-border e-commerce enterprises to deliver products more effectively and
conveniently all over the world, and establishing a solid foundation for new market exploration. Such
ongoing advancements have consistently driven the expansion of China’s B2C outbound e-commerce
market.
INDUSTRY OVERVIEW
– 115 –


--- page 125 ---
Competitive Landscape of China’s B2C Outbound E-commerce Market
China’s B2C outbound e-commerce market was fragmented, with the top five players accounting
for less than 20% of total market share, and the Group’s share is 0.1%. The chart below sets forth the
top five participants in China’s B2C outbound e-commerce market in terms of revenue in 2024:
Rank Company
Revenue
generated from
China’s B2C
outbound
e-commerce market,
2024, RMB billion
Market share in
terms of revenue
generated from
China’s B2C
outbound
e-commerce market,
2024, %
1 Company A (1) ~300 ~9.2%
2 Company B (2) ~100 ~3.1%
3 Company C (3) ~60 ~1.8%
4 Company D (4) ~40 ~1.2%
5 Company E (5) ~25 ~0.8%
Notes:
(1) Company A was established in 2012, and originated from Mainland China. It is a B2C outbound e-commerce seller
specializing in fashion products.
(2) Company B was established in 2004, and is headquartered in Dongguan, China. It is a consumer electronics and
mobile communications company.
(3) Company C was established in 2010, and is headquartered in Beijing, China. It is a technology company that offers
smartphones, smart devices, and IoT platforms. It is a listed company on the HKEX.
(4) Company D was established in 2009, and is headquartered in Dongguan, China. It is technology company that
manufactures and offers smartphones, audio devices, and other consumer electronics.
(5) Company E was established in 2013, and is headquartered in Shenzhen, China. It is a major global player in the AI
device ecosystem sector.
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OVERVIEW OF CHINA’S B2C OUTBOUND SOCIAL MEDIA E-COMMERCE MARKET
In 2024, as measured by revenue, the market size of China’s B2C outbound social media
e-commerce industry accounted for 12.7% of China’s B2C outbound e-commerce market. Internet
traffic serves as the cornerstone for cross-border e-commerce sellers to acquire potential consumers and
seize sales opportunities. Larger Internet traffic volumes translate into a larger audience and more
potential consumers, thereby enhancing the likelihood of sales and potential revenue. The magnitude of
traffic acquisition directly impacts the level of product exposure and visitation, while the precision of
traffic acquisition influences the sales conversion rate. Categorized by their source, there are three types
of Internet traffic: organic traffic, platform traffic, and social media traffic. Each traffic source exhibits
distinct advantages, drawbacks, and characteristics. Consequently, e-commerce companies adopt varied
strategies to harness the benefits of the different traffic sources.
• Organic traffic. Organic traffic comprises data flows generated from user searches or visits
without redirection through other intermediary channels, such as direct traffic and search
traffic. Organic traffic is typically sourced from the three avenues: (i) brand awareness,
which attracts consumer visits and eventual purchases; (ii) search engine optimization, or
SEO, aiming to enhance website or product visibility and ranking in search engine results by
optimizing website content, keywords, and external links; (iii) word-of-mouth marketing,
where satisfied customers recommend products or services to others, leading to increased
visits and conversions. Organic traffic is renowned for attracting high-quality consumers
with enduring loyalty. However, acquiring organic traffic is a gradual process that demands
considerable time and effort. A typical example of organic traffic is when consumers enter an
e-commerce independent website by directly typing the website’s URL or searching for the
website or brand’s name on a search engine. For instance, when a consumer types shein.com
into the browser’s address bar or searches for Xiaomi on Google and enters Xiaomi’s
e-commerce independent website, such visits are considered organic traffic.
• Platform traffic. Platform traffic refers to data flows on third-party platforms such as
e-commerce platforms. Platform traffic refers to data flows generally accumulated from (i)
improving rankings of product or brand visibility through effective search engine
optimization strategies and (ii) utilizing paid advertisements on e-commerce platforms. For
platform traffic, consumers usually have a specific type of product in mind and initiate the
search on the platforms themselves. When leveraging platform traffic for sales conversions,
companies focus on highlighting their brand strengths and product advantages to persuade
consumers to select their products among products in the same product category. Platform
traffic presents an opportunity for certain e-commerce companies operating online
storefronts within third-party e-commerce platforms and leverage platform traffic. While
leveraging platform traffic can yield significant benefits, these companies are inherently
reliant on the policies and dynamics of the e-commerce platforms they inhabit. Taking
Xiaomi and Amazon as an example, consumers attracted by Xiaomi’s products showcased on
Amazon is referred to as platform traffic. Xiaomi can increase their platform traffic by
allowing their products to be viewed by more consumers for free or increase exposures
through paid rankings or recommendations.
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• Social media traffic. Social media traffic refers to the data flows across various social media
platforms, such as Facebook, Twitter, LinkedIn, Instagram, Pinterest, particularly relating to
paid advertisements, e-commerce companies can take advantage of their effective precise
targeting capabilities. Social media traffic refers to data flows typically originating from (i)
paid advertisements on social media, and (ii) engaging key opinion leaders (KOLs) and/or
key opinion consumers (KOCs) to promote products across social media platforms. However,
it is crucial to acknowledge that paid advertisements operate within a competitive landscape
and can incur significant costs. Advertisers must possess refined precise marketing skills to
maintain its competitive edge. When contrasted with organic and platform traffic, consumers
attracted through social media traffic often lack a specific target product in mind. As a result,
sellers must proactively stimulate consumers’ purchase intent, as individuals attracted
through social media traffic may require additional persuasion to complete a purchase.
Overview of the social e-commerce business model that discovers target customers actively and
precisely
In traditional e-commerce operations, consumers actively seek products or services to meet their
needs after becoming aware of them. On the other hand, the social e-commerce business model that
discovers target customers actively and precisely requires e-commerce sellers to identify consumer
needs based on consumer profiles and to guide them towards final purchases.
With the advent of e-commerce in late 1990s, the traditional sales approach meets consumers’
initial needs for shopping diversity and convenience. However, with the rapid expansion of the
e-commerce landscape, there has been a surge in product variety and information, challenging the
efficacy of the traditional model. Simultaneously, with advancements in big data and artificial
intelligence technologies, various social media platforms have gained access to more extensive
consumer preferences and behavioural data, enabling the viability of the social e-commerce business
model that discovers target customers actively and precisely. The proliferation of interest-driven
e-commerce and live-streaming sales channels further propels the evolution of this model.
Consequently, the social e-commerce business model that discovers target customers actively and
precisely has become a trend. This model adeptly assists consumers in uncovering latent needs,
effectively complementing the traditional model and bringing fresh opportunities for both businesses
and consumers.
Under this dynamic landscape, different e-commerce players are actively exploring the
implementation of this model. For instance, leading e-commerce platforms, such as Amazon, are
enhancing their product recommendation capabilities based on user profiles. Social media platforms,
such as TikTok Shop, are swiftly expanding their market presence in the e-commerce industry through
the social e-commerce business model that discovers target customers actively and precisely.
Meanwhile, independent e-commerce websites are also diligently expanding their advertising and
marketing strategies, exploring novel applications of the social e-commerce business model that
discovers target customers actively and precisely. Precision and efficiency in advertisement placements
represent a crucial capability for independent e-commerce websites to “discover” potential consumers.
Independent e-commerce websites started to identify their target customer segments based on their
brand positioning and product mix. This involves detailed analysis of the target customers’ preferences
and behaviours. In particular, independent e-commerce websites need to adeptly disseminate engaging
or informative content to potential customers who are likely to show interest based on the understanding
of the target customers’ persona commonly through precise advertisement pushing and/or collaboration
with KOLs or KOCs to tap into consumers’ potential purchase intentions.
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Both of the social e-commerce business model that discovers target customers actively and
precisely and the traditional model, are important components of the e-commerce ecosystem. However,
they exhibit significant differences in terms of user initiative, selling strategies, and user experience.
The following chart sets forth the differences between the traditional model and the social e-commerce
business model that discovers target customers actively and precisely:
The traditional model
The social e-commerce business
model that discovers target
customers actively and precisely
User initiative Consumers typically have clear
shopping targets and thus actively
search and select products.
Consumers usually do not have
specific shopping targets and
receive product information while
accessing non-shopping-related
information.
Selling strategies Focus on Search Engine
Optimization, or SEO, and
product diversity, emphasizing the
effectiveness of their products in
meeting consumer needs when
consumers search for product
information.
Focus on user behaviour analysis
and targeted marketing strategies,
assisting consumers in uncovering
their needs and stimulating their
desire to purchase, thereby
driving sales conversions.
User experience E-commerce providers typically
focus on efficient shopping
experience when users have clear
goals. Consumers expect to
quickly find products that meet
their needs.
E-commerce providers generally
aim to provide a more
personalized shopping experience,
enabling consumers to discover
products they may be interested in
but have not previously sought or
have not considered important.
In recent years, driven by the swift evolution of social media platforms and the sustained growth in
their user base and engagement, these platforms have emerged as pivotal channels for cross-border
e-commerce sellers to generate traffic and drive sales conversions. Social media traffic is recognized as
the fastest-growing source of traffic in China’s B2C outbound e-commerce market. As social media
platforms continue to play an increasingly pivotal role for Internet users, China’s B2C outbound social
media e-commerce market is poised for further development. In 2024, as measured by revenue, the
market size of China’s B2C outbound social media e-commerce industry reached US$58.2 billion,
accounting for 12.7% of China’s B2C outbound e-commerce market. By 2029, the market size is
anticipated to expand to US$130.9 billion, reflecting a CAGR of 17.6% from 2024. It is projected that
by 2029, the market size of China’s B2C outbound social media e-commerce market will be
approximately 14.1% of China’s B2C outbound e-commerce market.
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22.9% 17.6%
17.9% 13.6%
20.1% 15.1%
20.0% 15.2%
150.9 184.4 220.8 264.2 314.3 368.8
428.8
493.7
563.1
636.0
44.0
51.9
63.0
74.1
85.0
98.4
112.9
128.2
144.3
160.7
31.3
39.0
47.8
58.2
69.8
82.9
97.5
113.6
130.9
220.4
267.6
322.9
386.1
457.5
537.0
624.6
719.5
820.9
927.6
25.5
11.6% 11.7%
12.1% 12.4% 12.7% 13.0% 13.3% 13.6% 13.8% 14.1%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Market size of China’s B2C outbound e-commerce industry, 2020-2029E
USD Billion CAGR
2020-2024
CAGR
2024-2029E
Total
Social media traffic
Organic traffic
Platform traffic
Social media e-commerce penetration rate*
Note: Social media e-commerce penetration rate refers to the percentage of China's B2C outbound social media
e-commerce revenue in relation to China’s B2C outbound e-commerce revenue.
Source: CIC Report
China’s B2C outbound social media e-commerce refers to the business model where domestic
enterprises in Mainland China utilize social media platforms for product promotion and traffic
acquisition, and convert this traffic into sales through transactions with overseas consumers conducted
outside the social media platforms. Diverging from the sales models observed in the other two traffic
source patterns, where consumers need to proactively search for products based on their planned needs,
cross-border social media e-commerce enterprises actively identify potential consumers and stimulate
their demand through the prominent display of product features through advertisements on social media
platforms to encourage consumers from these platforms to purchase their products. As a result, China’s
B2C outbound social media e-commerce model enables companies to deliver personalized product
recommendations and drive sales by understanding consumers’ interests and preferences.
B2C outbound social media e-commerce enterprises possess the flexibility to strategically allocate
resources across various social media platforms, adapting to fluctuations in traffic cycles and
adjustments in platform policies. This flexibility empowers them to achieve optimal traffic acquisition
outcomes under diverse market conditions. Furthermore, these enterprises can leverage the global reach
of social media platforms to access more countries and regions, creating abundant opportunities for
cross-regional business expansion and fostering sustained market growth. Simultaneously, through the
implementation of precision marketing, B2C outbound e-commerce enterprises can accurately identify
the intended audience for a product, effectively connecting with consumers who demonstrate a high
willingness to purchase. Given the preferences and strong demand for the product, target consumers
demonstrate a relatively lower level of price sensitivity. By strategically reaching these consumers,
China's B2C outbound social media e-commerce enterprises can implement an optimized pricing
strategy.
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24.5% 19.0%
22.7% 17.5%
16.2% 12.1%
33.3% 20.0%
17.8% 15.4%
29.1% 18.1%
22.9% 17.6%
0.3 0.4 0.5 0.8 0.9 1.1
0.8
5.8 7.0 8.4 10.0 11.8
5.5 6.4 7.5 8.5 10.1 11.6 13.1 14.7 16.3 17.9
5.3 6.4 7.9 10.0 11.9 14.3 16.9
19.9
23.1
26.6
12.1 15.1
19.2
23.6
29.1
35.3
42.5
50.6
59.6
69.5
2.11.5 2.81.1 3.61.4 4.71.5 1.8 2.11.3 2.41.5 2.81.8 3.12.1
25.5
39.0
47.8
58.2
69.8
31.3
97.5
113.6
130.9
0.9
82.9
47.5% 48.3% 49.1% 49.3% 50.0% 50.6% 51.2% 51.9% 52.5% 53.1%
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E2020
Market size of China’s B2C outbound social media e-commerce industry, by region, 2020-2029E
USD Billion CAGR
2020-2024
CAGR
2024-2029E
Total
Asia
Europe
North America
Latin America
Oceania
Africa
The proportion of Asia’s market*
Note: The proportion of Asia’s market refers to the percentage of China's B2C outbound social media e-commerce
business in the Asian market in relation to China’s B2C outbound social media e-commerce market.
Source: CIC Report
OVERVIEW OF CHINA’S B2C OUTBOUND SOCIAL MEDIA E-COMMERCE BUSINESS IN
THE ASIAN MARKET
China’s B2C outbound social media e-commerce businesses that sell products to consumers in
Asia (excluding Mainland China) are poised for robust growth due to its significant population base,
increasing Internet penetration, expanding middle-class population, and comparatively lower
cross-border logistics costs from Mainland China to the rest of Asia. Unlike mature e-commerce
markets globally, the e-commerce landscape in Asia outside of Mainland China is still in its early
development stage. Compared to consumers in Europe and America who are accustomed to purchasing
from platform-based e-commerce and well-known independent online stores, consumers outside
Mainland China in Asia are gradually adapting to the evolving online shopping landscape, with a higher
acceptance of social media commerce. As a result, e-commerce models that are highly integrated with
social media traffic are experiencing accelerated growth in regions outside Mainland China in Asia.
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In 2024, the social media penetration rate in Asia, excluding Mainland China, reached
approximately 50.7%, showcasing a notable increase from roughly 42.6% in 2020. With the ongoing
proliferation of the mobile Internet in the Asian region, it is poised to exhibit significant growth
potential in the future. It is anticipated that the social media penetration rate in Asia, excluding
Mainland China, will increase to 55.0% by 2029, opening up even more opportunities for social media
e-commerce. Consequently, Asia has demonstrated tremendous strategic value for China’s B2C
outbound social media e-commerce industry and has emerged as one of its key export destinations. In
2024, in terms of revenue, the market size of China’s B2C outbound social media e-commerce in the
Asian market amounted to US$29.1 billion. It is anticipated that the market size will increase to
US$69.5 billion in 2029, with a CAGR of 19.0% from 2024. This growth rate surpasses the rest of
China’s B2C outbound e-commerce industry in Asia, highlighting the sector’s strong performance and
potential.
12.1 15.1 19.2 23.6
29.1
35.3
42.5
50.6
59.6
69.5
11.8% 12.0%
12.5% 12.8% 13.2% 13.6% 14.0% 14.4% 14.8% 15.2%
24.5% 19.0%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Market size of China’s B2C outbound social media e-commerce in the Asian market, 2020-2029E
USD Billion
CAGR
2020-2024
CAGR
2024-2029E
China’s B2C outbound cross-border social media e-commerce in the Asian market
Social media e-commerce penetration rate in the Asian market*
Note: Social media e-commerce penetration rate in the Asian market refers to the percentage of China's B2C outbound
social media e-commerce revenue generated from the Asian market in relation to China’s B2C outbound e-commerce
revenue generated from the Asian market.
Source: CIC Report
Main Drivers of China’s B2C Outbound Social Media E-commerce Business in the Asian Market
The expansion of traffic on social media platforms: The continuous expansion of user bases and
the increasing time spent by users on social media platforms have contributed to a sustained growth in
social media traffic. The heightened user activity on social media platforms not only enhances potential
consumer exposure but also encourages businesses to leverage social media for sales purposes.
Continuous advancements in data analysis and advertising technology: The ongoing evolution of
data analysis and advertising technology is marked by the utilization of advanced big data and
large-scale modeling technologies on social media platforms. These technologies have enhanced the
platforms’ ability to precisely comprehend consumer needs and identify potential consumers, thereby
increasing consumer purchasing motivation and improving conversion rates.
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Enhancing consumer trust in social media platforms: Social media platforms, fostering a diverse
range of content within a relaxed environment, uphold a notable standard of content credibility and
transparency, which has resulted in a rising level of consumer trust in the content disseminated on these
platforms. The growing confidence consumers place in social media platforms inclines them toward
initiating the purchasing process through these channels, thereby steadily reinforcing the role of social
media platforms as a primary gateway for shopping traffic.
Main Trends of China’s B2C Outbound Social Media E-commerce Business in the Asian Market
Operational digitization and intelligence: B2C outbound social media e-commerce enterprises
directly engage with end consumers, generating substantial sales data for each product. The strategic
application of technologies, including artificial intelligence, big data analysis, and blockchain,
facilitates the effective analysis of massive datasets. This, in turn, enables improvements in various
areas such as product selection, marketing, supply chain management, and online customer service.
Consequently, this enhances operational efficiency and delivers a more intelligent user experience.
Simultaneously, the difficulty in analyzing extensive data volumes and intricate supply chains poses
notable barriers for small-scale e-commerce enterprises looking to enter the market.
Multi-platform approach: In the context of rapid technological advancements and evolving user
demands, a plethora of new social media platforms are continually emerging. Each platform possesses
distinctive features and caters to specific user groups, offering e-commerce businesses a range of
diverse traffic channels. Leading China’s B2C outbound social media e-commerce enterprises are
capable of delivering personalized recommendations to consumers with different interests and
preferences on different social media platforms. By strategically promoting their products across a
diverse spectrum of social media platforms, these enterprises effectively reach a broader target
consumer audience allowing them to maintain and expand their business scale and respond adaptively to
the dynamic and changing landscape of consumer preferences.
Enhancing product portfolio diversification: With the advancement of global logistics
technology, cross-border e-commerce enterprises are now more adept at efficiently managing a diverse
range of product categories. In China’s B2C outbound social media e-commerce market, there has been
a notable shift away from a singular focus on best-selling categories of products. Instead, enterprises are
consistently broadening the scope and depth of their product offerings. This strategic diversification of
product portfolios aligns with the evolving and diverse consumption needs of consumers, illustrating a
commitment to meeting a wider array of preferences in the market. Furthermore, each consumer
possesses unique personal preferences, interests, and values, resulting in diverse demands for products
and services. A diversified product portfolio provides consumers with more choices, facilitating the
fulfillment of their individualized needs and presenting businesses with greater expansion opportunities.
Strategic emphasis on brand development: Prominent B2C outbound social media e-commerce
enterprises strategically attract and retain consumers through a concerted effort to enhance product
quality, optimize customer service, and diversify promotional channels on various social media
platforms. This systematic approach enables these enterprises to gain trust and recognition from
consumers and incrementally build their own brands, elevating the competitiveness of their products,
and ultimately culminating in the attainment of a brand premium.
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Competitive Landscape of China’s B2C Outbound Social Media E-commerce Business in the Asian
Market
In terms of revenue in 2024, China's B2C outbound social media e-commerce market accounted
for 12.7% of China's B2C cross-border e-commerce market and 2.1% of the overseas B2C e-commerce
market. The total market share of the top five China’s B2C outbound e-commerce players was
approximately 6.5% in terms of revenue generated through social media e-commerce business in Asia in
2024. V arious players in the market have different focuses on categories and sales channels. In general,
cross-border e-commerce companies that specialize in all categories possess the advantage of swiftly
adapting their sales strategies to meet changing consumer demands. This flexibility, coupled with their
diverse product selections, enables them to maintain a consistent revenue stream. Additionally,
compared to cross-border e-commerce companies reliant on e-commerce platforms, those with
independent e-commerce websites face fewer restrictions, therefore exhibiting stronger resilience to
risks. Furthermore, cross-border e-commerce enterprises with advanced data intelligence capabilities
will gain additional advantages in operational efficiency and profitability.
In terms of revenue generated through social media e-commerce business in Asia in 2024, the
Group ranked second among China’s B2C outbound e-commerce players, accounting for a market share
of 1.3%. The chart below sets forth the top five participants in China’s B2C outbound social media
e-commerce business in the Asian market in terms of revenue in 2024:
Rank Company
Revenue generated
from China’s B2C
outbound social
media e-commerce
business in the
Asian market,
2024, RMB billion
Market share in
terms of revenue
generated from
China’s B2C
outbound
social media
e-commerce
business in the
Asian market,
2024, %
1 Company A ~9.5 ~4.6%
2 The Group 2.7 1.3%
3 Company F (1) ~0.5 ~0.3%
4 Company G (2) ~0.4 ~0.2%
5 Company H (3) ~0.3 ~0.2%
Source: CIC Report
Notes:
(1) Company F was established in 2011, and is headquartered in Changsha, China. It is a player in charging technology
and consumer products that support premium audio, home entertainment, home security and more. It is a listed
company on the SZSE.
(2) Company G was established in 2009, and is headquartered in Guangzhou, China. It is a B2C outbound e-commerce
company.
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(3) Company H was established in 2014, and originated from Mainland China. It primarily engages in B2C outbound
e-commerce operations specializing in children’s apparel.
Entry Barriers of China’s B2C Outbound Social Media E-commerce Market
Digitalization and AI application capability: By enhancing their digitalization and AI application
capabilities, enterprises can gain profound insights into industry trends, align themselves with evolving
market demands, and enhance their operational efficiency. Furthermore, the long-term accumulation of
diverse data serves as a crucial asset for enterprises to effectively leverage digitalization and AI
application capabilities. New market entrants often lack access to reliable and precise data, making it
challenging to establish barriers to digitalization and AI application capabilities solely through the
acquisition of software systems.
Precision targeting capability: B2C outbound cross-border social media e-commerce employs a
sales model centered on drawing consumers from various social media platforms and converting this
traffic into revenue. As a result, the initial and critical phase of the sales chain involves attracting
consumers and seamlessly channeling traffic. To achieve this, leading B2C outbound e-commerce
enterprises strategically implement personalized marketing strategies, by providing product
recommendations targeting individual consumer needs through precise advertising. Through precision
targeting capabilities, China’s B2C outbound social media e-commerce enterprises enjoy lower
advertising costs through optimization of the conversion efficiency of their advertisements. New
entrants without precision targeting capabilities may face challenges in controlling customer acquisition
costs and achieving a favorable profit margin.
Product selection capability: Precisely discovering and recommending relevant products can
captivate consumers and kindle their purchasing interest, leading to increased click-through and sales
conversion rates on landing pages. This fosters customer acquisition and enhances the return on
marketing investment. Additionally, a more precise alignment of products with consumer needs
improves product appeal, accelerates inventory turnover, reduces inventory risks, and alleviates
operational cost pressures. The constrained industry experience and limited sales data of players under
mid-tier present challenges in achieving precise product selection, thereby impeding their ability to
scale up production.
Localization capability: Due to inherent historical and cultural differences, global regional
markets exhibit substantial variations in language, payment methods, logistics, consumption habits, and
preferences. To adeptly navigate these distinctions in regional markets, B2C outbound social media
e-commerce enterprises must implement tailored strategies based on regional market characteristics and
invest in localization technologies such as translation capabilities and having dedicated team for
different regions. This approach enhances global consumer acceptance and broadens their presence in
regional markets.
Multi-platform management capability: Social media platforms display unique user
characteristics and traffic patterns, with the dynamics of user traffic evolving over time. Top-tier
China’s B2C outbound social media e-commerce enterprises need to properly comprehend these traffic
cycles, closely monitor trends on each social media platform, consistently refine traffic deployment
strategies, and judiciously allocate resources across different social media platforms.
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Supply chain management capability: Enterprises need robust supply chain management
capabilities to swiftly adapt to shifts in market demand. By employing precise demand forecasting and
timely information communication, these enterprises can seamlessly integrate global resources and
adjust inventory, ensuring both product quality and a reliable supply. During the period from 2022 to
2024, the average inventory-to-sales ratio for B2C outbound e-commerce companies in China was
approximately 15%. Companies with stronger supply chain management capabilities are able to achieve
a lower inventory-to-sales ratio, thereby reducing operational costs and enhancing resilience to
inventory write-down risks. Additionally, given the extensive logistics chain in cross-border
e-commerce, dominant enterprises must forge effective global logistics partnerships to achieve prompt
and secure transportation of their products to consumers.
OVERVIEW OF PAPER CONSUMER PACKAGING MARKET IN MAINLAND CHINA
Paper packaging refers to enclosing or protecting products made of paper-based materials, used
for distribution, storage, sale, and usage. As a prominent packaging type, paper packaging possesses
attributes such as lightweight, high pliability, environmentally friendly, ease of processing, excellent
print adaptability, and logistical convenience. Widely utilized in industries including food and beverage,
catering, daily necessities, consumer electronics, industrial sectors, healthcare, and logistics, paper
packaging plays a pivotal role in meeting diverse packaging needs and adds value to the products that
packaging is used for. With the development of China’s economy, the promotion of environmental
protection initiatives, and advancements in paper packaging technology, China’s paper packaging
industry has been developing steadily. In 2024, the market size reached RMB613.1 billion, as measured
by revenue.
Categorized by functionality, paper packaging can be divided into industrial packaging and
consumer packaging. Industrial packaging refers to the materials and containers used for safeguarding,
storing, transporting, and handling goods. Its design prioritizes cost-effectiveness and functionalities
during storage and transportation, while placing minimal emphasis on graphic and structural design
requirements. Consumer packaging refers to the packaging that end consumers directly contact with and
is employed at terminal sales units. This category encompasses packaging products such as color paper
packaging cartons/boxes, eco-friendly paper bags, food packaging, paper cups, multi-packs, and printed
corrugated cartons. Characterized by their intricate design and diverse structures, consumer packaging
aims to elicit consumer purchasing behavior and emphasize notable marketing and display features. As
a result, paper consumer packaging particularly prioritize excellence in marketing design. Moreover,
these packaging products necessitate strict oversight of factors in other business processes such as raw
material quality, production technology, and timely packaging product transportation and logistics in
subsequent stages.
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3.3% 4.6%
-0.2% 2.9%
1.1% 3.6%
368.1
250.3
398.2
245.6
373.1
237.7
353.6
248.3
364.8
260.8
376.9
273.5
388.8
218.0
286.4
400.5
299.5
412.0
311.5
421.4
586.1
648.5 618.7 591.3 613.1 637.7 662.3 686.9 711.5 732.9
2020 2021 2022 2023 2024 2025E 2027E 2028E 2029E2026E
CAGR CAGR
2020-2024 2024-2029E
Total
Market size of paper packaging solutions in China by functionalities, 2020-2029E
RMB billion
Consumer packaging
Industrial packaging
Amidst intensifying competition and transformations in the consumer market, the marketing value
of paper consumer packaging is increasingly pronounced. Paper consumer packaging contributes to
elevating the product experience, swiftly establishing brand identity, and actively participating in
differentiated competition through innovative packaging. Consequently, downstream industries are
consistently augmenting their investments in paper consumer packaging. The market size of paper
consumer packaging in Mainland China was RMB248.3 billion in 2024, as measured by revenue. The
market size is notably impacted by fluctuations in raw material prices, whereas the processing fees
associated with paper consumer packaging have exhibited a comparatively consistent growth pattern.
Fueled by the evolution of packaging marketing concepts and heightened investments, the market size
of paper consumer packaging in Mainland China is poised for sustained expansion, and is projected to
reach RMB311.5 billion by 2029.
127.9 158.0 141.0 123.1 123.3 129.7 136.2 143.0 149.9 155.7
90.1
92.4 104.6 114.6 125.0 131.1 137.3 143.5 149.6 155.8218.0
250.3 245.6 237.7 248.3 260.8 273.5 286.4 299.5 311.5
8.5% 4.5%
-0.9% 4.8%
3.3% 4.6%
CAGR CAGR
2020-2024 2024-2029E
Total
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Market size of paper consumer packaging solutions in China, 2020-2029E
RMB billion
Processing fee1
Paper cost
Note: Processing fees refer to the additional revenue components apart from the paper cost.
Source: CIC Report
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OVERVIEW OF FMCG PAPER CONSUMER PACKAGING MARKET IN MAINLAND CHINA
Paper consumer packaging can be primarily used in FMCG and other consumer goods, including
cigarettes, consumer electronics and medicine. FMCG paper consumer packaging refer to a suite of
paper consumer packaging products specifically catering for the FMCG (fast-moving consumer goods)
industry.
72.4 81.6 78.6 77.2 78.0 80.4 82.8 85.0 87.1 88.8
145.6
168.7 167.0 160.4 170.3 180.4 190.8 201.4 212.4 222.7
218.0
250.3 245.6 237.7 248.3 260.8 273.5 286.4 299.5 311.5
4.0% 5.5%
1.9% 2.6%
3.3% 4.6%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
CAGR CAGR
2020-2024 2024-2029E
Total
FMCG
Other consumer goods1
Market size of paper consumer packaging solutions in China by application fields, 2020-2029E
RMB billion
Note 1: Other consumer goods include cigarette, consumer electronics, medicine, and others.
FMCG refers to consumable products characterized by a short lifespan and rapid consumption,
encompassing categories such as food and beverage, catering, daily necessities, wine and spirits, and
others. As high-frequency consumer goods in everyday life, FMCG is characterized by substantial
consumption volume, thereby creating significant demand for packaging products. Paper packaging also
impresses FMCG consumers with its attributes, including lightweight, environmentally friendly, and
high esthetics value. Amidst an increasing emphasis on environmental sustainability and consumer
experience, consumers increasingly prefer paper packaging.
5.7% 5.3%
11.6% 6.6%
0.6% 6.1%
0.1% 6.3%
0.2% 3.1%
4.0% 5.5%
12.3 14.3 14.2 12.8 12.4 12.9 13.3 13.7 14.1 14.5
10.6 12.6 12.8 10.7 10.6 11.3 12.1 12.8 13.6 14.4
41.0 47.3 46.7 42.8 42.0 44.7 47.6 50.5 53.5 56.4
12.2 12.3 12.8 16.1 17.2 18.4 19.7 21.0 22.2
71.4
82.3 81.1 81.3 89.2 94.2 99.4 104.7 110.1 115.2
10.4
145.6
168.7 167.0 160.4 170.3 180.4
190.8
201.4
212.4
222.7
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Total
Food and beverage
Catering
Daily necessities
Wine and spirits
Others
CAGR CAGR
2020-2024 2024-2029E
Market size of FMCG paper consumer packaging solutions in China by product categories, 2020-2029E
RMB billion
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Value Chain of FMCG Paper Consumer Packaging Industry in Mainland China
The value chain of FMCG paper consumer packaging industry in Mainland China includes raw
material suppliers, FMCG paper consumer packaging providers, and sales and additional services.
Given the varied applications and contexts of use for paper packaging, downstream clients exhibit
distinct demands for these items. To better cater to the needs of these customers, leading paper
packaging enterprises extend their offerings beyond the production of paper packaging products, and
provide a comprehensive suite of services, including marketing strategies, product design, process
design, technology planning and transportation and logistics, all tailored to enhance client satisfaction
and product effectiveness. The following diagram illustrates the value chain of FMCG paper consumer
packaging industry in Mainland China.
Raw Material Suppliers FMCG Paper Consumer
Packaging Providers Sales and Additional Services
• Major raw materials for paper consumer
packaging are paperboard, ink, and other
auxiliary materials.
 Leading providers offer diverse services to
downstream clients, including  marketing
strategies, product design, process design,
technology planning, production and
transportation and logistics.
 The paper packaging is sold to
enterprises in the FMCG industry, and
customized after-sales services are
provided.
Food & beverage
Catering
Daily necessities
Wine & spirits
Others
Marketing strategies
Product design
Process design
Technology
planningPaperboard
Ink
Other auxiliary
materials
White cardboard
Linerboard
Duplex board
Others
Production
Transportation and
logistics
Value chain of FMCG paper consumer packaging industry in Mainland China
Source: CIC Report
Market Size of FMCG Paper Consumer Packaging Industry in Mainland China
FMCG paper consumer packaging plays a crucial role as the primary interface between consumers
and FMCG products during the purchasing process. It serves as a pivotal element to influence consumer
buying decisions and as an ideal medium for brands to convey brand philosophies and implement
marketing strategies. Consequently, the FMCG industry continues to witness a sustained increase in
investment in paper consumer packaging. The market size of FMCG paper consumer packaging in
Mainland China has grown from RMB145.6 billion in 2020 to RMB170.3 billion in 2024, in terms of
revenue. With the continual realization of the marketing value inherent in FMCG packaging, the market
size of FMCG paper consumer packaging is expected to experience sustained expansion, and is
projected to reach RMB222.7 billion by 2029.
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9.5% 5.4%
-0.8% 5.6%
4.0% 5.5%
83.0
65.1
103.7
74.2
92.9
81.4
79.1
90.1
80.3
95.4
85.0
100.8
90.0
62.6
106.3
95.2
111.8
100.6
117.4
105.2
145.6
168.7 167.0 160.4 170.3 180.4
190.8
201.4
212.4 222.7
2020 2021 2022 2023 2024 2025E 2027E 2028E 2029E2026E
Market size of FMCG paper consumer packaging solutions in China, 2020-2029E
RMB billion
Processing fee1
Paper cost
CAGR CAGR
2020-2024 2024-2029E
Total
Note: Processing fees refer to the additional revenue components apart from the paper cost.
Source: CIC Report
Main Drivers of FMCG Paper Consumer Packaging Market in Mainland China
Acceleration in the introduction of new product releases: With the continuous enhancement of
consumer purchasing power, consumers have increasingly higher expectations for FMCG products. To
meet the constantly evolving product demands, the FMCG industry has been experiencing a surge in
innovative FMCG products, encompassing new brands, flavors, and formulations. Furthermore, there
has been a rapid increase in the frequency of product category updates. Consequently, the FMCG
industry’s evolving requirements for paper consumer packaging have generated additional demand in
the FMCG paper consumer packaging market in Mainland China.
Environmental policies expanding the utilization of paper packaging: Amidst growing
environmental awareness, Mainland China has consistently introduced environmental policies in the
packaging sector. These ongoing initiatives continue to drive the substitution of fossil-based products
such as plastic packaging with renewable and environmentally friendly materials such as paper. For
example, the ‘Opinions on Further Strengthening the Governance of Plastic Pollution’ (ආɓӉ̋
จԈ) advocate for the widespread adoption of environmentally friendly
alternatives, including cloth bags, paper bags, and other non-plastic products, in locations such as
shopping malls, supermarkets, pharmacies, bookstores, and similar establishments. In addition, the
‘14th Five-Y ear Action Plan for Plastic Pollution Control’ ( ‘ɤ̬ʞ ’)
advocates for scientifically and prudently promoting the use of plastic alternative products. Fully
consider the environmental impacts throughout the life cycle of bamboo and wood products, paper
products, biodegradable plastic products, etc., and improve the quality and food safety standards of
relevant products accordingly. Paper packaging, distinguished by its natural biodegradability,
exceptional packaging performance, and cost-effectiveness, emerges as a primary alternative to plastic
packaging. The continuous displacement of plastic packaging by paper packaging in the FMCG
industry, propelled by environmental considerations, is poised to create an expanding market space for
FMCG paper consumer packaging.
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Enhanced added value of packaging: In the FMCG industry, competition among similar products
is intensifying. The formulation of a brand philosophy is pivotal for establishing product differentiation,
meeting the ever-expanding consumer demands for experiential and emotional value, and ultimately
fostering brand loyalty. To bolster brand awareness, FMCG enterprises increasingly prioritize the
outward manifestation of brand philosophy, highlighting the increasingly significant role of consumer
packaging in marketing. Consequently, marketing design for FMCG consumer packaging is consistently
becoming more sophisticated and the demand for added value of consumer packaging is increasing,
leading to a continuous uptrend in industry investments in FMCG paper consumer packaging.
Main Trends of FMCG Paper Consumer Packaging Industry in Mainland China
Market consolidation: The demand for environmentally friendly technologies in FMCG paper
consumer packaging continues to grow alongside the increasing environmental consciousness and
heightening environmental protection requirements. Leading enterprises in this sector demonstrate
robust environmental production capabilities, enabling better adaptability to evolving market demands.
Conversely, smaller players at the industry’s tail end, lacking the necessary production environments
and technologies, may be forced to exit the market. Simultaneously, stricter standards for environmental
protection and hygiene contribute to the higher demand for quality raw materials, leading to a gradual
increase in raw material costs in the industry. Packaging enterprises without advanced technology and
effective cost control capabilities may find their competitive edge diminishing. In contrast, leading
enterprises with advanced technology and strong bargaining power over raw materials are positioned to
dominate, which could result in a more pronounced industry concentration and the prevalence of key
players.
In-depth service enhancement: As paper consumer packaging gains prominence in the FMCG
industry, FMCG paper consumer packaging providers are increasingly involved in the packaging
development process. Leading enterprises can provide one-stop paper packaging products and services,
covering marketing design, process design, technology planning, production, and transportation and
logistics continually enhancing service depth. To provide marketing designs and production
management tailored to the characteristics of packaging products and clients’ demand, the providers
need to possess an in-depth understanding of packaging materials, structures, and processes.
Furthermore, the provision of in-depth services places heightened demands on the technological
capabilities across various facets of providers, encompassing marketing design, process design,
technology planning and production. Leading packaging enterprises actively participate in various
stages of the packaging development process, enhancing the collaboration effect of each stage and
production efficiency, thereby providing significant support to FMCG enterprises.
Category coverage capability enhancement: With ongoing product innovation in the FMCG
industry, the demand for more diverse paper consumer packaging categories from FMCG enterprises is
expected to continue to rise. To better serve FMCG clients, FMCG paper consumer packaging providers
are expected to consistently broaden the spectrum of packaging product types. For instance, paper-based
packaging for fast food is rapidly replacing plastic cups, plastic food containers, and other plastic
consumer packaging products, thereby presenting significant market growth opportunities. Companies
need to expand their production capacity for paper packaging for quick service restaurants and enhance
its waterproof and grease-resistant properties to achieve business expansion. Meanwhile, enterprises
with stronger category coverage capabilities are better equipped to meet the evolving packaging needs
of existing clients. They also have the potential to attract more clients with similar needs, thereby
securing additional orders and revenue. Consequently, FMCG paper consumer packaging providers with
comprehensive category production capabilities are poised to gain a significant advantage in the market.
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Competitive Landscape of FMCG Paper Consumer Packaging Industry in Mainland China
In terms of revenue in 2024, FMCG paper consumer packaging market in Mainland China
accounted for 68.6% of paper consumer packaging market in Mainland China, and the latter accounted
for 10.6% of packaging market in Mainland China. The total market share of the top five participants in
China’s FMCG paper consumer packaging industry was approximately 4.5% in terms of revenue in
2024. As environmental protection and automated production requirements intensify, leading
enterprises are well-positioned to capitalize on this trend. There is an anticipation that market
concentration will persistently rise in the future.
The chart below sets forth the top five participants in China’s FMCG paper consumer packaging
industry in terms of revenue in 2024. The Group is the largest FMCG paper consumer packaging
provider in Mainland China, in terms of revenue in 2024.
Ranking Company
Revenue generated
from FMCG paper
consumer packaging
in 2024
(RMB billion) Market share
1 The Group 2.0 1.2%
2 Company I (1) ~1.7 ~1.0%
3 Company J (2) ~1.4 ~0.8%
4 Company K (3) ~1.4 ~0.8%
5 Company L (4) ~1.2 ~0.7%
Source: CIC Report
Notes:
(1) Company I was established in 1988, and is headquartered in Shanghai, China. It is centered on packaging and
printing, and supported by FMCG distribution, import and export trade, real estate, and venture capital. It is a listed
company on the SZSE.
(2) Company J was established in 1990, and is headquartered in Guangdong Province, China. It mainly provides folding
cartons, rigid boxes, molded pulp and promotional tools, etc. It is a listed company on the SZSE.
(3) Company K was established in 1996, and is headquartered in Guangdong Province, China. Its products mainly
include boutique boxes, color boxes, paper boxes, cigarette packs, wine packaging and leather boxes, etc.
(4) Company L was established in 1996, and is headquartered in Shenzhen, China. It is a packaging provider mainly
providing color boxes and gift boxes. It is a listed company on the SZSE.
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Entry Barriers of FMCG Paper Consumer Packaging Industry in Mainland China
One-stop service capability: The FMCG paper consumer packaging providers demonstrate their
overall strength through their capability to provide one-stop service, encompassing marketing design,
production, and transportation and logistics, thereby fostering coordination and efficiency throughout
diverse phases of packaging development. Simultaneously, the one-stop service capability substantially
reduces the number of parties engaged in the packaging development process, thereby reducing both
time and costs for customers who would otherwise contract with multiple service providers. In effect,
leading providers can increase customer satisfaction levels and add value to packaging production
through the provision of one-stop services. This comprehensive service capability presents a
considerable challenge for other market participants, as most of them often grapple with the
complexities of providing such services, impeding their ability to establish advantageous customer
relationships and competitive service pricing.
Top-tier client coverage: Top-tier FMCG enterprises have forged partnerships with numerous
prominent clients, ensuring a consistent revenue flow through the steady demand for packaging from
these major FMCG players. Concurrently, these leading FMCG companies set higher benchmarks for
the technological and quality aspects of paper consumer packaging, compelling providers with certain
scale to continually enhance their research and development capabilities and technical expertise.
Furthermore, the experience gained from servicing top-tier clients not only validates the corporate
strengths of FMCG paper consumer packaging providers but also serves as a magnet for potential
clients, thereby facilitating the expansion of their business footprint. Conversely, relatively small
enterprises encounter formidable challenges in their business development endeavors due to the absence
of resources associated with top-tier clients.
Process design and technology planning capability: Process design plays a pivotal role in
marketing design for FMCG paper consumer packaging and carries substantial importance in achieving
the functionality, structure, and graphic design goals of FMCG paper consumer packaging. Process
design encompasses precise selection of materials and processes for packaging production, targeted
planning of technologies, and meticulous cost allocation and management. By actively engaging in
process design, FMCG paper consumer packaging providers are required to seamlessly integrate ideas
and information of marketing design into the production process, leading FMCG paper consumer
packaging providers adeptly provide process design services to clients, addressing their branding and
marketing needs more effectively. This demands extensive process design experience, excellent craft
expertise, and robust research and development capabilities, posing a formidable barrier for relatively
small enterprises.
Adaptability to the policy environment and emphasis on ESG: As an integral component of the
FMCG products, FMCG paper consumer packaging is widely seen in daily life with large volumes, and
both of its production and post-use disposal are expected to have a significant influence on our society
and environment. The evolving landscape of environmental awareness and the implementation of ESG
policies are reshaping the policy environment for FMCG paper consumer packaging. There is a
discernible industry shift towards embracing the “Replace plastic with paper” trend, leading to an
escalating emphasis on environmental standards for FMCG paper consumer packaging.
Forward-thinking industry leaders are proactive in anticipating policy changes, enabling them to secure
a competitive advantage in the dynamic market landscape. Conversely, relatively small enterprises often
lack the accumulated expertise in the research and development of functional paper packaging and the
validation of plastic substitutes, making it challenging for them to adapt to shifts in the policy
environment.
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Technology capability: In response to the persistent trend of heightened differentiation in the
competitive FMCG market landscape, there is a growing need for advanced technology capability to
consistently develop high-quality paper packaging products. Furthermore, in an environment where
labor costs are steadily increasing, the adoption of automated production through digitization and
intelligent technologies has become an essential requirement for attaining cost advantages. This poses a
formidable challenge for relatively small enterprises, especially when contending with leading FMCG
paper consumer packaging providers who have already solidified proficient research and development
teams and implemented sophisticated digitized production processes.
Historical Trends of Prices on Major Raw Materials of FMCG Paper Consumer Packaging
Industry in Mainland China
At present, white cardboard have emerged as the dominant raw material employed by FMCG paper
consumer packaging. Due to macroeconomic conditions, supply and demand, as well as changes in
global pulp future market, the price of white cardboard underwent substantial fluctuations from 2020 to
2024. Particularly in 2021, the price of white cardboard surged to its highest level in nearly five years,
driven by the upward movement in pulp prices upstream, which exerted a pronounced influence on both
costs and pricing dynamics within the FMCG paper consumer packaging industry. A combination of
various social and economic factors, such as strikes, global reflation and Renminbi appreciation, drove
the increase in pulp price in 2021. For example, the large-scale strike in South Africa and the outbreak
of the pandemic in South America in the second half of 2020 led to a reduction in production volume of
major raw materials for white cardboard paper, including softwood and hardwood pulp. From the
demand side, since the latter half of 2020, major economies worldwide, with Mainland China at the
forefront, have embarked on a recovery phase, stimulating downstream demand and driving the increase
in pulp price. The following diagram illustrates the historical prices of 250g white cardboard in
Mainland China for the periods indicated.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Historical price of white cardboard in China, 2020-2024
RMB/ ton
2020
-03
2020
-06
2020
-09
2020
-12
2021
-03
2021
-06
2021
-09
2021
-12
2022
-03
2022
-06
2022
-09
2022
-12
2023
-03
2023
-06
2023
-09
2023
-12
2024
-03
2024
-06
2024
-09
2024
-12
Source: CIC Report
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The pricing of FMCG paper consumer packaging is predominantly dictated by the raw material
costs, along with supplementary charges arising from processing procedures. Commonly encompassed
within these costs are printing plate charges, paperboard materials costs, printing processing fees, and
post-processing fees. The selection of paperboard material, its quantity, and the techniques employed to
achieve marketing design objectives, encompassing both the quantity and complexity of processes, all
contribute to the determination of the final product price. Additionally, FMCG paper consumer
packaging enterprises can diversify revenue streams by offering a wide range of value-added services.
During the Track Record Period, we were able to pass on most of the increase in raw material prices to
our customers and our gross profit margin had not been materially and adversely affected by the
fluctuation of raw material prices during the Track Record Period.
SOURCE OF INFORMATION
CIC was commissioned to conduct research and analysis of, and produce a report on China’s B2C
outbound social media e-commerce industry and China’s FMCG paper consumer packaging industry at
a fee of approximately RMB890,000. The commissioned report has been prepared by CIC
independently without the influence from the Company or other interested parties. CIC offers industry
consulting services, commercial due diligence, and strategic consulting. With a consultant team actively
tracking the latest market trends in various industries such as consumer goods and services, agriculture,
chemicals, marketing and advertising, culture and entertainment, energy and industry, finance and
services, healthcare, TMT, and transportation, CIC possesses the most relevant and insightful market
intelligence in these sectors. Except as otherwise noted, all of the data and forecasts contained in this
section are derived from the CIC Report. We have also referred to certain information in the
“Summary”, “Risk Factors”, “Business” and “Financial Information” sections to provide a more
comprehensive presentation of the industry in which we operate.
CIC employed both primary and secondary research methods using a variety of resources. Primary
research included interviews with key industry experts and leading participants, while secondary
research involved analyzing data from publicly available sources, such as the National Bureau of
Statistics and General Administration of Customs of the PRC. The market projections in the CIC Report
are based on the following key assumptions during the forecast period: (i) a stable social, economic, and
political environment, (ii) steady economic and industrial growth with urbanization, (iii) key industry
drivers influencing China’s B2C outbound social media e-commerce industry and China’s FMCG paper
consumer packaging industry, and (iv) no extreme force majeure or unforeseen industry regulations
affecting the market fundamentally.
Our Directors confirm that, to the best of their knowledge, after making reasonable inquiries, there
is no material and adverse change in the market information since the date of the CIC Report, which
may qualify, contradict or have an impact on the information in this section.
INDUSTRY OVERVIEW
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LA WS AND REGULATIONS IN THE PRC
Overview
The following sets forth a summary of the most significant aspects of PRC laws and regulations.
Regulations Relating to Import and Export Goods
Import and Export Management
Pursuant to the F oreign Trade Law of the PRC ( ) which was
promulgated by the Standing Committee of the National People’s Congress, or the SCNPC on May 12,
1994 and implemented on July 1, 1994, and subsequently revised on April 6, 2004, November 7, 2016
and December 30, 2022, the State adopts a unified foreign trade system, encourages the development of
foreign trade, and maintains a fair and free foreign trade order. The amendment to the F oreign Trade
Law of the People’s Republic of China on December 30, 2022 deleted the provisions regarding the
record-filing and registration of foreign trade operators. Starting from December 30, 2022, all local
commerce departments will cease processing the record-filing and registration of foreign trade
operators.
Pursuant to the Customs Law of the PRC () promulgated by the SCNPC
on January 22, 1987 and amended on July 8, 2000, June 29, 2013, December 28, 2013, November 7,
2016, November 4, 2017 and April 29, 2021, unless otherwise stipulated, the declaration of import and
export goods may be made by consignees and consignors themselves, and such formalities may also be
completed by their entrusted customs brokers that have registered with the Customs. The consignees
and consignors for import or export of goods and the customs brokers engaged in customs declaration
shall register with the Customs in accordance with the laws.
Pursuant to the Administrative Provisions of the Customs of the PRC on the Filing of Customs
Declaration Entities ( ) promulgated by the General
Administration of Customs on November 19, 2021 and taking effect from January 1, 2022, the
consignees and consignors for imported or exported goods and the customs brokers engaged in customs
declarations shall undergo recordation formalities at the relevant administration department of customs
in accordance with the laws.
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Imported and Exported Commodities Inspection
According to the Law of the PRC on Import and Export Commodity Inspection (ʕശɛ͏΍ձ਷
) which was promulgated by the SCNPC on February 21, 1989 and implemented on
August 1, 1989, and last revised on April 29, 2021, and the Regulations for the Implementation of the
Law of the PRC on Import and Export Commodity Inspection (ྼ
ૢԷ) which was promulgated by the State Council on August 31, 2005 and implemented on
December 1, 2005, and last revised on March 29, 2022, the General Administration of Customs is
responsible for inspection of import and export commodities. The entry- exit inspection and quarantine
authorities shall conduct inspection on the import and export commodities listed in the catalog and other
import and export commodities that shall be subject to the inspection of the entry-exit inspection organs
as prescribed by laws and administrative regulations. For the import and export commodities other than
those that are subject to statutory inspection by the entry-exit inspection and quarantine authorities as
mentioned above, the entry-exit inspection and quarantine authorities may conduct random inspection in
accordance with state regulations. No import commodity subject to statutory inspection that has not
been inspected could be sold or used. No export commodity subject to statutory inspection that has not
been inspected or fails to pass the inspection could be exported.
Regulations Relating to Packaging and Printing
Printing related operation permit
According to the Administrative Regulations on the Printing Industry (ΙՏุ၍ଣૢԷ)
revised by the State Council on December 6, 2024 and effective on January 20, 2025 and the Interim
Provisions on the Qualifications for Operators of Printing Industry (ૢ΁ᅲБ஝
) revised by the State Administration of Press, Publication, Radio, Film and Television on December
11, 2017 and effective on the same day, the State adopts a printing business permit system, and no
organization or individual may engage in printing business activities without obtaining a printing
business permit.
According to the Administrative Regulations of the People’s Republic of China on Production
Licenses for Industrial Products (͛ପ஢̙ᗇ၍ଣૢԷ ) revised by the
State Council on July 20, 2023 and effective on the same day as well as the Catalog of Products Subject
to the Production License System (2012) (ͦ፽ (2012) ) promulgated
by the General Administration of Quality Supervision(has been removed), Inspection and Quarantine on
November 20, 2012 and effective on the same day, enterprises engaging in the production of products in
direct contact with food materials are required to obtain the national production license for industrial
products.
Laws and regulations relating to environment protection
According to the Environmental Protection Law of the PRC ( )
promulgated by the SCNPC on December 26, 1989 and implemented on the same date, and subsequently
revised on April 24, 2014, enterprises, public institutions and other producers and operators shall
prevent and reduce environmental pollution and ecological damage, and shall take the liabilities for the
damages caused according to the laws. The state adopts the pollution discharge permit management
system. Enterprises, public institutions and other producers and operators which are subject to the
pollution discharge permit management shall discharge pollutants according to the requirements of the
pollution discharge permit; and those that fail to obtain the pollution discharge permit shall not
discharge pollutants.
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The Classification and Administration Lists of Pollutant Discharge Permits for Stationary
Pollution Sources (๕રϮ஢̙ʱᗳ၍ଣΤ፽ ) issued by the Ministry of Ecology and
Environmental ( ͛࿒ᐑྤ௅ ) on December 20, 2019 provides for the trial implantation of pollution
registration for entities that produce and discharge pollutants but have a minimal impact on the
environment. Pollutant discharging entities on the list are not required to apply for a pollutant discharge
permit, but should fill in a pollutant discharge registration form on the National Pollution Discharge
Permits Administration Information Platform.
Laws and Regulations Relating to Foreign Investment and Overseas Investment
Foreign Investment
The PRC Company Law () was promulgated by the SCNPC on
December 29, 1993 and implemented on July 1, 1994, and last revised on December 29, 2023 and came
into effect on July 1, 2024. Under the Company Law of the PRC, companies are generally classified into
two categories, namely, limited liability companies and joint stock limited companies. The PRC
Company Law also applies to foreign-invested enterprises. Pursuant to the PRC Company Law, where
laws on foreign investment have other stipulations, such stipulations shall prevail.
Investment activities in Mainland China by foreign investors are principally governed by the
Catalog of Encouraged Industries for F oreign Investment (ོᎸ̮ਠҳ༟ପุͦ፽), and the Special
Administrative Measures (Negative List) for F oreign Investment Access (ɝतй၍ଣણ
݄(૶ఊ )), or the Negative List, which are promulgated and amended from time to time by the
MOFCOM, and the National Development and Reform Commission, or the NDRC, and together with
the PRC F oreign Investment Law ( ), or the Foreign Investment Law, and
its respective implementation rules and ancillary regulations.
The Foreign Investment Law was promulgated by NPC in March 2019 and came into effect on
January 1, 2020, which replaced the PRC Sino-F oreign Equity Joint V enture Enterprise Law (ʕശɛ͏
 ), the Sino-F oreign Cooperative Joint V enture Enterprise Law of PRC
( ) and the Wholly F oreign-owned Enterprise Law of PRC (ʕ
), serving as the legal basis for foreign investment in Mainland China. The
Foreign Investment Law, by means of legislation, establishes the basic framework for the access,
promotion, protection and administration of foreign investment in view of investment protection and
fair competition. According to the Foreign Investment Law, foreign investment shall enjoy pre-entry
national treatment, except for those foreign invested entities that operate in industries deemed to be
either “restricted” or “prohibited” in the Negative List, which is promulgate or approve by the State
Council. The negative list administrative system refers to the special administrative measures for access
of foreign investment in specific fields as stipulated by the State. Foreign investors may not invest in
any of the prohibited fields set out in the negative list, and may only invest in any of the restricted fields
upon satisfying the conditions set out in the negative list. To ensure the effective implementation of the
Foreign Investment Law, the Regulations on Implementing the F oreign Investment Law of PRC (ʕശ
ૢԷ ), or the Foreign Investment Implementation Regulations, was
promulgated by State Council in December 26, 2019 and came into effect on January 1, 2020, which
further clarified that the state encourages and promotes foreign investment, protects the lawful rights
and interests of foreign investors, regulates foreign investment administration, continues to optimize
foreign investment environment and advances a higher-level opening.
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The NDRC and the MOFCOM jointly issued the Special Administrative Measures (Negative List)
for Foreign Investment Access (2024 version) (݄( ૶ఊ )(2024و)),
or the 2024 Negative List, on November 1, 2024, to replace the previous encouraging catalog and
negative list thereunder. Pursuant to the Foreign Investment Law, the Foreign Investment
Implementation Regulations and the 2024 Negative List, foreign investors shall not make investments in
prohibited industries as specified in the Negative List, while foreign investments must satisfy certain
conditions stipulated in the Negative List for investment in restricted industries. Industries not listed in
the Negative List are generally deemed “permitted” for foreign investments.
Overseas Investment
Pursuant to the Administrative Measures for Outbound Investment ()
promulgated by the MOFCOM on September 6, 2014 and implemented on October 6, 2014, the
MOFCOM and provincial competent commerce authorities shall carry out administration either by
record-filing or approval, depending on different circumstances of outbound investment by enterprises.
Outbound investment by enterprises that involves sensitive countries and regions, or sensitive industries
shall be subject to administration by approval. Outbound investment by enterprises that falls in any
other circumstances shall be subject to administration by record-filing.
Pursuant to the Administrative Measures for Outbound Investment of Enterprises (Άุྤ̮ҳ༟
) promulgated by the NDRC on December 26, 2017 and implemented on March 1, 2018, a
domestic enterprise, or the Investor, making an outbound investment shall obtain approval, conduct
record-filing or other procedures applicable to outbound investment projects, or the Projects, report
relevant information, and cooperate with the supervision and inspection. Sensitive Projects carried out
by Investors directly or through overseas enterprises controlled by them shall be subject to approval;
non-sensitive Projects directly carried out by Investors, namely, non-sensitive projects involving
investors’ direct contribution of assets or rights and interests or provision of financing or guarantee
shall be subject to record-filing. The aforementioned “sensitive project” means a project involving a
sensitive country or region or a sensitive industry. The NDRC shall promulgate the catalog of sensitive
industries. The currently effective sensitive industry catalog is the Catalog of Sensitive Sectors for
Outbound Investment (2018 Edition) (ྤ̮ҳ༟ઽชБุͦ፽ (2018و)), effective on March 1,
2018.
Laws and Regulations Relating to Taxation
Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC ( ), or the
EIT Law, promulgated by the NPC on March 16, 2007 and implemented by the SCNPC on January 1,
2008 and last revised on December 29, 2018 and the Implementation Rules of the EIT Law (੻
ૢԷ) initially promulgated by the State Council on December 6, 2007 and came into effect
on January 1, 2008 and subsequently revised on December 6, 2024 and took effect on January 20, 2025,
a domestic enterprise which is established within Mainland China in accordance with the laws or
established in accordance with any laws of foreign country or region but with an actual management
entity within Mainland China shall be regarded as a resident enterprise. A resident enterprise shall be
subject to an EIT of 25% of any income generated within or outside Mainland China. A preferential EIT
rate shall be applicable to any key industry or project which is supported or encouraged by the State.
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According to the EIT Law, high-tech enterprises are entitled to a reduced EIT rate of 15%. The
Administrative Measures for Certification of High and New Technology Enterprises (৷อҦஔΆุႩ
) which was amended on January 29, 2016 and became effective on January 1, 2016,
provides that, an enterprise legally certificated as a High and New Technology Enterprise is entitled to
apply for preferential income tax policies according to EIT law and relevant regulations. A qualified
enterprise will be issued the High and New Technology Enterprise Certificate (ࣣand
the qualification of a certificated enterprise shall be valid for a term of three years from the issuance
date of the certificate.
Transfer Pricing
According to the Corporate Income Tax Law and its Implementation Regulations, as well as the
Tax Collection and Administration Law of the People’s Republic of China (ʕശɛ͏΍ձ਷೼ϗᅄϗ
) that was revised by the SCNPC on April 24, 2015 and became effective on the same day, and
the Implementing Regulations of the Tax Collection and Administration Law of the People’s Republic of
China ( ) that was revised by the State Council on
February 6, 2016 and became effective on the same day, for business transactions between affiliated
enterprises, the receipt or payment of prices and fees shall follow the arm’s length principle. Where the
receipt or payment of prices and fees does not follow the arm’s length principle and results in a
reduction of taxable income, the tax authorities shall have the right to make reasonable adjustments.
Based on the Announcement of the State Taxation Administration on Matters Relating to the
Improvement of the Administration of Related Party Transaction Reporting and Contemporaneous
Documentation (ʮѓ ) promulgated
and became effective on June 29, 2016, enterprises which have related-party transactions and meet
corresponding conditions shall prepare their contemporaneous documentation (ࣘper tax year
and submit to the tax authority if required by the same. Contemporaneous documentation includes
master file ( ˴᜗˖Ꮶ ), local file ( ͉ή˖Ꮶ ) and special issue file (ԫධ˖Ꮶ ).
According to the Announcement of the State Taxation Administration on Issuing the Administrative
Measures for Special Tax Adjustment and Investigation and Mutual Agreement Procedures (೼ਕ
ʮѓ ) which partially repealed the
Implementation Regulations for Special Tax Adjustments (Trial) (ج( ༊Б)), and
was issued on March 17, 2017 and became effective on May 1, 2017 and was amended on June 15, 2018,
an enterprise may adjust and pay taxes at its own discretion when it receives a special tax adjustment
risk warning or identifies its own special tax adjustment risks, while the tax authorities may also carry
out special tax investigation and adjustment in accordance with the relevant provisions in regard to
enterprises that adjust and pay taxes at their own discretion.
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V alue-Added Tax
According to the Interim Regulations of the PRC on V alue-added Tax (೼ᅲ
БૢԷ), which was promulgated by the State Council on December 13, 1993 and last revised on
November 19, 2017, and the Detailed Rules for the Implementation of the Interim Regulations of the
PRC on V alue-added Tax ( ), which was promulgated by
the Ministry of Finance on December 25, 1993 and last amended on October 28, 2011, entities and
individuals that sell goods or labor services of processing, repair or replacement, sell services,
intangible assets, or immovables, or import goods within Mainland China are taxpayers of value-added
tax, or the V A T, and shall pay V A T in accordance with law. Unless otherwise stipulated, the V A T rate is
17% for taxpayers selling goods, labor services, or tangible movable property leasing services or
importing goods; 11% for taxpayers selling transportation, postal, basic telecommunications,
construction, or immovable leasing services, selling immovables, transferring land use rights, or selling
or importing specific goods; unless otherwise stipulated, 6% for taxpayers selling services or intangible
assets.
According to the Circular of the MOF and the SAT on Adjusting V alue-added Tax Rate (௅e
 ), which was promulgated by the MOF and the SA T on April 4,
2018 and became effective on May 1, 2018, the tax rates for the taxable sales or goods import activity,
which were subject to the tax rates of 17% and 11% respectively, were adjusted to 16% and 10%
respectively.
According to the Circular on Policies in Relation to the Deepening of V alue-added Tax Reforms
(ʮѓ ), which was jointly promulgated by the MOF, the SA T and
the General Administration of Customs on March 20, 2019 and became effective on April 1, 2019, the
tax rate of 16% and 10% originally applicable to general V A T taxpayers’ V A T taxable sales or goods
import shall be adjusted to 13% and 9%, respectively.
According to The Notice of the Ministry of Finance and the State Administration of Taxation on
VAT and Consumption Tax Policies for Exported Goods and Services (̈
 ), which was promulgated on May 25, 2012 by the Ministry of
Finance of the PRC and SA T, of which some terms became effective from January 1, 2011, and other
terms became effective from July 1, 2012, exported goods and services of export enterprises are eligible
for V A T exemption and refund policy. Except for the export V A T refund rate (hereafter referred to as the
“tax refund rate”) otherwise provided for by the Ministry of Finance and SA T according to the decision
of the State Council, the tax refund rate for exported goods shall be the applicable tax rate. SA T shall
promulgate the tax refund rate through the Tax Refund Rate Catalog of Exported Goods and Services
according to the aforesaid provisions for the implementation of the tax authorities and taxpayers. In the
event of adjustment to the tax refund rate, the implementing date shall be subject to the export date as
indicated in the Customs Declaration of Goods for Export (specifically for export tax refund) (including
the goods under process, repair and fitting) except as otherwise provided.
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Labor, Social Insurance and Housing Provident Funds
Labor Law and Labor Contract Law
According to the Labor Law of the PRC (), which was promulgated by
the SCNPC on July 5, 1994, came into effect on January 1, 1995 and last revised on December 29, 2018,
and the Labor Contract Law of the PRC ( ), which was promulgated on
June 29, 2007, revised on December 28, 2012 and came into effect on July 1, 2013, written labor
contracts shall be executed between an entity and its employees if an employment relationship is
established. Employers are required to inform their employees about their job responsibilities, working
conditions, occupational hazards, remuneration and other matters with which the employees may be
concerned. Employers shall pay remuneration to employees on time and in full in accordance with the
commitments set forth in their employment contracts and the relevant PRC laws and regulations.
Social Insurance
According to the Law of Social Insurance of the People’s Republic of China (ٟ
), which was promulgated by the SCNPC on October 28, 2010 and becoming effective on
July 1, 2011, and last amended on December 29, 2018 and put into effect on the same day, Chinese
social insurance includes five categories, namely basic endowment insurance, basic medical insurance,
work injury insurance, unemployment insurance and maternity insurance to protect citizens’ right to
receive material assistance from the state and society in accordance with the law due to old age, illness,
work-related injury, unemployment and childbirth. Employers shall apply to social insurance agencies
for social insurance registration for their employees within 30 days from the date of employment. If the
employer fails to pay the social insurance premiums in full and on time, the social insurance premium
collection agency shall order the payment or replenishment within a certain period of time and shall
impose a late payment fee of five-hundredth of one percent per day from the date of non-payment. If the
late payment is still not made, the relevant administrative department shall impose a fine of one to three
times the amounts of unpaid contributions.
Pursuant to the Opinions of the General office of the State Council on strengthening
Comprehensively Promoting the Consolidation of Maternity Insurance and Employees’ Basic Medical
Insurance (จԈ ) issued by
the GOSC on March 6, 2019 and implemented on the same day, the State promotes the consolidation of
maternity insurance funds into the employees’ basic medical insurance fund system for unified
collection and payment.
According to the Urgent Notice of the General Office of the Ministry of Human Resources and
Social Security on Implementing the Spirit of the Executive Meeting of the State Council in Stabilizing
the Collection of Social Security Contributions (஫࿏ໝྼ਷ਕ৫੬
 ), issued by the Ministry of Human Resources
and Social Security on September 21, 2018 and put into effect on the same date, before the reform of
social security collection agencies is put in place, the prevailing social security contribution bases, rates
and other related collection policies adopted in different regions of the country shall remain unchanged.
Local authorities in charge of social insurance premiums collection are strictly prohibited from acting
on their own to enforce settlement of social insurance premiums defaulted on by enterprises over the
years.
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Housing Provident Fund
According to the Regulation on the Administration of Housing Provident Fund (၍ଣ
ૢԷ) which was promulgated by the State Council on April 3, 1999 and becoming effective on the
same day, and last amended on March 24, 2019 and put into effect on the same day, employers in
Mainland China should register with the Housing Provident Fund Management Center for contributions
and go through the procedures of setting up housing provident fund accounts for their employees and
each employee can only have one housing provident fund account. If the employer hires an employee, it
should register with the Housing Provident Fund Management Center within 30 days from the date of
employment and go through the procedures of setting up or transferring the employee’s housing
provident fund account. The monthly contribution to the employee’s housing provident fund is the
employee’s average monthly salary for the previous year multiplied by the housing provident fund
contribution ratio adopted by the employer, which shall not be less than 5%.
In case that the employer fails to register for housing provident fund contributions or establish a
housing provident fund account for an employee, the Housing Provident Fund Management Center shall
order the employer to do so within a specified period. If the employer fails to do so within the said
period, a fine ranging from RMB10,000 to RMB50,000 will be imposed. If the employer fails to
contribute or make full contribution to the housing provident fund, the Housing Provident Fund
Management Center shall order the employer to do so within a specified period, and if the employer still
default on payment it may apply to the people’s court for enforcement.
Laws and Regulations Related to Intellectual Property Rights
Patent
According to the Patent Law of the People’s Republic of China () which
was promulgated by the SCNPC on March 12, 1984 and becoming effective on April 1, 1984, last
amended on October 17, 2020 and put into effect on June 1, 2021 and the Implementing Rules of the
Patent Law of China ( ), promulgated by the State Council on June
15, 2001 and becoming effective on July 1, 2001, which was last amended on December 11, 2023 and
came into effect on January 20, 2024, there are three types of patents in Mainland China invention
patents, utility model patents and design patents. Under the currently effective Patent Law, the
protection period of a patent right for invention patents shall be 20 years, the protection period of a
patent right for utility model patents shall be 10 years, and the protection period of a patent right for
design patents shall be 15 years, both commencing from the filing date.
Trademark
According to the Trademark Law of the People’s Republic of China ()
which was adopted by the SCNPC on August 23, 1982 and becoming effective on March 1, 1983, and
last amended on April 23, 2019 and put into effect on November 1, 2019 and the Implementation
Regulation of the Trademark Law of the People’s Republic of China (ૢ
Է) which was last revised by the State Council on April 29, 2014 and becoming effective on May 1,
2014, the period of validity for a registered trademark is 10 years, commencing from the date of
registration. Upon expiry of the period of validity, the registrant who intends to keep using the
trademark shall go through the formalities for renewal within twelve months prior to the date of expiry.
Where the registrant fails to do so, a grace period of six months may be granted. The period of validity
for each renewal of registration is 10 years, commencing from the day immediately after the expiry of
the preceding period of validity for the trademark.
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Copyright and Software Registration
Copyright is protected by the Copyright Law of the PRC ( )
promulgated by the SCNPC on September 7, 1990 and last amended on November 11, 2020 and
effective from June 1, 2021 and the Implementation Regulations of the Copyright Law of PRC (ʕശɛ
ૢԷ ) issued by the State Council on August 2, 2002, last amended on January
30, 2013 and put into effect on March 1, 2013, which provided provisions on the classification of works
and the obtaining and protection of copyright and the related rights.
The Regulation on Computers Software Protection (ᚐૢԷ), which was
promulgated by the State Council on June 4, 1991, last amended in January 30, 2013 and put into effect
on March 1, 2013, respectively, was formulated for the purposes of protecting the rights and interests of
copyright owners of computer software, regulating the relationship of interests generated in the
development, dissemination and use of computer software, encouraging the development and
application of computer software, and promoting the development of software industry and the
informatization of national economy. According to the Regulation on Computer Software Protection,
Chinese citizens, legal entities or other organizations are entitled to the copyright in the software which
they have developed, whether published or not. A software copyright owner may register with the
software registration institution recognized by the copyright administration department of the State
Council. A registration certificate issued by the software registration institution is a preliminary proof
of the registered items.
According to the Computer Software Protection Regulations (
ᚐૢԷ) and the
Measures for the Registration of Computer Software Copyright ( )
promulgated by the National Copyright Administration on February 20, 2002, and put into effect on the
same day, the National Copyright Administration is mainly responsible for the registration and
management of national software copyright, and the China Copyright Protection Center is recognized as
the software registration agency. The China Copyright Protection Center will grant registration
certificates to computer software copyright applicants who conform to the Measures for Registration of
Computer Software Copyright and the Regulations on Computer Software Protection.
Domain Name
In accordance with Measures for the Administration of Internet Domain Names (ʝᑌၣਹΤ၍ଣ
) which was promulgated by the Ministry of Industry and Information Technology (ʷ
௅) on August 24, 2017, and came into effect on November 1, 2017, those who are engaged in Internet
domain name service provision, operation and maintenance as well as supervision and administration of
Internet domains and related activities within Mainland China shall be subject to the said measures. The
Ministry of Industry and Information Technology is the main regulatory agency responsible for the
management of domain names for Internet users in Mainland China. The registration of a domain name
shall follow the principle of “registration being granted to the first applicant”. Upon completion of the
application process, the domain name applicant becomes the domain name holder.
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Regulations on Internet Security
Pursuant to the Ninth Amendment to the Criminal Law of the PRC (͍
ࣩ(ɘ)), issued by the SCNPC in August 29, 2015, which became effective in November 1, 2015, any
Internet service provider that fails to fulfill its obligations related to Internet information security
administration as required under applicable laws and refuses to rectify upon orders shall be subject to
criminal penalty in certain circumstances.
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law (), which
became effective on June 1, 2017. The Cybersecurity Law requires network operators to comply with
laws and regulations and fulfill their obligations to safeguard security of the network when conducting
business and providing services.
Pursuant to the Cybersecurity Law, network operators shall follow their cybersecurity obligations
pursuant to the requirements of network security classified protection, including: (i) formulating
internal security management systems and operating instructions, determining the persons responsible
for cybersecurity, and implementing the responsibility for cybersecurity protection; (ii) taking
technological measures to prevent computer viruses, network attacks, network intrusions and other
actions endangering cybersecurity; (iii) taking technological measures to monitor and record the
network operation status and cybersecurity incidents, and such records shall be kept for no less than 6
months; (iv) taking measures such as data classification, and back-up and encryption of important data;
and (v) other obligations stipulated by laws and administrative regulations. Furthermore, under the
Cybersecurity Law, critical information infrastructure operators generally shall, during their operations
in the PRC, store the personal information and important data collected and produced within the
territory of the PRC.
On June 10, 2021, the SCNPC passed the Data Security Law (), which became
effective as of September 1, 2021. The Data Security Law is broadly applicable to and will impact all
operators that engage in the processing of all types of data. The Data Security Law defines “data” as any
record of information in electronic or other forms, and “data processing” includes the collection,
storage, use, processing, transmission, provision and disclosure of data and others. The Data Security
Law shall apply to data processing activities and security supervision of such activities within the
territory of the PRC; where data processing activities outside the territory of the PRC damage the
national security, public interests or the legitimate rights and interests of citizens and organizations, it
shall also be subject to the Data Security Law.
The Data Security Law provides for data security protection obligations on entities and individuals
carrying out data processing activities, introduces a data classification and hierarchical protection
system based on the importance of data in economic and social development, as well as the degree of
harm it will cause to national security, public interests, or legitimate rights and interests of individuals
or organizations when such data are tampered with, destroyed, leaked, or illegally acquired or used. It
also provides for a national security review procedure for data activities that may affect national
security. The Data Security Law imposes data security and privacy obligations on entities and
individuals carrying out data activities.
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On July 30, 2021, the State Council issued the Regulations on Protecting the Security of Critical
Information Infrastructure (ᚐૢԷ ), effective on September 1, 2021,
pursuant to which, a “critical information infrastructure” refers to critical network facilities and
information systems involved in important industries and sectors, such as public communication and
information services, energy, transportation, water conservancy, finance, public services, governmental
digital services, science and technology related to national defense industry, as well as those which may
seriously endanger national security, national economy and citizen’s livelihood or public interests if
damaged or malfunctioned, or if any leakage of data in relation thereto occurs. In addition, competent
departments and administration departments of each important industry and field, or protection
departments, shall be responsible to formulate determination rules and determine the critical
information infrastructure operator in the respective important industry or field. The result of the
determination of critical information infrastructure operator shall be informed to the operator and notify
the public security department of the State Council.
On September 24, 2024, the State Council published the Regulations on the Administration of
Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Network Data Security Regulations ”),
which came into effect on January 1, 2025. The Network Data Security Regulations serve to refine,
supplement, and enhance existing laws such as the Cybersecurity Law (), the Data
Security Law (), and the Personal Information Protection Law (). The
Network Data Security Regulations provide implementing rules that include, but are not limited to,
detailed requirements for personal information processing rules, procedures for handling requests to
transmit personal information to a third party, the need to sign contracts with data recipients when
providing or entrusting the processing of personal information to other network data processors, and the
legal conditions for cross-border transfer of personal information.
On December 28, 2021, the CAC, the NDRC, and other relevant PRC governmental authorities
jointly issued the Cybersecurity Review Measures (), which became effective on
February 15, 2022. Pursuant to the Cybersecurity Review Measures, critical information infrastructure
operators that purchase network products and services and Internet platform operators engaging in data
processing activities that affect or may affect national security are subject to cybersecurity review under
the Cybersecurity Review Measures. Moreover, Internet platform operators who process more than one
million users’ personal information must report to the Office of Cybersecurity Review for a cyber
security review in the event of a “foreign listing” ( ਷̮ɪ̹ ).
Regulations on Personal Information Protection
Pursuant to the Cybersecurity Law, the “personal information” refers to all kinds of information
recorded by electronic or otherwise that can be used to independently identify or be combined with
other information to identify individuals’ personal information including but not limited to: individuals’
names, dates of birth, ID numbers, biologically identified personal information, addresses and
telephone numbers, etc.
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The Cybersecurity Law provides that: (i) to collect and use personal information, network
operators shall follow the principles of legitimacy, rightfulness and necessity, disclose rules of data
collection and use, clearly express the purposes, means and scope of collecting and using the
information, and obtain the consent of the persons whose data are gathered; (ii) network operators shall
neither gather personal information unrelated to the services they provide, nor gather or use personal
information in violation of the provisions of laws and administrative regulations or the scopes of
consent given by the persons whose data are gathered; and shall dispose of personal information they
have saved in accordance with the provisions of laws and administrative regulations and agreements
reached with users; (iii) network operators shall not divulge, tamper with or damage the personal
information they have collected, and shall not provide the personal information to others without the
consent of the persons whose data are collected. However, if the information has been processed and
cannot be recovered and thus it is impossible to match such information with specific persons, such
circumstance is an exception.
The Supreme People’s Court and the Supreme People’s Procuratorate issued the Interpretations on
Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving
Infringement of Citizens’ Personal Information (͕ʮ͏
༆ᙑ ) on May 8, 2017 and effective on June 1, 2017,
stipulates that the personal information of a natural person shall be protected by the law. Any
organization or individual shall legally obtain such personal information of others when necessary and
ensure the safety of such information, and shall not illegally collect, use, process or transmit personal
information of others, or illegally purchase or sell, provide or make public personal information of
others.
On May 28, 2020, the SCNPC issued the Civil Code (Պ), which became effective on
January 1, 2021. The Civil Code stipulates that the personal information of a natural person shall be
protected and the law provides main legal basis for privacy and personal information infringement
claims under the Chinese civil laws.
On August 20, 2021, the SCNPC passed the Personal Information Protection Act (ᚐ
)( “ PIPL ”), which became effective on November 1, 2021. The PIPL defines personal information
as all kinds of information, recorded by electronic or other means, related to identified or identifiable
natural persons, not including information after anonymization. The processing of personal information
includes the collection, storage, use, processing, transmission, provision, disclosure and deletion, etc.
of personal information. The PIPL shall apply to the processing of the personal information of natural
persons within the territory of the PRC; the PIPL shall also apply to the processing of the personal
information of Chinese people outside the territory of the PRC when: (i) where the purpose is to provide
Chinese people with products or services; (ii) where the activities of Chinese people are analyzed and
evaluated; and (iii) other circumstances as prescribed by laws and regulations.
Pursuant to the PIPL, personal information shall be processed under the principle of lawfulness,
propriety, necessity and good faith, and may not be processed by misleading, fraud, coercion or other
means. Personal information shall be collected within the minimum scope required for achieving the
processing purpose, and excessive collection of personal information is forbidden. Processors shall take
necessary measures to ensure the security of the personal information processed. The PIPL provides the
rights of data subjects, including right to information, right to object and right to restriction of
processing, right of access, right to portability, right to rectification, right to erasure, right to explain
processing rules, right for close relatives of a dead person.
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On July 7, 2022, the CAC issued the Measures for Security Assessment for Outbound Data
Transfer (), which became effective on September 1, 2022. The Measures for
Security Assessment for Outbound Data Transfer shall apply to the security assessment of important
data and personal information collected and generated by a data processor in its operation within the
PRC, which are to be transferred abroad. A data processor shall apply for the security assessment of an
outbound data transfer to the national cybersecurity and information authorities through the local
cyberspace administration at the provincial level if it provide data outside the PRC and fall into one of
the following circumstances: (i) it provides important data abroad; (ii) it is a critical information
infrastructure operator or it processes the personal information of more than 1 million individuals in
total; (iii) it has exported the personal information of more than 100,000 persons in aggregate or the
sensitive personal information of more than 10,000 persons in aggregate since January 1, of the previous
year; or (iv) other circumstance subject to a security assessment for data export as required by the
national cybersecurity and information authorities.
Laws and Regulations on Securities and Overseas Listings
Securities Laws and Regulations
The Securities Law of the People’s Republic of China (), which was
promulgated by the SCNPC on December 29, 1998, and was latest amended on December 28, 2019 and
took effect on March 1, 2020, comprehensively regulating activities in Mainland China securities
market including issuance and trading of securities, takeovers by listed companies, securities
exchanges, securities companies and the duties and responsibilities of securities regulatory authorities,
etc. The Securities Law further regulates that a domestic enterprise issuing securities overseas directly
or indirectly or listing their securities overseas shall comply with the relevant provisions of the State
Council and for subscription and trading of shares of domestic companies using foreign currencies,
detailed measures shall be stipulated by the State Council separately. The CSRC is the securities
regulatory body set up by the State Council to supervise and administer the securities market according
to law, maintain order in the market, and ensure the market operates in a lawful manner. Currently, the
issue and trading of H shares are principally governed by the regulations and rules promulgated by the
State Council and the CSRC.
Overseas Listings
On February 17, 2023, the CSRC released several regulations regarding the management of filings
for overseas offerings and listings by domestic companies, including the Trial Measures for the
Administration on Overseas Securities Offering and Listing by Domestic Companies (ྤʫΆุྤ̮೯
 ), or the Overseas Listing Trial Measures, together with several
supporting guidelines (collectively referred to as the “Overseas Listing Regulations”). Under Overseas
Listing Regulations, domestic companies in Mainland China that seek to offer and list securities in
overseas markets, either in direct or indirect means, are required to file the required documents with the
CSRC within three working days after its application for overseas listing is submitted.
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The Overseas Listing Regulations provides that no overseas offering and listing shall be made
under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited
by provisions in laws, administrative regulations and relevant state rules; (ii) the intended securities
offering and listing may endanger national security as reviewed and determined by competent
authorities under the State Council in accordance with law; (iii) the domestic company intending to
make the securities offering and listing, or its controlling shareholders and the actual controller, have
committed crimes such as corruption, bribery, embezzlement, misappropriation of property or
undermining the order of the socialist market economy during the latest three years; (iv) the domestic
company intending to make the securities offering and listing is suspected of committing crimes or
major violations of laws and regulations, and is under investigation according to law and no conclusion
has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic
company’s controlling shareholder or by other shareholders that are controlled by the controlling
shareholder and/or actual controller.
The CSRC and three other relevant government authorities jointly promulgated the Provisions on
Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities
Offering and Listing by Domestic Enterprises (੗ձᏦ
) on February 24, 2023 and put into effect on March 31, 2023. Pursuant to the
Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas
Securities Offering and Listing by Domestic Enterprises, where a domestic enterprise provides or
publicly discloses any document or material that involving state secrets and working secrets of state
agencies to the relevant securities companies, securities service institutions, overseas regulatory
authorities and other entities and individuals, it shall report to the competent department with the
examination and approval authority for approval in accordance with the law, and submit to the secrecy
administration department of the same level for filing. The working papers formed within Mainland
China by the securities companies and securities service agencies that provide corresponding services
for the overseas issuance and listing of domestic enterprises shall be kept within Mainland China.
Cross-border transfer shall go through the examination and approval formalities in accordance with the
relevant provisions of the State.
LA WS AND REGULATIONS IN HONG KONG SAR
There is no specific statutory requirement for our Group to obtain any license to carry out our
business in Hong Kong SAR other than the requirement to register our business in accordance with the
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong). Below is a summary of the
laws and regulations in Hong Kong SAR which are relevant to our Group’s business.
Business Registration
For our Group’s business in Hong Kong SAR, we are required to apply for business registration
and display valid business registration certificate at our place of business under the Business
Registration Ordinance (Chapter 310 of the Laws of Hong Kong).
We held valid business registration certificates throughout the Track Record Period and as at the
Latest Practicable Date.
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Intellectual Property
Trade Marks Ordinance
The Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong) makes provision in respect
of the registration of trade marks and provides for connected matters.
It provides that a person infringes a registered trade mark if he uses in the course of trade or
business a sign which is:
(a) identical to the registered trade mark in relation to goods or services which are identical to
those for which it is registered;
(b) identical to the registered trade mark in relation to goods or services which are similar to
those for which it is registered and such use is likely to cause confusion on the part of the
public;
(c) similar to the registered trade mark in relation to goods or services which are identical to or
similar to those for which it is registered and such use is likely to cause confusion on the part
of the public; or
(d) identical or similar to the registered trade mark in relation to goods or services which are not
identical or similar to those for which the trademark is registered, and the trade mark is
entitled to protection under the Paris Convention as a well-known trade mark, and such use,
being without due cause, takes unfair advantage of or is detrimental to the distinctive
character or repute of a trade mark.
Under the Trade Marks Ordinance, the owner of a trade mark may bring infringement proceedings
against the infringer for damages, injunction, accounts or any other relief available in law.
Copyright Ordinance (Chapter 528 of the Laws of Hong Kong)
The Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) makes provisions in respect of
copyright and related rights and for connected purposes.
It provides that the copyright owner has the exclusive right to, among other things, copy the work
and to issue, rent and make available copies of the work to the public.
Those acts if carried out by anyone without the license of the copyright owner constitute primary
infringement of the copyright.
The following acts, among other things, if done without the license of the copyright owner,
constitute secondary infringement:
(a) imports into Hong Kong SAR or exports from Hong Kong SAR, otherwise than for his
private and domestic use, a copy of the work which is, and which he knows or has reason to
be believe to be, an infringing copy of the work; and
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(b) possesses for the purpose of or in the course of any trade or business, sells or lets for hire or
offers or exposes for sale or hire, exhibits in public or distributes for the purpose of or in the
course of any trade or business, or distributes (otherwise than for the purpose of or in the
course of any trade or business) to such an extent as to affect prejudicially the owner of the
copy right, a copy of the work which is, and which he knows or has reason to be believe to
be, an infringing copy of the work.
Infringement of copyright is actionable through civil litigation.
Further, under section 118(1) of the Copyright Ordinance, a person commits an offense if he,
without the consent of the copyright owner of a copyright work, among other things, makes for sale, or
hire an infringing copy of the work, or importing into Hong Kong SAR or exporting from Hong Kong
SAR an infringing copy of the work otherwise than for his private and domestic use, or possesses an
infringing copy of the work with a view to its being, among other things, sold or let for hire by any
person for the purpose of or in the course of that trade or business.
A person who contravenes section 118(1) of the Copyright Ordinance shall be guilty of an offense
and shall be liable to a fine of $50,000 and to imprisonment for 4 years.
Employment
Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong)
The Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) provides that
an employer is liable for any personal injury by accident arising out of and in the course of the
employment to the employee in accordance with the Ordinance.
It further provides that no employer shall employ any employee in the any employment unless
there is in force in relation to such employee a policy of insurance issued by an insurer for more than
the specified amount in respect of the liability of the employer.
It is an offense if there is no or insufficient insurance coverage for the employees. The maximum
penalty is, on conviction on indictment, a fine of HK$100,000 and imprisonment for 2 years and, on
summary conviction, a fine of HK$100,000 and imprisonment for 1 year.
An employer is also required to display in a conspicuous place a notice of insurance on each of its
premises where any employee is employed. Failure to do so is an offense with a maximum penalty of a
fine of HK$10,000.
Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong)
Under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong
Kong), employers must take all practicable steps to ensure that their employees who are at least 18 but
under 65 years of age and employed for 60 days or more become members of a registered scheme
(except for certain exempt persons) within the first 60 days of employment.
Failure to do so without reasonable excuse is an offense and the maximum penalty is a fine of
HK$350,000 and imprisonment for 3 years, and a daily penalty of HK$500 after the permitted period.
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It is also mandatory for employers to make mandatory contributions to the mandatory provident
fund scheme. Subject to the maximum and minimum levels of income, an employer shall deduct 5% of
the employee’s income as contribution to the scheme.
Inland Revenue Ordinance
Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), for a company
carrying on a trade, profession or business in Hong Kong SAR, its assessable profits arising in or
derived from Hong Kong SAR shall be chargeable to profits tax.
The Inland Revenue Ordinance also provides for the obligation to do the followings:
(a) to keep sufficient records of the company’s income and expenditure to enable the assessable
profit to be readily ascertained for at least 7 years;
(b) to inform the Inland Revenue Department of its chargeability to tax;
(c) to submit tax return as required; and
(d) to inform the Inland Revenue Department of the commencement and cessation of
employment of its employees.
Transfer Pricing
Section 20A of the Inland Revenue Ordinance gives the Inland Revenue Department wide powers
to collect tax due from non-residents. The Inland Revenue Department may also make transfer pricing
adjustments by disallowing expenses incurred by the Hong Kong SAR resident under sections 16(1),
17(1)(b) and 17(1)(c) of the Inland Revenue Ordinance, make additional assessments under section 60
of the Inland Revenue Ordinance and challenging the entire arrangement under general anti-avoidance
provisions such as sections 61 and 61A of the Inland Revenue Ordinance.
In December 2009, the Inland Revenue Department released Departmental Interpretation and
Practice Notes No.46 (“ DIPN 46 ”). DIPN 46 provides clarifications and guidance on the Inland
Revenue Department’s views on transfer pricing and how it intends to apply the existing provisions of
the Inland Revenue Ordinance to establish whether related parties are transacting at arm’s length prices.
In general the practices followed by the Inland Revenue Department are based on the transfer pricing
methodologies recommended by the OECD Transfer Pricing Guidelines.
In April 2009, the Inland Revenue Department released Departmental Interpretation and Practice
Notes No. 45 (“ DIPN 45 ”). DIPN 45 provides that where double taxation arises as a result of transfer
pricing adjustments made by the tax authorities of another country, a Hong Kong SAR taxpayer may
potentially claim relief under the treaty between Hong Kong SAR and that country (countries entered
into tax arrangements with Hong Kong SAR includes Mainland China).
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The Hong Kong Government has gazetted the Inland Revenue (Amendment) (No. 6) Ordinance
2018 (“ Amendment Ordinance No. 6 ”) on July 13, 2018. The Amendment Ordinance No. 6 introduces
provisions for a statutory transfer pricing regime and for transfer pricing documentation in Hong Kong
SAR. The major issues covered under the Amendment Ordinance No. 6 are as follows:
• Codify arm’s length principle for related party transactions;
• Introduce transfer pricing documentation in Hong Kong SAR, which includes
country-by-country report, master file and local file;
• Codify Advance Pricing Arrangement (“ APA”) regime and extend application to unilateral
APAs;
• Introduce legal framework for mutual agreement procedures, which includes arbitration.
The major provisions under the Amendment Ordinance No. 6 start to apply for years of assessment
commencing from April 1, 2018.
On July 19, 2019, the HKIRD issued Departmental Interpretation and Practice Notes No. 59
(“DIPN 59 ”) – “Transfer Pricing between Associated Persons”. DIPN 59 explains Rule 1 in Section
50AAF of the Amendment (No. 6) (i.e. arm’s length principle for provision between associated persons)
and its application; clarifies the criteria for exemption of domestic transactions available under Rule 1;
provides guidance on grandfathered transactions (i.e. transactions before the commencement date of
Amendment (No. 6); explains the key aspects of determining arm’s length price including functional
analysis, comparability analysis, functional characterizations, global price lists, business strategies,
etc.; and provides guidance on penalties and additional taxes for non-compliance with Rule 1.
LA WS AND REGULATIONS IN THE PHILIPPINES
Below is a summary of the laws and regulations in the Philippines which are relevant to our
Group’s business.
Data Privacy Regulations
The Data Privacy Act of 2012 (Republic Act No. 10173) (“ DPA”) governs the collection,
processing and sharing of “personal information.” As defined by statute, the term “personal
information” refers to “to any information whether recorded in a material form or not, from which the
identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding
the information, or when put together with other information would directly and certainly identify an
individual.” On the other hand, the term “sensitive personal information,” which is a subset of personal
information, refers to “personal information:
(1) About an individual’s race, ethnic origin, marital status, age, color, and religious,
philosophical or political affiliations;
(2) About an individual’s health, education, genetic or sexual life of a person, or to any
proceeding for any offense committed or alleged to have been committed by such person, the
disposal of such proceedings, or the sentence of any court in such proceedings;
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(3) Issued by government agencies peculiar to an individual which includes, but not limited to,
social security numbers, previous or current health records, licenses or its denials,
suspension or revocation, and tax returns; and
(4) Specifically established by an executive order or an act of Congress to be kept classified.”
The DPA has extraterritorial application and applies to an act done or practice engaged in
and outside of the Philippines by an entity if:
(a) The act, practice or processing relates to personal information about a Philippine
citizen or a resident;
(b) The entity has a link with the Philippines, and the entity is processing personal
information in the Philippines or even if the processing is outside the Philippines as
long as it is about Philippine citizens or residents such as, but not limited to, the
following:
(i) A contract is entered in the Philippines;
(ii) A juridical entity unincorporated in the Philippines but has central management
and control in the country; and
(iii) An entity that has a branch, agency, office or subsidiary in the Philippines and the
parent or affiliate of the Philippine entity has access to personal information; and
(c) The entity has other links in the Philippines such as, but not limited to:
(i) The entity carries on business in the Philippines; and
(ii) The personal information was collected or held by an entity in the Philippines.
Under the DPA, the processing of personal information shall be permitted only if not
otherwise prohibited by law, and when certain conditions exist, including the consent of the data
subject or when the processing of personal information is necessary and is related to the
fulfillment of a contract with the data subject or in order to take steps at the request of the data
subject prior to entering into a contract.
Under the implementing rules and regulations of the DPA, a personal information controller
or personal information processor that employs fewer than 250 persons shall not be required to
register its data processing system with the Philippine National Privacy Commission unless the
processing it carries out is likely to pose a risk to the rights and freedoms of data subjects, the
processing is not occasional, or the processing includes sensitive personal information of at least
1,000 individuals.
LA WS AND REGULATIONS IN THAILAND
Below is a summary of the laws and regulations in Thailand which are relevant to our Group’s
business.
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Consumer Protection Law
Consumer Protection
In Thailand, the Consumer Protection Act B.E. 2522 (1979) (as amended) (the “ CPA”) is the main
piece of legislation that provides protection for consumers. Under the CPA, the consumers are entitled
to the rights to, inter alia , receive correct and sufficient information and description as to the quality of
goods or service and have the injury considered and compensated in accordance with the laws on such
matters. Additionally, the CPA also provides requirements with respect to the advertisement, safety, and
labels of products, among others. Particularly, the CPA prohibits an advertisement which is unfair to
consumers, which includes, without limitation, an advertisement that contains statements which, inter
alia , are false or exaggerated or will cause misunderstanding in the essential elements concerning goods
or services. Violation of the foregoing prohibitions with regards to the advertisement is subject to
imprisonment of not exceeding three months or a fine of not exceeding sixty thousand baht, or both.
Unfair Contract Terms
In Thailand, with respect to an agreement entered into between a trader on one side and a
consumer on the other (a “ Contract ”) is subject to the Unfair Contract Terms Act B.E. 2540 (1997) (the
“UCTA”). Under the UCTA, a Contract which provides an unreasonable advantage in favor of a trader
over the consumer is enforceable insofar as it is fair and reasonable in a particular case. The UCTA
provides examples of such unfair terms which may not be enforceable, which include, without
limitation, in respect of a sale contract, a term excluding or restriction the trader’s liability for a defect
unless the consumer had the knowledge of such defect at the time of the contract (in which case such
term shall only be enforceable insofar as it is fair and reasonable in a particular case).
Product Liability
In Thailand, the Product Liability Act B.E. 2551 (2008) (the “ PLA ”) prescribes that Entrepreneurs
(which refers to, inter alia , (i) manufacturer or hirer, (ii) importer, or (iii) seller) be jointly liable to the
injured person for the damages caused by the unsafe product, regardless of whether the damages are
intentionally or negligently caused by the Entrepreneur(s); the PLA prescribes that the seller(s) shall
only be liable in the case where the manufacturer, the hirer, or the importer cannot be identified.
In this regard, an “unsafe product” refers to a product which causes or may cause damages either
by its manufacture defect; or its design defect; or by having no instruction preservation, warning
messages, or relevant information about the product; or having incorrect or unclear information with
regards to its nature including its usual usage and preservation.
Under the PLA, the injured person needs only to prove that he or she suffers from damages caused
by the Entrepreneur’s products and the usage or preservation of such products by its nature without
needing to prove which Entrepreneur causes such damage.
However, an Entrepreneur shall not be liable for damages caused by the unsafe products if they
can prove that: (i) such products are not unsafe products; (ii) the injured person has already been aware
that the products are unsafe; or, (iii) the damages were caused by an incorrect usage or preservation
when an Entrepreneur has put the correct and clear usage, preservation, warning message or relevant
information on the product.
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Personal Data Protection Law
The main legislation governing personal data protection in Thailand is the Personal Data
Protection Act B.E. 2562 (the “ Thailand PDPA ”).
Thailand PDPA is applicable to a foreign entity located and operated overseas when such entity
collects, uses, or disclose personal data of individuals in Thailand for the purposes of offering goods or
services to the data subjects in Thailand. As we offer goods and services to the data subjects in Thailand
and collects, uses, and discloses personal data (e.g., names, addresses, and payment information) of
buyers of the products who are located in Thailand for such purposes, we may be considered a “data
controller” and subject to certain obligations under the Thailand PDPA, which includes:
i. Privacy Notice: We may have a duty to provide privacy notice to the data subject containing
various information, e.g., the purpose of collection, the data to be collected, and the
categories of third parties to whom such data disclosed prior to or at the time of data
collection. This privacy notice requirement is typically satisfied by posting a privacy notice
that is easily accessible to the relevant individuals, such as on our website.
ii. Legal Bases and Consent: Personal data can only be collected, used, and/or disclosed with
consent of individuals, unless legal bases (e.g., contractual performance basis, legal
obligations basis, or legitimate interest basis) can be relied upon, and that the personal data
is used in accordance with the purpose notified in the privacy notice unless a new purpose
has been notified and consent (or legal basis) has been obtained for the use of such data.
iii. Cross-Border Transfer of Personal data: The cross-border transfer of the personal data of
data subjects located in Thailand is restricted unless (i) the destinated countries have
adequate personal data protection standards (yet to be determined by the Personal Data
Protection Committee (the “ PDPC ”), which is the authority in charge of overseeing the
Thailand PDPA in Thailand); (ii) consent is obtained from the data subject after having been
informed of the inadequate standards; (iii) we implement suitable protection measures which
enable the enforcement of data subjects’ rights, including effective legal remedial measures;
(iv) we transfer data to other companies within our group under approved corporate rules; or
(v) the transfer falls under other exemptions to be published by the PDPC.
iv. On-going obligations: We may be required to (a) implement appropriate security measures;
(b) notify personal data breach to the Office of the PDPC, including to the individuals
concerned (under certain circumstances); (c) take action to prevent unlawful or unauthorized
use or disclosure of personal data; and (d) prepare and maintain records of processing
activities under the Thailand PDPA; among others.
Importation of Goods
Under Thai laws, importation of certain goods may be subject to permit, license, custom tariff
and/or value added tax. However, the obligations to obtain the relevant permit and/or license, and to pay
the applicable custom tariff and/or value added tax, fall upon the importer (in the case of us, the
customer who orders the goods from us is deemed to be the importer) of such goods.
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LA WS AND REGULATIONS IN SINGAPORE
Below is a summary of the laws and regulations in Singapore which are relevant to our Group’s
business.
Import and Export
Regulation of Imports and Exports Act 1995
Under the Regulation of Imports and Exports Act 1995 of Singapore (“ RIEA ”), the Minister of
Trade and Industry may make regulations for the registration, regulation and control of all or any class
of goods imported into, exported from, transhipped in or in transit through Singapore. The Regulation
of Imports and Exports Regulations (“ RIER ”) was prescribed in 1999 to control the import, export or
transhipment of certain goods through the requirement of permits. In addition, the importation and
exportation of specific products into and out of Singapore may be subjected to certain registration
requirements imposed by the relevant governmental authorities in Singapore.
Under the RIEA, any person who imports, exports or tranships any goods and either applies or
causes an incorrect trade description to be applied to the goods, or has in his possession for sale or trade
any goods which have an incorrect trade description, may be liable on conviction to a fine and/or
imprisonment. Trade descriptions mean any description, statement or indication which, directly or
indirectly and by whatever means given, relates to the place of origin, manufacture or production of the
goods. Additionally, where there is suspicion of contravention of the regulations under the RIEA or
RIER, the RIEA grants designated personnel specific powers to:
(a) examine, open or search any package, box, chest or article;
(b) remove any package, box, chest or article or any goods to a police station or examination
station; or
(c) enter upon any islet, landing place, wharf, dock, railway or quay or the premises of a
provider of licensed port services or facilities, without a warrant, for the purposes of
exercising the powers in (a) and (b).
Consumer Protection
Consumer Protection (Fair Trading) Act 2003
The Ministry of Trade and Industry oversees the implementation of the Consumer Protection (Fair
Trading) Act 2003 of Singapore (“ CPFTA ”). The CPFTA is administered by the Competition and
Consumer Commission of Singapore (with effect from 1 April 2018) and aims to protect consumers
against unfair practices and to give consumers additional rights in respect of, amongst others, goods that
do not conform to contract.
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The CPFTA grants consumers additional rights and remedies against sellers for non-conforming
goods. The CPFTA will apply to a contract of sale of goods if the buyer deals as consumer, and the
goods do not conform to the applicable contract at any time within the period of six (6) months starting
from the date on which the goods were delivered to the buyer, and if the contract was made on or after
September 1, 2012. Goods do not conform to a contract of sale of goods if there is, in relation to the
goods, a breach of (a) an express term of the contract, (b) the implied condition that the goods will
correspond with the description or samples provided by the seller to the buyer, or (c) the implied
condition that the goods are of satisfactory quality or fitness for the purpose for which the goods were
supplied.
Under the CPFTA, buyers will have a statutory right to demand the repair or replacement of
nonconforming goods. The seller will have to repair or replace the non-conforming goods at its own
costs, within a reasonable period of time and without causing significant inconvenience to the buyer. If
the seller fails to do so or if repair or replacement is impossible or disproportionately costly, buyers may
instead require the seller to reduce the price paid for the goods or may reject the goods altogether and
obtain a refund.
Consumer Protection (Trade Descriptions and Safety Requirements) Act 1975
The Consumer Protection (Trade Descriptions and Safety Requirements) Act 1975 of Singapore
(“CPTSA ”) prohibits application of a false trade description to any goods and supply of goods which
have a false trade description. A false trade description under the CPTSA includes a trade description
which is false or likely to mislead, whether from anything contained in or omitted from the description.
Under the CPTSA, the Minister of Trade and Industry may by regulations impose requirements for
ensuring that, amongst others:
(a) certain goods are marked with or accompanied by any information or instruction;
(b) any description of advertisements of certain goods should contain or refer to any information
relating to the goods, or of an indication of how such information may be obtained; and
(c) certain goods are subject to safety requirements relating to composition, design,
construction, finish and packing and marked with or accompanied by any information,
warning or instruction.
Under the Consumer Protection (Safety Requirements) Regulations (“ CPSRR ”), no person is
allowed to supply specified controlled goods unless these goods are registered with the Enterprise
Singapore Board, conform to the prescribed safety requirements and have the Safety Mark affixed to
them. In the event of non-compliance, the Enterprise Singapore Board is empowered under the CPSRR
to require any person to effect a recall of the controlled goods which were sold in contravention of the
CPSRR and take steps to inform users of the controlled goods of potential dangers associated with such
use. A person who breaches these provisions shall be guilty of an offense and shall be liable on
conviction to a fine not exceeding S$2,000 or to imprisonment for a term not exceeding 12 months or to
both.
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Data Protection
Personal Data Protection Act 2012
The Personal Data Protection Act 2012 of Singapore (the “ Singapore PDPA ”) governs the
collection, use and disclosure of individuals’ personal data (i.e. data, whether true or not, about an
individual who can be identified from that data or other information accessible to the relevant
organization), and seeks to ensure that organizations comply with a baseline standard of protection for
personal data of individuals.
An organization is required to comply with the following obligations under the Singapore PDPA:
(a) Accountability obligation – organizations must develop and implement the necessary
policies and practices in order to meet its obligations under the Singapore PDPA and make
information about its policies and practices available on request;
(b) Notification obligation – individuals must be notified of the purposes for the collection, use
or disclosure of their personal data, prior to such collection, use or disclosure;
(c) Consent obligation – the consent of individuals must be obtained for any collection, use or
disclosure of their personal data, unless exceptions apply. Additionally, an organization must
allow the withdrawal of consent which has been given or is deemed to have been given;
(d) Purpose limitation obligation – personal data must be collected, used or disclosed only for
purposes that a reasonable person would consider appropriate in the circumstances, and if
applicable, have been notified to the individual concerned;
(e) Accuracy obligation – an organization must make reasonable efforts to ensure that personal
data collected by or on its behalf is accurate and complete if such data is likely to be used to
make a decision affecting the individual or if such data will be disclosed to another
organization;
(f) Protection obligation – an organization must implement reasonable security arrangements
for the protection of personal data in its possession or under its control;
(g) Retention limitation obligation – an organization must not keep personal data for longer
than it is necessary to fulfil: (i) the purposes for which it was collected; or (ii) a legal or
business purpose;
(h) Transfer limitation obligation – personal data must not be transferred out of Singapore
except in accordance with the requirements prescribed under the Singapore PDPA;
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(i) Access and correction obligations – when requested by an individual and unless exceptions
apply, an organization must: (i) provide that individual with access to his personal data in the
possession or under the control of the organization and information about the ways in which
his personal data may have been used or disclosed during the past year; and/or (ii) correct an
error or omission in his personal data that is in the possession or under the control of the
organization; and
(j) Data breach notification obligation – organizations must take steps to determine, in the
event of a data breach, whether it likely results in significant harm to individuals, and/or are
of significant scale, and is hence considered a notifiable breach, of which the data breach
must be brought to the attention of the PDPC and/or affected individuals.
If an organization is found to be in breach of the Singapore PDPA, the Personal Data Protection
Commission of Singapore may require the organization to (i) stop collecting, using or disclosing
personal data in contravention of the Singapore PDPA; (ii) destroy personal data collected in
contravention of the Singapore PDPA; (iii) provide access to or correct the personal data; and/or (iv)
pay a financial penalty of an amount not exceeding S$1 million or 10% of the organization’s annual
turnover in Singapore, whichever is higher. A contravention of the Singapore PDPA may also give rise
to civil or criminal liabilities.
LA WS AND REGULATIONS IN SOUTH KOREA
Below is a summary of the laws and regulations in South Korea which are relevant to our Group’s
business.
The Act on Consumer Protection for Transactions through Electronic Commerce
A business operator, pursuant to the Act on Consumer Protection for Transactions through
Electronic Commerce, is required to take necessary measures to maintain the security of consumer
information related to our electronic settlement services. A business operator is also required to notify
consumers when electronic payments are made and to indemnify consumers for damages resulting from
misappropriation of consumer information by third parties.
The Personal Information Protection Act
The Personal Information Protection Act and related legislation, regulations, and orders (the
“PIPA”) governs the collection, use, dissemination, storage, and destruction of personal information.
PIPA specifies the circumstances under which consent must be obtained to collect, use, or disseminate a
person’s personal information. PIPA places limits on the circumstances in which personal information
can be required and on the collection of some types of personal information (such as identifiers granted
by law for identification purposes). PIPA grants an individual right to request perusal, correction, or
deletion of one’s own personal information, and specifies the methods to exercise such rights.
Additionally, PIPA establishes requirements for information destruction, such as a requirement that
personal information should be destroyed if it is no longer necessary to achieve the purpose for which it
was collected.
Under PIPA, in the event a leak of personal information is discovered, the processor of personal
information is required to promptly notify the affected person(s). PIPA requires notification to the
authorities and other measures in certain circumstances.
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PIPA imposes monetary remedies, penalties, and statutory damages for violations of its
restrictions. Class action relief for the leakage of personal data is available in certain circumstances,
and some conduct, such as collection of personal information without consent, can be subject to
criminal punishment.
LA WS AND REGULATIONS IN JAPAN
Below is a summary of the laws and regulations in Japan which are relevant to our Group’s
business.
Data Protection
The Act on the Protection of Personal Information (Act No. 57 of 2003, as amended)
The Act on the Protection of Personal Information (Act No. 57 of 2003, as amended) imposes
various requirements on businesses that use databases containing personal information. Under this Act,
any holder of personal information must lawfully use such personal information and must not use it
beyond the scope of the the purposes specified when the information was obtained. Entities holding
personal information are also restricted from providing personal information to third parties, subject to
certain narrow exceptions. This Act is also applicable to the operators outside Japan which obtain
personal information in relation to the provision of goods or services to persons in Japan.
Consumer Protection Regulation
The Act on Specified Commercial Transaction (Act No. 57 of 1976, as amended)
Pursuant to the Act on Specified Commercial Transactions, a seller must include certain details of
a product in its advertisement and application form, when such advertising and application for purchase
are done via websites or other media, and where the transaction of the product is conducted via
communication devices (postal mail or other information processing devices). These details include
selling prices, timing and means of paying, time of delivery, the applicable policy on
withdrawal/cancellation of the transaction. A seller is also prohibited from making misleading
advertisements, as well as sending advertisements via email without the consent of the recipient.
The Specified Commercial Transactions Act prohibits “indication that differs vastly from the
truth” or “indication that misleads people into believing that it is vastly better or more advantageous
than it is in reality” in order to prevent consumer problems caused by misleading advertising, or
advertisements which vastly differ from the truth (Art. 12).
Trademark Act (Act No. 127 of 1959, as amended)
The Trademark Act aims to protect registered trademarks. A holder of registered trademark right
or an exclusive license thereof may demand a person who infringes or is likely to infringe the trademark
right or the exclusive license to stop or prevent such infringement.
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Product Liability Act (Act No. 85 of July 1, 1994)
The Product Liability Act sets forth the liabilities of a manufacturer or importer for damages
caused by defects in a product. A seller who was not involved in the manufacturing or import of a
product could still be liable under this Act if its name was indicated on the product and consumers are
led to believe that the seller was the manufacturer or importer. Liability under this Act can be imposed
even if the manufacturer or importer (and the said seller) was not negligent.
LA WS AND REGULATIONS IN TAIW AN
Below is a summary of the laws and regulations in Taiwan which are relevant to our Group’s
business.
Cross-Strait Regulations
The Act Governing Relations between the People of Taiwan Area and the Mainland Area
(“Cross-Strait Act ”), along with its accompanying regulations, is the primary law in Taiwan that
governs relations between the people of Taiwan and Mainland China. Its main objective is to safeguard
the security and well-being of the people of Taiwan, regulate interactions between the people of Taiwan
and the mainland China, and address legal issues that may arise from such interactions.
The trade of goods between Taiwan and Mainland China is regulated by Article 35 of the
Cross-Strait Act and the Regulations Governing Trade between the Taiwan Area and the Mainland Area
(“Cross-Strait Trading Rule ”). According to these regulations, products that are not prohibited or
restricted by the Taiwan competent authorities or Taiwan can be traded and imported to Taiwan without
the need for a special import license. Goods that may endanger Taiwan’s regional security or have
serious negative impacts on related industries will not be permitted for importation to Taiwan. Any
violation of the Cross-Strait Trading Rule may result in punishment by the competent authority in
Taiwan, including the suspension of export-import goods for a period of two months to one year, or the
revocation of registration as an exporter or importer.
According to Article 34 of the Cross-Strait Act and the Regulations for Advertising Goods, Labour
and General Services of the Mainland Area in Taiwan (the “ Cross-Strait Advertising Rule ”), products
that are legally permitted to be imported in accordance with the Cross-Strait Trading Rule may be
advertised or promoted in Taiwan.
Fair Trade Act
A business operator is subject to the Fair Trade Act when conducting business in Taiwan. The Fair
Trade Act is administered and enforced by the Fair Trade Commission of Taiwan. The Fair Trade Act
regulates business activities which might involve unfair competition, including monopolies, mergers,
concerted actions and improper restriction of competition.
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Under the Fair Trade Act, a business operator is prohibited from preventing competitors’
participation or engagement in competition through inducement with low prices or other improper
means. A business operator is also prohibited from making or using false or misleading representations
relevant to the goods and services that may affect consumer decisions, either on the goods or in
advertisements relating thereto. A business operator may not engage in any deceptive or apparently
unfair conduct that may affect the market order.
If a business operator violates said restrictions, the Fair Trade Commission may order the business
operator to cease or rectify its conduct or take necessary corrective action, and/or impose fines ranging
from NT$50,000 to NT$25 million. For any failure to meet the deadline for rectification, the business
operator may further be punished by consecutive fines ranging from NT$100,000 to NT$50 million each
time until the rectification is made.
Personal Data Protection Act
The main statute governing personal data protection in Taiwan is the Personal Data Protection Act
(“Taiwan PDPA ”).
Under the Taiwan PDPA, the scope of “personal data” covers a natural person’s name, date of
birth, ID card number, occupation, contact information and any other information that may be used to
directly or indirectly identify a natural person. The Taiwan PDPA applies to all of the data collection
and processing activities taking place in Taiwan without regard to whether the data subjects are
residents of Taiwan or not. International data transfers are permitted under the Taiwan PDPA, unless the
central competent authority issues any order to prohibit or restrict international data transfers.
When collecting or processing personal data, a non-government agency is required to notify the
data subject on certain matters specified under the Taiwan PDPA, which in general include the identity
of the non-government agency; the purposes of the collection; the type of data collected; the term, place
and method of use; and the data subject’s rights and the manner in which such rights may be exercised.
The collection, processing, and use of personal data shall not go beyond the necessary extent of
the purposes for which the data was collected, and must be reasonably and justifiably related to such
purposes.
For sending marketing communications without a legal basis for collection, or if the marketing
activities are not compatible with the specific purposes for which the data was collected as prescribed
under the Taiwan PDPA, a non-government agency may be subject to an administrative fine of up to
NT$500,000 and will be ordered to take corrective measures; otherwise, it may be fined consecutively
until correction is made.
On June 5, 2013, the Ministry of Justice of Taiwan issued a letter (Ref. No.
Fa-Lyu-Chih-10203503410) stating that the PDPA in Taiwan would apply if an offshore company
collects, processes, or uses personal data within Taiwan. To date, the competent authority has not
provided specific explanations on whether the collection, processing, or use of personal data of Taiwan
residents by an offshore company through the Internet (where the webpages and servers are located
overseas) would be subject to the Taiwan PDPA.
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Product Liability
Generally speaking, the consumer protection regulatory regime in Taiwan, mainly including the
Civil Code and the Consumer Protection Act, applies to the consumer relations within Taiwan.
A consumer is entitled to seek compensation from a product manufacturer/distributor for their
personal injury or damage to property incurred in connection with defective or faulty products primarily
based on the aforesaid laws and regulations. For example, (i) if the product distributor has warranted the
quality of the products, the consumer may claim for damages due to non-performance, instead of
rescission of the contract or of a reduction of the price (Article 360 of the Civil Code); or (ii) a
manufacturer is liable for any damage caused by its products, unless it is able to prove that the products
have met and complied with the contemporary technical and professional standards of reasonably
expected safety requirements prior to the launching of such products into the market (Articles 7 and 8 of
the Consumer Protection Act). In addition, for a defective product, if a manufacturer/distributor
breaches their statutory obligations, such as fraud, criminal or civil liability may also be imposed on
them.
For overseas consumer disputes (including but not limited to product liability issues), according to
the announcement of the Consumer Protection Committee, Executive Y uan, considering that they may
be subject to private dispute resolution, consumers may seek remedies via the enterprise’s local
competent consumer dispute authority.
LA WS AND REGULATIONS IN SAUDI ARABIA
Below is a summary of the laws and regulations in Saudi Arabia which are relevant to our Group’s
business.
Personal Data Protection
The Saudi Personal Data Protection Law (“ PDPL ”) is the Kingdom’s first comprehensive data
protection law. The PDPL came into effect in September 2023 and was subject to a grace-period which
ended in September 2024. The competent supervisory authority is the Saudi Data and Artificial
Intelligence Authority (SDAIA).
The PDPL has extra-territorial scope, in that it applies to the processing of “personal data” (by any
means) that, relates to individuals that takes place in the Kingdom, including processing of Personal
Data of individuals residing in the Kingdom by parties that are outside the Kingdom.
The PDPL and the processing of personal data pursuant to the PDPL are based on the following
general principles:
• The purpose of collecting personal data must be directly related to the purposes of the
controlling entity, and not conflict with any provision of law.
• The methods and means of collecting personal data may not conflict with any provision of
law, and be appropriate to the circumstances of its owner, and be direct, clear, safe, and free
from methods of deception, misleading or extortion.
• The content of personal data must be appropriate and limited to the minimum necessary for
achieving the purpose of collecting it, while avoiding including anything that leads to
specifically identifying its owner, as long as the purpose of collecting it is achieved.
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• If it becomes clear that the personal data collected is no longer necessary for achieving the
purpose of its collection, the controlling entity must stop collecting it and immediately
destroy the data that it has previously collected.
These principles aim to ensure that the collection of personal data is lawful, fair, relevant and
proportionate, and that the data subject’s rights and interests are respected.
Consent is the primary legal basis for processing personal data under the PDPL. However,
personal data may be processed without the consent of the data subject under the following exceptions:
• If the processing serves actual interests of the data subject, but communicating with the data
subject is impossible or difficult
• If the processing is pursuant to another law or in implementation of a previous agreement to
which the data subject is a party
• If the controller is a public entity and the processing is required for security purposes or to
satisfy judicial requirements
• Processing is necessary for the purpose of legitimate interest of the controller (without
prejudice to the rights and interests of the data subject) and provided that no sensitive data is
to be processed.
Under the PDPL, data subjects have the following rights with respect to their personal data:
• Right to be informed
• The right of access and the right to obtain personal data in a readable and clear format
• The right to request correction, completing or updating personal data and the right to request
the destruction/erasure of personal data
• The right to restrict processing and the right to object to processing
• The right to lodge a complaint
• The right to withdraw consent (if consent is the only applicable legal basis for processing)
With respect to international transfers of personal data, Article 29 of the PDPL allows for personal
data to be disclosed or transferred outside of the Kingdom for limited purposes and subject to certain
conditions being met, including the condition that transfers are only made to countries that provide an
adequate level of protection for personal data.
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Even if the recipient country is not granted “adequacy status”, transfers of personal data are still
permissible, provided that an appropriate safeguard is implemented. The Regulation on Personal Data
Transfer Outside the Kingdom (Transfer Regulations) provide the following safeguards:
• binding common rules (appropriate for intra-group transfers)
• standard contractual clauses (model clauses issued by SDAIA which can be adopted by the
transferring parties)
• accreditation certifications (further guidance on this safeguard is pending).
Breaches of the PDPL can attract significant penalties with fine of up to SAR 5 million (approx.
USD1.3 million).
E-Commerce Regulations
The Saudi E-Commerce Law, enacted to regulate online sales and protect consumers, mandates
that e-commerce platforms and sellers provide detailed information about the terms of service, return
and exchange policies, and accurate product descriptions. Additionally, data protection and privacy are
emphasized, requiring businesses to safeguard consumer data and inform customers about data usage.
The E-Commerce Law governs online commercial activities, emphasizing consumer protection,
data privacy, and transaction security:
• Data Protection: Requires businesses to protect personal data and inform customers about its
use.
• Cybersecurity Measures: Mandates the implementation of robust cybersecurity protocols to
safeguard online transactions and customer information.
• Regulatory Compliance: Online businesses must ensure compliance with licensing, taxation,
and import/export regulations.
The E-Commerce Law has extraterritorial scope and applies to foreign e-commerce service
providers that are providing goods to customers in the Kingdom. As per the E-Commerce Law and its
implementing Regulations, e-commerce service providers are required to comply with the following
obligations when concluding sales online:
• Disclose their name or any identifying characteristic, their contact information, and any
other data specified by the Regulations in their e-shop, unless they are registered with an
e-shop authentication entity (this registration requirement only being available to
e-commerce operators established in Saudi Arabia).
• Provide the consumer with a statement that includes the terms and conditions of the contract,
as well as information related to the service provider, the basic characteristics of the
products or services, the total price, the arrangements for payment, processing, and delivery,
the warranty information, and any other information specified by the Regulations.
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• Provide the consumer with an itemized invoice stating the total price, including all charges
and taxes, and delivery fees, if any, as well as the date and place of delivery, as specified by
the Regulations.
• Not retain, use, or disclose the consumer’s personal data or electronic communications for
unauthorized or impermissible purposes, unless the consumer consents or is required by law,
and they must take necessary measures to protect and maintain the confidentiality of such
data.
• Comply with the rules governing electronic advertisements, which must not include false or
misleading statements, claims, or representations, or counterfeit or unauthorized logos or
trademarks, and which must include the name of the advertised product or service, the name
of the service provider and any identifying characteristic, the contact information of the
service provider, and any other information specified by the Regulations.
• Respect the consumer’s right to rescind the contract within seven days from the date of
receipt of the product or the date of the service contract, unless the product or service falls
under the exceptions specified by the Law or the Regulations, or the consumer has used or
benefited from the product or service.
• Breaches of the E-Commerce Law can result in penalties that include one or more of the
following: a warning, a fine not exceeding 1,000,000 riyals (approx. USD 266,000),
temporary or permanent suspension of the e-commerce activity, and blocking the e-shop,
partially or completely, temporarily or permanently, in coordination with the competent
authority.
Product Liability in Saudi Arabian Jurisdiction
Product liability is a critical area of focus, ensuring that businesses are held accountable for the
safety and integrity of their products. This responsibility is anchored in a combination of consumer
protection laws, specific regulations issued by the Saudi Standards, Metrology, and Quality
Organization (SASO), and principles derived from Islamic Sharia, which collectively safeguard
consumer interests and uphold the principle of harm prevention.
Consumer Protection Laws
Saudi Arabia’s consumer protection framework is designed to safeguard consumers’ rights,
ensuring transparency, quality, and fairness in commercial transactions. The Consumer Protection
Association, under the auspices of the Ministry of Commerce, enforces:
This law is the cornerstone of product liability, setting out the rights of consumers and the
obligations of businesses. It mandates that all products must meet established safety standards and be
free from defects. Businesses are required to provide clear, truthful information about their products and
to warn consumers of any potential risks.
The Saudi Consumer Protection Association (SCPA) and the Ministry of Commerce play pivotal
roles in enforcing consumer protection laws. These entities ensure that businesses adhere to practices
that protect consumers from unfair practices, with regulations that are increasingly aligned with
international standards to support the Kingdom’s Vision 2030 economic reforms.
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Businesses must provide consumers with clear information about products or services, including
quality, price, warranty, and return policies. This information must be transparent and accessible before
the conclusion of any sale, as stipulated in the Saudi Commerce Law, to ensure consumer trust and
confidence in online transactions.
• Pre-contractual Information: Businesses must provide clear information about products or
services before any transaction, including price, quality, warranty, and return policies.
• E-Commerce: Online sellers must adhere to the Commerce Law, which mandates the
disclosure of full details regarding merchant identity, product specifications, and consumer
rights.
• Consumer Rights: Regulations protect consumers against misleading advertising, and
defective goods, and enforce the right to return or exchange products within a specified
period.
In cases of product defects or harm, companies are subject to the provisions of the Consumer
Protection Law, which can involve compensatory measures, fines, and mandatory product recalls.
Liability is assessed based on negligence, breach of warranty, or strict liability principles, depending on
the circumstances surrounding the product issue.
Saudi Standards, Metrology and Quality Organization (SASO)
The Saudi Standards, Metrology and Quality Organization (SASO) is a government agency under
the Saudi Ministry of Commerce. Established to maintain and enforce standards for quality and safety
across all products and services in the Kingdom, SASO’s primary objectives include:
• Protecting Consumers: Ensuring products and services within the market comply with safety
and quality standards to protect consumer health and safety.
• Enhancing Product Quality: Promoting higher quality in manufacturing and service provision
to boost the competitiveness of Saudi products domestically and internationally.
• Facilitating Trade: Streamlining the trade process by adopting and enforcing international
standards, thus removing technical barriers to trade.
SASO’s technical regulations and standards play a pivotal role in defining product safety and
quality requirements. Compliance with SASO standards is not optional; it’s a legal requirement for all
products marketed in Saudi Arabia. These standards cover a wide range of products, from electrical
appliances to toys, ensuring they meet specific safety and environmental criteria. Implications of
Product Liability:
• Liability for Defective Products: Businesses may face claims if their products cause harm
due to defects in design, manufacturing, or inadequate instructions/warnings. The law covers
various remedies for consumers, including repair, replacement, or compensation.
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• Recalls and Penalties: In cases where products are found to be unsafe, companies may be
required to initiate recalls to remove these products from the market. Failing to comply with
safety regulations or to address harmful product issues can result in significant penalties,
including fines, business license revocation, and legal action.
For businesses operating in or exporting to Saudi Arabia, actively monitoring SASO’s updates on
technical regulations and standards is crucial. Engaging in regular compliance audits, obtaining
necessary certifications, and aligning product development processes with SASO’s guidelines are
proactive steps to ensure compliance and minimize product liability risks.
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OVERVIEW
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. The history of our Group can be traced back to December 2003 when our Company
was founded by Ms. Zhuang Hao ( ୿ख) (our executive Director and general manager).
Ms. Zhuang Hao has over 25 years of experience in the packaging and advertisement industry. Ms.
Zhuang Hao served as a manager of our Company upon establishment and was subsequently appointed
as a Director in 2003, after which she has continued to serve as a Director and was also appointed as the
general manager of our Company in 2022. Please refer to the section headed “Directors, Supervisors
and Senior Management” for further details of Ms. Zhuang Hao’s background and experience.
Founded in 2003, we set out on providing one-stop paper packaging products and services to
FMCG enterprise customers, focusing on providing marketing strategies, product design, process
design, technology planning, transportation and logistics. As the core of our packaging business is
essentially grounded in product design and marketing that ultimately center around end consumer needs
and desires, we have accumulated deep understanding and experience in both product marketing and
discovering consumer demands. Seeking to expand our business beyond our decades-long packaging
business, we seized the business opportunities from the burgeoning of cross-border e-commerce driven
by the development of the mobile Internet in 2017 by building our cross-border social e-commerce
business empowered by data and driven by technology.
BUSINESS MILESTONES
The following table sets forth the business milestones of our Group:
Y ear Milestones
2003 Our Group was founded and began our packaging business
2006 We established Xiamen Jihong Printing Co., Ltd. (Langfang Branch)* ( ข
ʮ఼̡ѥʱʮ̡ )
2009 We established Hohhot Jihong Printing Packaging Co., Ltd.* ( խձखत
ʮ̡ )
2010 Our Company was converted into a joint stock limited company
2016 We were listed on the SZSE (stock code: 002803)
2017 We commenced our cross-border social e-commerce business with the
establishment of Xiamen Giikin E-commerce Co., Ltd.* (Ιཥ
ʮ̡ )
2018 We were recognized as the 31st place amongst Top 100 Printing and
Packaging Enterprise in China ( ʕ਷ΙՏ̍ༀΆุ 100 ੶ୋ31Τ)
2019 We were recognized as a Top 50 SME Listed Company in China by V alue
(࠽50੶)
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Y ear Milestones
We were awarded the Outstanding Growth Listed Company Golden
Intelligence Award (“౽ᆤ ”ɪ̹ʮ̡ )
2020 Our A Shares were included in the Shenzhen and Hong Kong Connect list
of securities
2021 We were included in the FTSE Global Equity Index Series
We were awarded the China New Economy Most V aluable Listed
Company Award (ɪ̹ʮ̡ᆤ )
2022 We were recognized as a Xiamen Top 100 Private Enterprise
(̹͏ᐄΆุ 100 ੶)
We were awarded the first Ethical Trade and Responsible Sourcing
certification by BRCGS in Asia
We were recognized as the 5th place amongst Top 100 Printing and
Packaging Enterprise in China ( ʕ਷ΙՏ̍ༀΆุ 100 ੶ୋ5Τ)
2023 We were recognized as one of the Top 100 Private Enterprises in Fujian
Province (͏ᐄΆุ 100 ੶), one of the Top 100 Private Enterprises
in Service Industry in Fujian Province (ਕุ͏ᐄΆุ 100 ੶)
and the 31st place amongst Top 100 Private Enterprises in Xiamen (ژ
̹͏ᐄΆุ 100 ੶ୋ31Τ)
Our GiiMall platform won the Global Digital Trade Fair Pioneer Award
(DT Award) (௹ᚎึ΋ቜᆤ (DT ᆤ))
2024 We were recognized as one of the Top 100 Private Enterprises in Fujian
Province (͏ᐄΆุ 100 ੶), the 30th place amongst Top 100
Private Enterprises in Service Industry in Fujian Province (ਕุ
͏ᐄΆุ 100 ੶ୋ30Τ), the 28th place amongst Top 100 Private
Enterprises in Xiamen (̹͏ᐄΆุ 100 ੶ୋ28Τ) and one of the Top
20 Private Enterprises in Service Industry in Xiamen (؂
ਕุ20੶)
OUR CORPORATE HISTORY
Establishment of Our Company
Our Company, initially known as Xiamen Jihong Printing Co., Ltd.* (ʮ̡ )
(“Jihong Limited ”), was established in the PRC on December 24, 2003, with a registered share capital
of RMB1,518,000. At the time of establishment, our Company was owned as to 65.0%, 25.0% and
10.0% by Ms. Zhuang Hao, Mr. Zhuang Shu (brother of Ms. Zhuang Hao) and Ms. Ma Dongying
(mother of Ms. Zhuang Hao and Mr. Zhuang Shu), respectively.
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Equity Transfers in 2010
Following a series of capital increases, Jihong Limited had a registered share capital of
RMB70,000,000 as at May 26, 2010, and was owned as to 65.0%, 25.0% and 10.0% by Ms. Zhuang
Hao, Mr. Zhuang Shu and Ms. Ma Dongying, respectively.
Pursuant to equity transfer agreements dated July 1, 2010 between Ms. Zhuang Hao and Y ongyue
Investment, and between Mr. Zhuang Shu and Y ongyue Investment, Ms. Zhuang Hao and Mr. Zhuang
Shu transferred an 8.1% equity interest and a 3.1% equity interest in Jihong Limited, respectively, to
Y ongyue Investment. Pursuant to equity transfer agreements between (1) Ms. Ma Dongying and
Y ongyue Investment; (2) Ms. Ma Dongying and Mr. Zhang Heping ( ੵձ̻ ); and (3) Ms. Ma Dongying
and Ms. He Jingying ( ൭᎑጑ ), Ms. Ma Dongying agreed to transfer approximately 1.3% equity interest,
4.4% equity interest and 4.4% equity interest in Jihong Limited to Y ongyue Investment, Mr. Zhang
Heping and Ms. He Jingying, respectively. Y ongyue Investment is the predecessor of Tibet Y ongyue, a
member of our Single Largest Group of Shareholders, and was owned as to approximately 71.4% by Mr.
Zhuang Zhenhai (ऎ ), father of Ms. Zhuang Hao and Mr. Zhuang Shu, as of the Latest Practicable
Date. For further details, please refer to the paragraph headed “– Our Shareholders Acting in Concert”
in this section. Mr. Zhang Heping is an executive Director of our Company and the spouse of Ms.
Zhuang Hao. Ms. He Jingying is the spouse of Mr. Zhuang Shu, an executive Director of our Company.
The aforesaid equity transfers were approved on July 19, 2010, upon which the shareholding
structure of Jihong Limited was as follows:
Name of Shareholder
Approximate
shareholding
in our
Company
(%)
Ms. Zhuang Hao ( ୿ख)(1)(2)(3) 56.9
Mr. Zhuang Shu ( ୿⤳)(1)(2)(3) 21.9
Y ongyue Investment (3) 12.4
Mr. Zhang Heping ( ੵձ̻ )(1) 4.4
Ms. He Jingying ( ൭᎑጑ )(2) 4.4
Total 100.0
Notes:
1. Ms. Zhuang Hao, an executive Director, is the spouse of Mr. Zhang Heping and the sister of Mr. Zhuang Shu, both of
whom are executive Directors of our Company.
2. Mr. Zhuang Shu, an executive Director, is the brother of Ms. Zhuang Hao, and Ms. He Jingying is the spouse of Mr.
Zhuang Shu.
3. Y ongyue Investment is the predecessor of Tibet Y ongyue, and as at the Latest Practicable Date, it was owned as to
approximately 71.4% by Mr. Zhuang Zhenhai, 15.4% by Ms. Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.7%
by Ms. Xu Ping. Mr. Zhuang Zhenhai is the father of Ms. Zhuang Hao and Mr. Zhuang Shu, both of whom are
executive Directors. Ms. Gong Hongying is a director of three subsidiaries of our Company and a supervisor of six
subsidiaries of our Company. As of the Latest Practicable Date, Mr. Li Jiadong and Ms. Xu Ping were independent
third parties.
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Increase of registered share capital and conversion into a joint stock limited company in 2010
On July 20, 2010, our then Shareholders resolved to increase the registered share capital of our
Company from RMB70,000,000 to RMB85,000,000 by the capital injection of RMB36,900,000
(RMB15,000,000 as paid-in registered capital and RMB21,900,000 as capital reserve) by Jinrunyue.
The capital injection was fully settled in cash on July 23, 2010. Immediately following the aforesaid
capital injection, our Company had a registered share capital of RMB85,000,000.
Pursuant to a shareholders’ resolution dated October 28, 2010, our then Shareholders resolved to
(1) convert Jihong Limited into a joint stock limited company; (2) convert the net assets of Jihong
Limited into 85,000,000 issued shares at a nominal value of RMB1.0 each attributable to its
shareholders in proportions to their original shareholdings and the remaining net assets to be credited
into capital reserves; and (3) rename Jihong Limited as Xiamen Jihong Package Technology Ltd.* (ژ
ʮ̡ ).
On December 3, 2010, our Company was converted into a joint stock company, with a registered
share capital of RMB85,000,000, and the shareholding structure of our Company was as follows:
Name of Shareholder
Number of
Shares
Approximate
shareholding in
our Company
(%)
Ms. Zhuang Hao ( ୿ख)(1)(2)(4) 39,812,500 46.8
Mr. Zhuang Shu ( ୿⤳)(1)(2)(4) 15,312,500 18.0
Jinrunyue (3) 15,000,000 17.7
Y ongyue Investment (4) 8,750,000 10.3
Mr. Zhang Heping ( ੵձ̻ )(1) 3,062,500 3.6
Ms. He Jingying ( ൭᎑጑ )(2) 3,062,500 3.6
Total 85,000,000 100.0
Notes:
1. Ms. Zhuang Hao, an executive Director, is the spouse of Mr. Zhang Heping and the sister of Mr. Zhuang Shu, both of
whom are executive Directors of our Company.
2. Mr. Zhuang Shu, an executive Director, is the brother of Ms. Zhuang Hao, and Ms. He Jingying is the spouse of Mr.
Zhuang Shu.
3. Jinrunyue is a limited partnership established in the PRC. To the best knowledge of our Company, each of Jinrunyue
and its limited partners and general partner is an independent third party.
4. Y ongyue Investment is the predecessor of Tibet Y ongyue, and immediately upon the completion of the aforesaid
equity transfers, was owned as to 60.0% by Ms. Lin Qiaohong (ߎ20.0% by Mr. Wang Jincang ( ˮᎀᔛ ) and
20% by Mr. Wang Jingfu ( ˮ౻၅ ), all of whom were independent third parties at the material time.
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Increase of registered share capital in 2012
On December 12, 2012, our then Shareholders resolved to increase the registered share capital of
our Company and Haiyin Investment subscribed for 2,000,000 shares at a consideration of RMB5.0 per
share pursuant to a capital injection and share subscription agreement among our Company, Haiyin
Investment and our then Shareholders dated December 12, 2012. The consideration was determined
based on arm’s length negotiation between the relevant parties with reference to the market value of our
Company and was legally and irrevocably settled in cash on December 14, 2012. Immediately after the
completion of the subscription, the shareholding structure of our Company was as follows:
Name of Shareholder
Number of
Shares
Approximate
shareholding in
our Company
(%)
Ms. Zhuang Hao ( ୿ख)(1)(2)(4) 39,812,500 45.8
Mr. Zhuang Shu ( ୿⤳)(1)(2)(4) 15,312,500 17.6
Jinrunyue (3) 15,000,000 17.2
Y ongyue Investment (4) 8,750,000 10.1
Mr. Zhang Heping ( ੵձ̻ )(1) 3,062,500 3.5
Ms. He Jingying ( ൭᎑጑ )(2) 3,062,500 3.5
Haiyin Investment (5) 2,000,000 2.3
Total 87,000,000 100.0
Notes: 1 to 3: Please refer to the table under the paragraph headed “– Our Corporate History – Increase of Registered
Share Capital and Conversion into a Joint Stock Limited Company in 2010” in this section.
Note: 4 Y ongyue Investment is the predecessor of Tibet Y ongyue, and immediately upon the completion of the
aforesaid subscription, was owned as to approximately 60.0% by Mr. Zhuang Zhenhai, 15.4% by Ms.
Gong Hongying, 11.4% by Mr. Zhou Hong (ߎ11.4% by Mr. Wang Jincang and 1.7% by Ms. Xu Ping.
Mr. Zhuang Zhenhai is the father of Ms. Zhuang Hao and Mr. Zhuang Shu, both of whom are executive
Directors. Ms. Gong Hongying is a director of three subsidiaries of our Company and a supervisor of six
subsidiaries of our Company. At the material time, Mr. Zhou Hong, Mr. Wang Jincang and Ms. Xu Ping
were independent third parties.
Note 5: Xiamen Haiyin Biopharmaceutical Industry V enture Capital Partnership (Limited Partnership)* (ऎვ
ᔼᖹପุ௴ุҳ༟ΥྫΆุ (Υྫ )) (“ Haiyin Investment ”) was a limited partnership
established in the PRC in May 2011 and subsequently de-registered in August 2022. To the best
knowledge of our Company, at the material time, Haiyin Investment and each of its limited partners and
general partner are independent third parties.
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Listing of A Shares on the SZSE in 2016
On July 12, 2016, we completed the initial public offering of our A shares and listing on the main
board of the SZSE (stock code: 002803), involving an issue of 29,000,000 new A Shares. Immediately
after the listing of A Shares, the shareholding structure of our Company was as follows:
Name of Shareholder
Number of
Shares
Approximate
shareholding in
our Company
(%)
Ms. Zhuang Hao ( ୿ख)(1)(2)(4) 39,812,500 34.3
Mr. Zhuang Shu ( ୿⤳)(1)(2)(4) 15,312,500 13.2
Jinrunyue (3) 15,000,000 12.9
Y ongyue Investment (4) 8,750,000 7.5
Mr. Zhang Heping ( ੵձ̻ )(1) 3,062,500 2.7
Ms. He Jingying ( ൭᎑጑ )(2) 3,062,500 2.7
Haiyin Investment (5) 2,000,000 1.7
Other A Share Shareholders 29,000,000 25.0
Total 116,000,000 100.0
Notes: 1 to 3, 5: Please refer to the table under the paragraph headed “– Our Corporate History – Increase of Registered
Share Capital in 2012” in this section.
Note 4: Y ongyue Investment is the predecessor of Tibet Y ongyue, and upon the aforesaid listing and as at the
Latest Practicable Date, was owned as to approximately 71.4% by Mr. Zhuang Zhenhai, 15.4% by Ms.
Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.7% by Ms. Xu Ping. Mr. Zhuang Zhenhai is the father of
Ms. Zhuang Hao and Mr. Zhuang Shu, both of whom are executive Directors. Ms. Gong Hongying is a
director of three subsidiaries of our Company and a supervisor of six subsidiaries of our Company. As of
the Latest Practicable Date, Mr. Li Jiadong and Ms. Xu Ping were independent third parties.
In December 2021 and January 2022, our Company received a warning letter and a regulatory
letter (collectively, the “ Regulatory Letters ”) from the Xiamen Bureau of CSRC and the Main Board
Compliance and Disclosure Department of SZSE, respectively, both of which related to the breach of
the relevant regulations in relation to information disclosure in the PRC, namely, (1) its failure to
disclose related party transactions within the statutory timeframe due to an inadvertent oversight of the
responsible staff members of our Group; and (2) the inaccurate disclosure in its announcement
regarding the provision of financial assistance to certain grantees of 2021 Restricted Share Incentive
Plan, due to an inadvertent oversight by our Group’s responsible staff members and an insufficient
understanding of the relevant rules and regulations of our Group’s finance department personnel. As
advised by our PRC Legal Advisor, the Regulatory Letters were not regarded as a form of administrative
penalty and is not regarded as a material non-compliance, and our Company has completed the
rectification of all matters as set out in the Regulatory Letters in the prescribed timeframe and submitted
a rectification report to the Xiamen Bureau of CSRC. Save for the Regulatory Letters, since the listing
of our A Shares on the SZSE and up to the Latest Practicable Date, we had not received any notification
from the SZSE or the CSRC indicating that we were involved in any non-compliance issues. For the
same period, our Directors confirm that we had no instances of non-compliance with the rules or
regulations of the SZSE or the relevant laws and regulations in the PRC in all material respects, and to
the best knowledge of our Directors after having made all reasonable enquiries, there is no matter that
should be brought to investors’ attention in relation to our compliance record on the SZSE.
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Further, as advised by our PRC Legal Advisor, based on the filings on the website of the SZSE and
information available in the public domain, except for the matters as set out in the Regulatory Letters,
our Company (including our subsidiaries) or our Directors (for the performance of their duties as
directors of our Company (including our subsidiaries)) had not been subject to administrative penalty,
administrative supervision measures or self-regulatory measures by the SZSE, the CSRC or other
competent securities regulatory authorities during the period of our listing on the SZSE up to the Latest
Practicable Date.
Based on the independent due diligence conducted by the Joint Sponsors and our PRC Legal
Advisor’s view above, the Joint Sponsors are not aware of any material matters in relation to our listing
on the SZSE that need to be brought to the investor’s attention.
Increase of registered share capital in 2018
On October 24, 2018, our then Shareholders resolved to increase the registered share capital of our
Company with capital reserves, pursuant to which 7 shares for every 10 shares (total of 81,200,000
Shares) were issued pro rata to all existing Shareholders with capital reserve. As a result of the
foregoing, on January 3, 2019, our then Shareholders resolved to amend our Articles and to increase our
Company’s registered share capital from RMB116,000,000 to RMB197,200,000.
Private placement and change of our Company name in 2019
Pursuant to the share subscription agreements dated April 10, 2019, between our Company and
two institutional investors, namely, Hubei Gaotou Chankong Investment Co., Ltd.* ( ಳ̏৷ҳପછҳ༟
ʮ̡ ) and Ganzhou Development Financing Leasing Co., Ltd.* (ப΂
ʮ̡), respectively, our Company received considerations from the two aforementioned institutional
investors, for subscribing a total of 25,393,699 Shares of our Company by way of private placement,
both of which are independent third parties. Hubei Gaotou Chankong Investment Co., Ltd.* is a limited
liability company incorporated in the PRC, with a registered share capital of RMB500 million,
principally engaging in the asset management and investment businesses. Ganzhou Development
Financing Leasing Co., Ltd.* is a limited liability company incorporated in the PRC, with a registered
share capital of RMB2,000 million, principally engaging in the asset management and investment
businesses. The consideration was determined based on arm’s length negotiation between the relevant
parties with reference to the average price of A Shares of our Company in the twenty trading days prior
to April 11, 2019 (being the date of issuance of new Shares), and was legally and irrevocably settled in
cash. The following table sets out the details of the private placement.
HISTORY AND CORPORA TE STRUCTURE
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--- page 186 ---
Name of investor
Number of
Shares
subscribed
Price
per Share Consideration
Approximate
percentage of
shareholding
in the total
issued share
capital of our
Company
immediately
following the
completion of
the Global
Offering (1)
Hubei Gaotou Chankong
Investment Co., Ltd.* ( ಳ̏৷
ʮ̡ ) 3,690,944 RMB20.32 RMB74,999,982.08 0.81%
Ganzhou Development
Financing Leasing Co., Ltd.*
(ப΂
ʮ̡) 21,702,755 RMB20.32 RMB440,999,981.60 4.79%
Total 25,393,699 – RMB515,999,963.68 5.60%
As a result of the foregoing, on June 5, 2019, our then Shareholders resolved to amend our Articles
and to increase our Company’s registered share capital from RMB197,200,000 to RMB222,593,699. On
the same date, our then Shareholders also resolved to rename our Company as “Xiamen Jihong
Technology Co., Ltd”* (ʮ̡ ).
Increase of registered share capital in 2020
On May 6, 2020, our then Shareholders resolved to increase the registered share capital of our
Company with capital reserves, pursuant to which an increase of 7 shares for every 10 shares (total of
155,815,589 Shares) was issued pro rata to all Shareholders with capital reserve. As a result of the
foregoing, on July 6, 2020, our then Shareholders resolved to amend our Articles and to increase our
Company’s registered share capital from RMB222,593,699 to RMB378,409,288.
Adoption and cancelation of the 2021 Restricted Share Incentive Plan
With a view of formalizing our proposal to grant share incentives to eligible management and
employees of our Group, our then Shareholders resolved to adopt the 2021 Restricted Share Incentive
Plan on June 11, 2021, which granted 9,070,800 restricted A Shares to certain grantees, and our
Company’s registered share capital was increased by the same amount. As it was expected that the
performance target under the 2021 Restricted Share Incentive Plan might not be satisfied, the 2021
Restricted Share Incentive Plan was canceled in April 2022 and all of the 9,070,800 restricted A Shares
which were granted but still subject to the lock-up period were repurchased and canceled. Our
Company’s registered share capital was RMB378,409,288 upon the cancelation of the 2021 Restricted
Share Incentive Plan.
Note (1): The calculation is based on the total number of 452,679,288 Shares in issue immediately following the completion of
the Global Offering.
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Adoption of the 2023 Restricted Share Incentive Plan
With a view of formalizing our proposal to grant share incentives to eligible management and
employees of our Group, our then Shareholders resolved to adopt the 2023 Restricted Share Incentive
Plan on August 30, 2023, to grant 6,600,000 restricted A Shares to 203 then directors and/or employees
of our Group, accounting for approximately 1.74% of our Company’s then total share capital. 875,000
restricted A Shares were granted to Mr. Lu Tashan ( ௔̴ʆ ), an executive Director, 400,000 restricted A
Shares were granted to Mr. Wang Y apeng (؃the chairman of Board of Directors and an executive
Director, 50,000 restricted A Shares were granted to Mr. Wu Minggui (൮ ), the finance director, and
5,275,000 restricted A Shares were granted to 200 other management members and employees. The
grant price of each of the restricted A Shares was RMB9.51. On December 21, 2023, our then
Shareholders resolved to amend our Articles and to increase our Company’s registered share capital
from RMB378,409,288 to RMB385,009,288.
The 6,600,000 restricted A Shares are subject to different lock-up periods, which shall be 12
months, 24 months or 36 months starting from October 23, 2023, being the grant registration
completion date of the restricted A Shares. Accordingly, the restricted A shares shall be unlocked and
available for disposal during three unlocking periods, subject to performance targets of the Group and
each grantee. Please refer to “Appendix VI – Statutory and General Information – E. 2023 Restricted
Share Incentive Plan” for details.
As of the Latest Practicable Date and pursuant to the 2023 Restricted Share Incentive Plan, a total
of 6,600,000 restricted A Shares had been issued to the grantees. As of the Latest Practicable Date, all
the restricted A Shares under the 2023 Restricted Share Incentive Plan were granted and no restricted A
Shares under the 2023 Restricted Share Incentive Plan will be granted to any grantees after the Listing.
As of the Latest Practicable Date, all of our issued shares were A Shares and were traded on the
SZSE.
CONFIRMATION BY THE PRC LEGAL ADVISOR
As confirmed by our PRC Legal Advisor, the shareholding changes of our Group as discussed
above, including the increases of registered share capital and share issuance and transfers complied with
all applicable PRC laws and regulations.
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
As of the Latest Practicable Date, our Group did not have any major acquisitions, disposals or
mergers.
REASONS FOR THE LISTING
Our Company is seeking a listing of its H Shares on the Stock Exchange in order to provide further
capital for the development and expansion of our Company’s business, to strengthen our Company’s
working capital and to further strengthen our business profile and global presence. See the section
headed “Future Plans and Use of Proceeds” in this Prospectus.
HISTORY AND CORPORA TE STRUCTURE
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--- page 188 ---
OUR SHAREHOLDERS ACTING IN CONCERT
By virtue of the Takeovers Code, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang
Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue are deemed to be parties acting in concert. On February
5, 2024, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai,
Mr. Lu Tashan and Tibet Y ongyue executed an agreement (the “ Concert Parties Agreement ”), and
pursuant to which they constitute the Single Largest Group of Shareholders, holding approximately
32.1%
# and approximately 27.3% # of our Shares in aggregate as at the Latest Practicable Date, and
immediately upon completion of the Global Offering, respectively.
Pursuant to the Concert Parties Agreement, all members of the Single Largest Group of
Shareholders agreed that they shall act in concert in respect of each of the members of our Group.
Pursuant to the Concert Parties Agreement, it was confirmed that each of Mr. Zhuang Shu, Ms. He
Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue had acted in accordance with Ms.
Zhuang Hao’s instructions prior to the date of the Concert Parties Agreement and from when they each
held voting rights at the meetings of the shareholders of the Company. Furthermore, Ms. Zhuang Hao,
Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Tibet Y ongyue and Mr. Lu
Tashan have undertaken to act in concert directly or indirectly through the companies controlled by
them. They have also agreed to, among others, (i) vote unanimously at all meetings of the shareholders
of each member of our Group (for the avoidance of doubt, it shall not be a breach of the Concert Parties
Agreement if a party to the Concert Parties Agreement fails to cast a vote at all at a meeting of the
shareholders due to the absence of that party), (ii) discuss and reach consensus with each other before
proposing to such meetings, and act in concert in respect of the business operations, governance and
other key matters of our Group which shall be decided by the shareholders of each of the members of
the Group. In the event that consensus cannot be reached, Ms. Zhuang Hao’s view shall prevail and the
Single Largest Group of Shareholders shall reflect her view in their decisions in such meetings
accordingly. In addition, as advised by our PRC Legal Advisor, the members of the Single Largest
Group of Shareholders are parties acting in concert pursuant to PRC laws and regulations and the
Concert Parties Agreement, and the Concert Parties Agreement is valid and in compliance with PRC
laws and regulations.
As at the Latest Practicable Date, each of Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr.
Zhang Heping, Tibet Y ongyue (which is held as to 71.4% by Mr. Zhuang Zhenhai) and Mr. Lu Tashan
held 18.1%, 9.0%, 1.7%, 1.6%, 1.4% and 0.2%
# of our Shares, respectively.
# Includes 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan which shall only become saleable
upon the expiration of the corresponding lock-up periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and
General Information – E. 2023 Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the
performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any conditions or the
lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further
details of the Concert Parties Agreement, please refer to the paragraph headed “– Our Shareholders Acting in Concert” in this
section.
# Includes 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan which shall only become saleable
upon the expiration of the corresponding lock-up periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and
General Information – E. 2023 Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the
performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any conditions or the
lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further
details of the Concert Parties Agreement, please refer to the paragraph headed “– Our Shareholders Acting in Concert” in this
section.
HISTORY AND CORPORA TE STRUCTURE
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--- page 189 ---
Each of Ms. Zhuang Hao, Mr. Zhuang Shu, Mr. Zhang Heping and Mr. Lu Tashan is a Director of
our Company. Ms. Zhuang Hao is the spouse of Mr. Zhang Heping, and the sister of Mr. Zhuang Shu.
Ms. He Jingying is the spouse of Mr. Zhuang Shu. Mr. Zhuang Zhenhai is the father of Ms. Zhuang Hao
and Mr. Zhuang Shu.
Tibet Y ongyue is a limited company established in the PRC on June 30, 2010 and is principally
engaged in the provision of business management and consultancy services. As at the Latest Practicable
Date, Tibet Y ongyue was owned as to approximately 71.4% by Mr. Zhuang Zhenhai, 15.4% by Ms.
Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.71% by Ms. Xu Ping. Ms. Gong Hongying is a director
of three subsidiaries of our Company and a supervisor of six subsidiaries of our Company. As of Latest
Practicable Date, Mr. Li Jiadong and Ms. Xu Ping were independent third parties.
OUR PRINCIPAL SUBSIDIARIES
As of the Latest Practicable Date, we had 78 subsidiaries. The following table sets forth
subsidiaries of our Group which made material contribution to our results of operations during the
Track Record Period and up to the Latest Practicable Date:
Name
Place of
incorporation
Date of
incorporation
Date of
commencement
of business
Authorized
share capital/
Registered
capital
Principal business
activities
Hohhot Jihong PRC September 1,
2009
October 2010 RMB50,000,000 Packaging and
printing
Jiangxi Jihong PRC September 9,
2019
May 2020 RMB50,000,000 E-commerce; import
and export;
supply chain
management
Zhengzhou Jikeyin PRC August 23, 2017 August 2017 RMB5,000,000 Import and
export;
technology
development,
consultation,
exchange, transfer
and promotion;
software
development
HISTORY AND CORPORA TE STRUCTURE
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--- page 190 ---
Name
Place of
incorporation
Date of
incorporation
Date of
commencement
of business
Authorized
share capital/
Registered
capital
Principal business
activities
Xi’an Jikeyin PRC August 3, 2017 August 2017 RMB10,000,000 E-commerce; import
and export of
goods and
technology
Lucky Ecommerce Hong Kong SAR September 1,
2017
September 2017 USD1,000,000 E-commerce; import
and export;
advertising and
marketing
Hongkong Shize Hong Kong SAR October 8, 2021 October 2021 HKD1,000,000 E-commerce;
advertising and
marketing;
software
development
JYK Ecommerce Hong Kong SAR September 27,
2017
November 2017 USD50,000 E-commerce; import
and export;
advertising and
marketing
MAJOR DEREGISTRATION OF A SUBSIDIARY DURING THE TRACK RECORD PERIOD
The details of the deregistration of a subsidiary of our Group which contributed to impairment or
investment losses during the Track Record Period are as follows:
Deregistration of Xiamen Xinlongyue Recycled Paper Bag Co., Ltd. * (ʮ
̡) (“Xinlongyue ”)
Xinlongyue was deregistered on July 29, 2022. Xinlongyue, which was owned as to 51% our
Company, as to 39% by Xiamen Jingchengongmao Company Limited* (ʮ̡ ) and as
to 10% by Ms. Pan Ziqin ( ᆙഓೞ ) immediately before its deregistration, previously engaged principally
in the printing and packaging business. Each of Xiamen Jingchengongmao Company Limited*, its
ultimate beneficial owners and Ms. Pan Ziqin is an independent third party. Our Company decided to
close down Xinlongyue due to its lack of significant business activities. Xinlongyue was solvent at the
time of deregistration and the deregistration of such incurred investment losses during the Track Record
Period. As advised by our PRC Legal Advisers, the deregistration of Xinlongyue was duly completed
and was in full compliance with the applicable PRC laws and regulations. At the time of the
deregistration, as confirmed by our PRC Legal Advisers, Xinlongyue was not the subject of any
non-compliance nor was it involved in any pending or threatened litigation, arbitration or administrative
proceedings.
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--- page 191 ---
PUBLIC FLOAT
The 135,668,985 A Shares held by Mr. Wang Y apeng, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He
Jingying, Mr. Zhang Heping, Mr. Lu Tashan and Tibet Y ongyue as at the Latest Practicable Date,
representing approximately 35.3%
# and approximately 30.0% # of our Shares in aggregate as at the
Latest Practicable Date, and immediately upon completion of the Global Offering, respectively, will not
be considered as part of the public float upon the Listing since they will be considered as our
Company’s core connected persons (as defined in the Listing Rules). Except as stated above, all the A
Shares held by other Shareholders and the 67,190,000 H Shares to be issued under the Global Offering
will be counted towards the public float for the purpose of Rule 8.08 of the Listing Rules. Considering
the H Shares to be issued under the Global Offering (being approximately 15% of the total issued
number of Shares as enlarged by the H Shares to be issued pursuant to the Global Offering), and the A
Shares held in public hands, our Company will be able to meet the minimum public float requirement
under Rule 8.08(1)(b).
# Includes 728,750 restricted A Shares in total granted to Mr. Wang Y apeng and Mr. Lu Tashan under the 2023
Restricted Share Incentive Plan which shall only become saleable upon the expiration of the corresponding lock-up
periods (the next expiration period being 24 months after October 23, 2023) with satisfaction of performance targets
of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and General Information – E. 2023
Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the performance targets.
HISTORY AND CORPORA TE STRUCTURE
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--- page 192 ---
OUR SHAREHOLDING STRUCTURE IMMEDIATELY PRIOR TO THE GLOBAL OFFERING
The following diagram illustrates the corporate and shareholding structure of our Group immediately prior to the completion of the Global
Offering:
1.0%
1.4%
0.2%
1.5% 62.3%
1.6%
1.7%
3.2%
9.0%
18.1%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Ms. Zhuang
Hao(1)(2)(4)(9)
Mr. Zhuang
Shu(1)(2)(4)(9)
Mr. Wang
Yapeng(3)
Our Company
Hohhot Jihong
Jiangxi Jihong(10)
JYK
Ecommerce(13)
Lucky
Ecommerce
Hongkong Shize
Xi’an Jikeyin(12)
Other subsidiaries(14)
Zhengzhou
Jikeyin(11)
Ms. He
Jingying(2)(9)
Mr. Zhang
Heping(1)(9)
Tibet Yongyue(4)(9)
2022 Employee
Share Ownership
Plan(5)
Treasury
Shares
Account(6)
Mr. Lu Tashan(7)(9)
Other
A Share
Shareholders(8)
Remark: Shareholdings in the above diagram are based on figures as at the Latest Practicable Date.
HISTORY AND CORPORA TE STRUCTURE
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--- page 193 ---
Notes:
(1) Ms. Zhuang Hao, an executive Director of our Company, is the spouse of Mr. Zhang Heping and the sister of Mr. Zhuang Shu, both of whom are executive Dir ectors of our
Company. Ms. Zhuang Hao is also the daughter of Mr. Zhuang Zhenhai.
(2) Mr. Zhuang Shu, an executive Director of our Company, is the spouse of Ms. He Jingying, the brother of Ms. Zhuang Hao (an executive Director of our Com pany), and the son of
Mr. Zhuang Zhenhai.
(3) Mr. Wang Y apeng is the chairman of Board of Directors and an executive Director of our Company. Mr. Wang’s shareholding includes 260,000 restricte d A Shares granted under
the 2023 Restricted Share Incentive Plan which shall only become saleable upon the expiration of the corresponding lock-up periods (the next expirat ion period being 24 months
after October 23, 2023) with satisfaction of performance targets of the Group and Mr. Wang.
(4) Tibet Y ongyue is a limited company established in the PRC and as of the Latest Practicable Date, it was owned as to 71.4% by Mr. Zhuang Zhenhai, who is t he father of Ms.
Zhuang Hao and Mr. Zhuang Shu.
(5) A single securities account was opened for the purpose of the 2022 Employee Share Ownership Plan. For further details, please refer to the section h eaded “ Appendix VI –
Statutory and General Information” in this Prospectus.
(6) A single securities account was opened for the purpose of holding the treasury shares, which were repurchased by the Company pursuant to the 2023 Sh are Repurchase Plan. For
further details, please refer to the section headed “Appendix VI – Statutory and General Information” in this Prospectus.
(7) Mr. Lu Tashan is an executive Director of our Company. Mr. Lu’s shareholding consists of (i) 306,250 A Shares granted under the 2023 Restricted Shar e Incentive Plan which
were released from lock-up in accordance with the 2023 Release Mechanism on October 23, 2024; and (ii) 568,750 restricted A Shares granted under the 20 23 Restricted Share
Incentive Plan which shall only become saleable upon the expiration of the corresponding lock-up periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu. Please refer to “Appendix VI – Statutory and General Information – E. 2023 Restricted Share Incentive Plan”
for details of the 2023 Restricted Share Incentive Plan and the performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any
conditions or the lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further details of the Concert Parties
Agreement, please refer to the paragraph headed “– Our Shareholders Acting in Concert” in this section.
(8) As at December 31, 2024, there were approximately 35,056 other A Share Shareholders. None of the other A Share Shareholders were core connected per sons (as defined under
the Listing Rules) of our Company and shall be counted into the public float.
(9) Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and Tibet Y ongyue were parties acting in concert , and constituted
the Single Largest Group of Shareholders as of the Latest Practicable Date. For further details, please refer to the paragraph headed “– Our Sharehold ers Acting in Concert” in
this section.
(10) Jiangxi Jihong is wholly owned by Shenzhen Jilian Blockchain Technology Co., Ltd.* (ʮ̡ ), which is in turn directly wholly-owned by our Company.
(11) Zhengzhou Jikeyin is wholly owned by Xiamen Jikeyin E-Commerce Co., Ltd.* (ʮ̡ ), which is in turn directly wholly owned by our Company.
(12) Xi’an Jikeyin is wholly owned by Xiamen Jikeyin E-Commerce Co., Ltd.* (ʮ̡ ), which is in turn directly wholly-owned by our Company.
(13) JYK Ecommerce is wholly-owned by Xi’an Jinyinke E-commerce Co., Ltd.* (ʮ̡ ), which is in turn wholly owned by Xiamen Jinkeyin Ecommerce
Co., Ltd.* (ʮ̡ ), our directly wholly-owned subsidiary.
(14) These companies are our subsidiaries which had no material contribution to our Group’s financial results during the Track Record Period and up to the L atest Practicable Date.
HISTORY AND CORPORA TE STRUCTURE
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--- page 194 ---
OUR SHAREHOLDING STRUCTURE IMMEDIATELY FOLLOWING THE GLOBAL OFFERING
The following diagram illustrates the corporate and shareholding structure of our Group immediately following the completion of the Global
Offering:
52.9%
0.2% 15.0%0.9%
1.2%1.2%
1.4%
1.5%
2.7%
7.6%
15.4%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Ms. Zhuang
Hao(1)(2)(4)(9)
Mr. Zhuang
Shu(1)(2)(4)(9)
Mr. Wang
Yapeng(3)
Ms. He
Jingying(2)(9) Tibet Yongyue(4)(9)
2022 Employee
Share Ownership
Plan(5)
Other
A Share
Shareholders(8)
Other
H Share
Shareholders
Mr. Zhang
Heping(1)(9)
Our Company
Mr. Lu Tashan	
	
Hohhot Jihong
Jiangxi Jihong(10)
JYK
Ecommerce(13)
Lucky
Ecommerce
Xi’an Jikeyin(12)
Other subsidiaries(14)
Zhengzhou
Jikeyin(11)
Hongkong Shize
Treasury
Shares
Account(6)
Remark: Shareholdings in the above diagram are based on figures as at the Latest Practicable Date.
Notes (1) to (14): Please refer to the diagram contained under “– Our Shareholding Structure Immediately Prior to the Global Offering” in this section.
HISTORY AND CORPORA TE STRUCTURE
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OVERVIEW
About Us
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. After our listing on the SZSE in 2016, supported by the leadership and industry
experience of our management team, we successfully transformed and diversified our business while
attaining achievements from both business and financial perspectives. As a leading cross-border social
e-commerce company strategically focusing on the Asian market, we ranked second among China’s B2C
outbound e-commerce players based on revenue generated through social media e-commerce business in
Asia in 2024, with a market share of 1.3%, according to CIC. Furthermore, we are a leading FMCG
paper packaging company in Mainland China, and ranked first among FMCG paper consumer packaging
companies in Mainland China based on revenue in 2024, with a market share of 1.2%, according to CIC.
For each year of the Track Record Period, our total revenue amounted to RMB5,375.9 million,
RMB6,694.7 million and RMB5,529.3 million, respectively. During the same periods, our profit
amounted to RMB171.6 million, RMB332.1 million and RMB184.5 million, respectively.
Founded in 2003, we set out on providing one-stop paper packaging products and services to
FMCG enterprise customers, focusing on providing marketing strategies, product design, process
design, technology planning, transportation and logistics. As the core of our paper packaging business
is essentially grounded in product design and marketing that ultimately center around addressing end
consumers’ needs and spur their purchase desires, we have accumulated deep understanding and
experience in both product marketing and discerning consumer demands. Seeking to expand our
business beyond our decades-long paper packaging business, we seized the business opportunities from
the burgeoning of cross-border e-commerce driven by the development of the mobile Internet by
building our cross-border social e-commerce business in 2017, which has become our major source of
revenue. Empowered by data insights and technology and capitalizing on a new era of cross-border
e-commerce through the mobile Internet, we place targeted advertisements on social media platforms to
attract consumers to purchase products precisely recommended to them based on our data analysis. Our
business model allows us to effectively leverage traffic from the social media, which is recognized as
the fastest-growing source of Internet traffic in China’s B2C outbound e-commerce market, according to
CIC.
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AI Facilitating Our Business Development
Cumulative
Production
V olume
Long-term accumulation of supply chain and
consumer preference insights, along with a strong creative design foundation
Cumulative
Consumer
Count
Inventory
Turnover Days
Utilization
Rate
Order
Fulﬁllment Rate
Inventory to
Sales Ratio
Paper
Packaging
Business
Cross-border
Social
E-commerce
Business
~2.8
billion
sq.m.
3.2%~4.0%
54.5~58.7
55.7%~66.5%
84.9%~88.4%
~17.0 million
Note: Relevant data is provided for the Track Record Period.
For details regarding the terms used in the above diagram, see “– Our Cross-border Social
E-commerce Business – Key Operating Metrics” and “– Our Paper Packaging Business – Key Operating
Metrics” in this section.
In our cross-border social e-commerce business, we deploy our dynamic data analytical
capabilities to perform precise product discovery and recommendation, place targeted advertisements
online to attract consumers from social media traffic to our landing pages, which are transactional web
pages that pop up in response to a user’s click on a link or advertisement displayed on a social media
platform, and ultimately market and sell affordable and high-quality products from Mainland China to
overseas consumers around the world. Our cross-border social e-commerce business connects suppliers
in Mainland China with consumers across Asia, as well as Europe and North America. For each year of
the Track Record Period, revenue from our cross-border social e-commerce business accounted for
57.8%, 63.6% and 60.9% of our total revenue, with its gross profit margin amounting to 59.1%, 63.1%
and 60.5%, respectively. For each year of the Track Record Period, the high gross profit margin of our
cross-border social e-commerce business has become the key driver of our gross profit margin, as a
whole, which reached 40.5%, 46.4% and 43.8%, respectively.
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We are among a limited number of FMCG paper packaging companies in Mainland China that
have the capability to provide one-stop paper packaging products and services covering the entire
production process. With process design and technology planning at the crux of our competence, we
integrate marketing strategies, product design, process design, technology planning, transportation and
logistics into our all-inclusive paper packaging products and services, and continuously pre-empt
consumer needs by innovating in materials, designs and products. Exemplifying our commitment to
environmental protection and ESG principles, we prospectively invested in developing environmentally
friendly packaging, following the global prevalence of restrictions on plastic use. Over the years, we
have established and maintained long-term cooperation with leading FMCG companies, laying a solid
foundation for generating stable revenue and cashflows through our paper packaging business. During
the Track Record Period, we recorded robust cashflow performance. For each year of the Track Record
Period, our cash generated from operations, as a whole, reached RMB391.0 million, RMB725.6 million
and RMB386.7 million, respectively.
Our business is driven by our management team members, who steer us with their
forward-thinking decision-making capabilities, apply their industry experience and knowledge of the
latest trends into every significant decision, and contribute their pathbreaking spirit to tackle every
opportunity. Ms. Zhuang Hao ( ୿ख), our executive Director and general manager, has over 25 years of
experience first in the advertising and packaging industry and then in the social e-commerce industry.
Under her leadership, we expanded our revenue base from a marketing design business to a one-stop
paper packaging business, while at the same time substantially increasing our revenue. For many years,
Ms. Zhuang has been precisely keeping a pulse on the latest business trends, proactively expanding our
revenue streams, and critically making significant decisions aligned with our business development.
Owing to her leadership and resolute decision-making, in 2017, we captured the business opportunities
in cross-border e-commerce and successfully established an additional revenue stream. Mr. Wang
Y apeng (؃the chairman of the Board of Directors and executive Director, has more than 20 years
of experience in Internet marketing and cross-border commerce business, and has consistently focused
on providing overseas integrated marketing solutions and technology services to Chinese export
enterprises. Under Mr. Wang’s direction, we have achieved significant growth in our cross-border social
e-commerce business.
Our R&D Achievements and Milestones
As of December 31, 2024, we had two R&D centers in Xiamen and Zhengzhou, and maintained a
R&D team of more than 500 members. As of March 31, 2025, we owned 4 patents and 140 software
copyrights in relation to the development of algorithms, software systems, and other technology for our
cross-border social e-commerce business, and 362 patents and 17 software copyrights in relation to the
design and manufacture of packaging for our paper packaging business. With our persistence and
continuous investment in R&D, we strive to revolutionize and steer the development of the industries in
which we operate.
Since the inception of our paper packaging business in 2003, we have continued to optimize our
packaging design processes and technology to ensure product quality and minimize wastage and
environmental pollution. Our digitalization capabilities also empower each process in our paper
packaging business including design and production, optimize our comprehensive paper packaging
products and allow us to achieve higher and more consistent quality. In line with our continuous
development and devotion, we calibrated our developmental direction in accordance with social trends
and general consumer needs, and strengthened our position to become one of the leading companies in
the FMCG paper packaging industry in Mainland China, which eventually allowed us to become listed
on the SZSE in 2016.
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Riding on new opportunities from the development of mobile Internet in Asia and China’s strong
industrial chains, in 2017, we expanded into the cross-border social e-commerce business. We adopted a
social e-commerce business model that discovers target customers actively and precisely, making
significant investments in our AI-empowered technology infrastructure. Leveraging AI algorithms and
models, we self-developed our Giikin system specifically for our cross-border social e-commerce
business. Through the AI applications integrated into our Giikin system, we seamlessly connect every
stage of our business process with limited human intervention, from product discovery, advertisement
placement, product procurement to transportation and logistics. We also have cooperated with
well-known enterprises to conduct R&D in AI applications in e-commerce. We are among the first
companies empowering their business with AI technology in Mainland China, according to CIC. In
2021, we entered into a strategic cooperation with Huawei to further develop applications for
digitalization in cross-border social e-commerce in cloud computing, image processing, big data and AI.
In 2021, through accumulating experience and understanding consumer preferences and needs
from our social e-commerce business model, we began developing our own brands leveraging our data
analytical capabilities empowered by our in-depth knowledge of consumers in different regions. As of
the Latest Practicable Date, we had established six brands including SENADA BIKES, V eimia, Konciwa
and PETTENA. Under these brands, we sold products ranging from electric bikes, lingerie, UV
umbrellas and pet accessories on our designated brand websites and e-commerce platforms.
In 2021, we perceived that a large number of Chinese brands and SMEs lacked tools and resources
to sell their products abroad through e-commerce. Through our experience in the cross-border
e-commerce industry, we have acquired deep understanding of the challenges and difficulties that
market players face in each stage of the cross-border social e-commerce business, including product
promotion, creation of payment system and logistics arrangement. In 2022, we synthesized and
standardized our experience and professional knowledge in the cross-border e-commerce industry to
develop our GiiMall SaaS system, specifically customized to digitally empower suppliers in
cross-border e-commerce transactions. Leveraging technologies developed as part of our Giikin system,
our GiiMall SaaS system modularizes processes, systems and applications to effectively enhance
cross-border e-commerce operation efficiency and consumer experience, and helps suppliers stand out
in an intensely competitive market. In 2023, we further strengthened our cooperation with Huawei,
which would deepen our development of AI applications in our cross-border social e-commerce
business based on Huawei’s large-scale data model in the areas of AIGC, application modernization,
data crawling and data governance, with a view to enhancing digitalization in each stage of our
cross-border social e-commerce business.
Through the above achievements and advancements, we have steadily expanded our business scope
and scale. In the past 10 years, despite adverse factors including macro-environmental and supply chain
challenges, we still achieved outstanding business and financial performance and continued to stride
through Mainland China and overseas markets.
Our Cross-Border Social E-Commerce Business
We provide diverse Chinese consumer goods to overseas consumers with a strategic focus in Asia,
including our own brands. We deploy AI algorithms to conduct in-depth analysis on overseas market
information and to understand our consumers. Based on our analysis, we discover products, and
advertise them on mainstream social media platforms such as Meta (including Facebook and Instagram),
TikTok, Google (including Y ouTube), Line, Snapchat and X (formerly Twitter), to sell them overseas.
By a single click on the advertisements, consumers are forwarded to our self-generated transactional
landing pages to complete their purchase online. We sell products to overseas consumers predominantly
in Asia.
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Our self-developed operation and management system “Giikin” is the backbone of our
cross-border social e-commerce business. Our Giikin system is integrated with our digitalization
capabilities, allowing us to adaptably navigate the long and complex industrial chain that is emblematic
of cross-border social e-commerce. Leveraging AI empowerment technologies, we have successfully
developed several AIGC technologies and applied them to front-end applications covering product
discovery, image content design, video content generation, advertisement copywriting and translation
and advertisement placement, as well as back-end applications such as customer service, all of which
are integrated into Giikin, facilitating the digitization, visualization and intelligentization of our
cross-border social e-commerce business. With our full-chain digitalization capabilities, we have
realized efficient supply chain management by adopting a distinctive operation model where we procure
products from suppliers after our consumers place orders. This supply chain model allows us to
effectively maintain low inventory levels and maintain robust cashflows, ultimately translating into
greater flexibility in our cash management and higher operational efficiency. Empowered by Giikin, our
supply chain management system enhances our logistics efficiency, enabling us to deliver products to
our consumers typically within seven days and provide them with a seamless shopping experience from
placing orders to receiving products.
Different from the traditional model where sellers are dependent on e-commerce platforms and
platform traffic, we operate our cross-border social e-commerce business primarily by leveraging social
media traffic, which provides us with business autonomy. Specifically, we do not rely on any individual
product category or any e-commerce platform for any of our primary business processes including
product discovery, traffic management and product sales. We apply a wide-array product strategy,
covering household products, apparel products, electronic products, footwear products, luggage and bag
products, cosmetic and personal care products, healthcare products, maternity and baby products, and
watches and accessories. This strategy allows us to discover suitable products based on latest market
trends and demand in each geographic location without being restricted to one type of product, and
benefit from the diversity of products and suppliers available in Mainland China. This strategy also
allows us to constantly discover and sell popular products. We place advertisements on different social
media platforms to channel diverse traffic, eliminating dependence on any specific social media
platform.
Our social e-commerce business model that discovers target customers actively and precisely
allows us to retain business autonomy, which is distinctive of the business model of the third-party
e-commerce platforms. At the early stage of our cross-border social e-commence business, without the
restrictions of third party e-commerce platforms, our business model reduced the need to maintain
significant inventories, allowing us to quickly attain profitability, and further reduced the risks of
relying on platform traffic. Having attained profitability and accumulated significant data analytical
capabilities which have allowed us to overcome the disadvantages associated with third-party
e-commerce platforms, we have started selling products of our own brands on our designated brand
websites as well as third-party e-commerce platforms, allowing our products to reach a greater
audience. At the same time, we continue to accumulate data insights through interaction with our
e-commerce consumers, allowing us to benefit from an iterative virtuous cycle leveraging our efficient
business model – we consistently improve our dynamic data analytical capabilities and train AI models
using our data insights, which allows us to continually optimize our product discovery and
advertisement placement processes by gaining a more precise understanding of our consumers, and in
turn enhances the accuracy of our order fulfillment rate prediction and pricing models, leading to better
sales performance, higher ROI, and higher fulfillment rates, and ultimately translating into better
financial performance. Benefiting from our industry experience, we have also developed a one-stop
service SaaS platform called GiiMall targeting China-based cross-border e-commerce suppliers.
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Our Paper Packaging Business
We provide one-stop paper packaging products and services to FMCG enterprises, and have
distinguished ourselves by providing distinctive marketing design and green paper packaging products.
Our one-stop paper packaging products and services cover marketing strategies, product design, process
design, technology planning, transportation and logistics. Our primary products are color packaging
cartons/boxes, eco-friendly paper bags, and food packaging, catering for our enterprise customers’
paper packaging needs. Our enterprise customers include leading enterprises in FMCG industries such
as food and beverage, catering and household chemical products. As of December 31, 2024, we operated
10 packaging and printing production facilities located across North, Northwest and Central Mainland
China, strategically located near our existing enterprise customers, allowing us to respond to their needs
in a timely fashion. Our broad geographical coverage also provides us with opportunities to cooperate
with new enterprise customers. As testament to our quality standards, our production facilities have
been awarded a number of professional certifications, such as ISO9000 quality management system,
ISO14001 environmental system, and the first BRCGS ETRS social responsibility certification in Asia.
We are dedicated to actualizing any paper packaging ideas for our FMCG enterprise customers, in
the same way as “turning a script into a film”. We provide product design, process design and
technology planning based on our enterprise customers’ needs and requirements, target audience and
budgets, to address their diverse design, material and cost considerations at the same time. We strive to
present our enterprise customers’ brand philosophy to their consumers with creative designs, making
their products stand out to elicit attention and stimulate demand. We proactively advocate ESG
principles, support our enterprise customers’ environmentally friendly and low carbon requirements,
and strategically develop and expand our green paper packaging business, including adopting
environmentally friendly biodegradable raw paper of approximately 99% among our total purchases of
raw paper in 2024, as part of improving sustainability in our paper packaging business. Furthermore, we
have strategically enhanced our production capability of green packaging to address our enterprise
customer needs. Our one-stop service approach has allowed us to enhance our enterprise customers’
trust and stickiness, supporting the steady development of our paper packaging business.
Our Market Opportunities
According to CIC, the size of China’s B2C outbound e-commerce market based on revenue
generated through social media e-commerce business in Asia, is expected to reach US$69.5 billion in
2029 from US$29.1 billion in 2024, with a CAGR of 19.0%. This growth is expected to be driven by a
number of factors. The rise of social media has continued to stimulate more personalized consumer
needs and facilitate the sales of products through e-commerce, becoming one of the most dominant
global business trends. According to CIC, Asian users have a preference for shopping online through
social media platforms. However, in recent years, the social media e-commerce penetration rate in Asia
(excluding Mainland China) has been increasing faster than the global average, providing significant
potential for future growth. As a result, Asia has become one of the primary export destinations for B2C
outbound social e-commerce companies. Furthermore, China’s consumer goods supply chain continues
to present distinguishing competitive advantages in pricing, quality, design and other attributes, driven
by (1) it being comprehensive and highly efficient, and (2) its unsaturated production capacity that can
cater to extensive consumer needs. With the continuous advancement in the global logistics network and
changes in consumption habits, transactional costs of cross-border e-commerce have vastly decreased,
allowing more overseas consumers to access quality products that are made in Mainland China. As
policies supporting the cross-border e-commerce industry continue to be strengthened, the “One Belt
One Road” initiative continues to advance, and the industry ecosystem continues to grow, China’s B2C
outbound social media e-commerce business is expected to have significant room for growth.
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Leveraging our data-driven management system, our extensive supply chain network and our
dynamic data analytical capabilities, we are able to realize our social e-commerce business model in
discovering target customers actively and precisely, which positions us to benefit from growing
opportunities brought by the significant demand for Chinese suppliers to sell their goods abroad and
increasing demand by global consumers for high quality Chinese consumer goods. A large number of
upstream consumer goods SMEs in Mainland China do not have the capability to sell their products
overseas, which poses distinct challenges embedded in the complexity and uncertainties arising from
cross-border logistics processes such as transportation, customs clearance and tax payment, as well as
from using different currencies and payment systems, and language barriers. In addition to these
challenges, companies must also thoroughly understand the local customs of its consumers and localize
their advertisement marketing strategies. Empowered by our Giikin system that was specifically
constructed to address these challenges, we are favorably positioned to benefit from the growth in
China’s B2C outbound social media e-commerce industry.
The FMCG paper consumer packaging industry in Mainland China boasts an immense scale.
According to CIC, as measured by revenue, the market size of FMCG paper consumer packaging
industry in Mainland China is expected to reach RMB222.7 billion for 2029 from RMB170.3 billion for
2024. The FMCG paper consumer packaging market is expected to continue to advance driven by
factors such as supportive policies for environmentally friendly packaging, and advancements in
technology capabilities of paper packaging enterprises. At the same time, a large number of paper
packaging SMEs are expected to exit the market as only large paper consumer packaging providers can
cater to the needs of top-tier FMCG enterprises, encouraging leading larger enterprises to expand their
market share through consolidation. As a leading one-stop FMCG paper packaging company, we expect
to benefit from these growth opportunities.
Our Operational Achievements
During the Track Record Period, our business continued to grow. According to CIC, we ranked
second among China’s B2C outbound e-commerce players based on revenue generated through social
media e-commerce business in Asia in 2024, with a market share of 1.3%. During the Track Record
Period, we had fulfilled more than 41 million orders for approximately 17.0 million consumers, and had
more than 611,000 SKUs. In 2024, our ROI was 191.1%, which was higher than the industry average,
according to CIC. For each year of the Track Record Period, our order fulfillment rate ranged from
84.9% to 88.4%. Our cross-border social e-commerce business is equipped with excellent operation and
inventory management capabilities. For each year of the Track Record Period, the inventory to sales
ratios of our cross-border social e-commerce business amounted to 3.7%, 3.2% and 4.0%, respectively,
which were below the industry average, according to CIC. As testament to our industry recognition, we
were awarded Global Pioneer ( Όଢჯঘᆤ ) by TikTok for Business in 2023.
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In terms of our paper packaging business, leveraging our high-quality and professional service, we
have continued to maintain long-term relationship with leading FMCG enterprises. We have established
close cooperation with well-known FMCG enterprises, such as Yili and Luckin Coffee, and a number of
world-leading QSR companies with operations in Mainland China. Our production volume of paper
packaging business witnessed a continuously increasing trend during the Track Record Period, from
846.7 million sq.m. for 2022 to 925.3 million sq.m. for 2023, and further to 1,026.1 million sq.m. for
2024. For each year of the Track Record Period, we achieved production utilization rates of
approximately 63.2%, 55.7% and 56.2%, respectively, for our packaging products. We are also capable
of managing our packaging inventory in an efficient manner. For each year of the Track Record Period,
the inventory turnover days of our paper packaging business amounted to 58.7 days, 57.4 days and 54.5
days, respectively, which were below the industry average, according to CIC. As testament to our
industry recognition, we ranked fifth in the “Top 100 Chinese Printing and Packaging Enterprises”
published by Printing Manager Magazine in 2022.
OUR COMPETITIVE STRENGTHS
Committed to continuously adapting, discovering and developing popular products and services,
and empowering Chinese brands to reach the world through digitalization, we believe the following
competitive strengths have contributed to our success:
We are an industry leader among B2C outbound social media e-commerce companies selling
products in Asia.
We are among the first B2C outbound social media e-commerce companies strategically focusing
on the Asian market. Riding on the rapid growth of the retail e-commerce industry in Asia and the
flourishing of social media, we started our cross-border social e-commerce business in 2017. According
to CIC, we ranked second among China’s B2C outbound e-commerce players based on revenue
generated through social media e-commerce business in Asia in 2024.
The business model of our cross-border social e-commerce business is distinctive of the business
model of selling on third-party e-commerce platforms in various aspects, including access to user
traffic, specific requirements on sellers and capital expenditures. Although this business model has
higher entry barriers, it provides us with greater flexibility necessitating less upfront cost of
maintaining significant inventories and allowing us to be more adaptive to market trends. This model
also provides us with more flexibility to accumulate data insights to better understand consumer needs
and preferences, which enhances the efficacy of our product discovery, advertisement placement, supply
chain management, and logistics management capabilities. Furthermore, we are not reliant on Internet
traffic from any single third-party platform or having to maintain online stores on e-commerce
platforms, and can flexibly place advertisements on the social media platforms that maximize marketing
efficacy and our profitability. Our business model allows us to effectively leverage social media traffic,
which is recognized as the fastest-growing source of Internet traffic in China’s B2C outbound
e-commerce market, according to CIC. Unlike companies which sell their products on e-commerce
platforms, our distinctive model also provides us with business autonomy, as we are not subject to the
seller restrictions imposed by third-party e-commerce platforms. We apply a wide-array product
strategy, which provides us with the freedom to swiftly adapt to the latest market trends for product
discovery without being restricted to any brand or any product category.
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Our cross-border social e-commerce business connects suppliers in Mainland China with
consumers across Asia, as well as Europe and North America. We place advertisements on global
mainstream social media platforms, including Meta (including Facebook and Instagram), TikTok,
Google (including Y ouTube), Line, Snapchat and X (formerly Twitter). We closely follow market trends
to iteratively discover and sell high quality Chinese consumer goods at a competitive price to consumers
around the world, cumulatively selling to approximately 17.0 million consumers during the Track
Record Period. We offer a product portfolio covering a wide array of product categories, and had more
than 611,000 SKUs during the Track Record Period. For each year of the Track Record Period, the
number of our fulfilled orders amounted to 11.7 million, 16.4 million and 13.8 million, respectively,
achieving economies of scale.
For each year of the Track Record Period, revenue from our cross-border social e-commerce
business amounted to RMB3,106.6 million, RMB4,256.6 million and RMB3,365.9 million, respectively.
Our accomplishment and leadership have been widely recognized in the industry. In particular, we have
been awarded Global Pioneer ( Όଢჯঘᆤ ) by TikTok for Business in 2023.
By leveraging data insights accumulated from cross-platform and cross-region transactions and
our relentless technological innovation, we believe we are well positioned to seize the significant
growing business opportunities in the B2C outbound social media e-commerce market in Asia.
Our integrated AI technologies permeate our comprehensive, effective and scalable operating
system.
Our cross-border social e-commerce business is effective and flexible, allowing us to navigate the
complex cross-border social e-commerce business environment and address diverse consumer needs.
Since the launch of our cross-border social e-commerce business in 2017, we have continued to train
and strengthen our data analytical capabilities and AI technologies, including AI pendant models,
machine learning and big data analytics.
We have integrated AI technologies into our entire business process, and continuously drive the
transformation of our business from digitization ( ᅰοʷ ) to digitalization ( ᅰ౽ʷ ). Corresponding to
key processes in cross-border social e-commerce, we successfully developed AI technologies covering
product discovery, image material design, video material generation, advertisement copywriting and
translation, precise product recommendation, advertisement placement and customer service, to elevate
our level of digitalization.
Product Discovery. Our Giikin system can assist our product discovery team to localize our
product discovery strategies, ensuring the discovered products cater to local consumer needs and
preferences. We deploy a product discovery tool embedded in our Giikin system to analyze historical
and current market trend data, helping us ascertain what goods to sell and what geographic locations to
sell them at based on consumer needs and preferences. This tool visualizes expected popularity and
profitability of product candidates by ranking them in a certain order based on different characteristics,
which enables our product discovery team to efficiently make decisions.
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Landing Page Generation and Advertising Development. Leveraging self-developed AI
technologies, we overcome a complex e-commerce environment in Asia with different cultures,
languages, ethnicities and expressions. For example, we self-developed ChatGiiKin-6B, an
e-commerce text-based pendant model, to enrich product label data in real time and to automatically
generate product titles, keywords and descriptions in diverse languages with different prompts and
assisting our product discovery team to quickly distill a product’s selling points and automate
advertisement content generation. We also cater to esthetic standards of different countries and regions
and seek to appeal to our target consumer audience by adapting different models to maximize appeal to
the target consumer audience. Through GiiAI, our product discovery team conveniently replaces
background music and translates subtitles to rapidly generate high-quality video advertisements. These
images, texts and videos further enrich our libraries of advertising materials, improving our product
discovery team’s efficiency in material production. For details on our landing pages, see “– Our
Cross-border Social E-commerce Business – Landing Page Generation.”
Advertisement Placement. Based on characteristics of the products, our Giikin system can select
the target consumer audience and advertisement styles to enhance the precision of advertisement
placement and maximize profitability. G-king, our technology-powered advertisement placement
assistant, is embedded in our Giikin system, which is connected to the advertising systems of social
media platforms such as Meta (including Facebook and Instagram), TikTok and Google (including
Y ouTube) through API. G-king analyzes advertising data to recommend more effective advertising
recommendations for our advertisement optimizers, assisting them in making decisions on advertising
budgets in a cost-effective manner.
Purchase and After-Sales Services. We utilize an AI bot to empower and facilitate our
cross-border social e-commerce business expansion. The AI bot assists in translating diverse languages
and generating automatic responses, enabling us to provide purchase and after-sales services to
consumers from different countries and regions without having to engage local customer service staff.
Our digitalization efforts have significantly enhanced our operation capabilities and effectively
converted our manual management processes into standardized and scalable systems. In 2024, our ROI
reached 191.1%. For each year of the Track Record Period, our order fulfillment rate ranged from
84.9% to 88.4%. We have also successfully deployed AI technologies to allow us to extend our data
analytical capabilities and experience to more countries and regions, assisting in our swift expansion.
We employ our Giikin system to discover popular products, and we replicate our data analytical
capabilities in new geographic locations to precisely place localized advertisements and provide
after-sales services in new countries and regions through social media platforms. Benefiting from this,
we expand and replicate our business to new regions using a small team of product discovery,
advertisement placement and content generation staff.
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Our dynamic data analytical capabilities provide a solid foundation for our social e-commerce
business model.
Owing to our first-mover advantages, we have accumulated a large amount of consumer behavior
data insights generated from our cross-border social e-commerce business, based on which we conduct
data analysis and build our algorithm capabilities. Through our business operations, we have
accumulated in-depth understanding of the ROI of advertisement placement on a wide range of
channels. Distinguished from traditional e-commerce platforms, we obtain social media platform user
data analysis from digital marketing service providers and social media platforms, which allows us to
precisely assign tags to products when placing advertisements and efficiently conduct re-marketing to
other consumers who have the same or similar needs. The data analysis provides us with information
such as the number of clicks by user type and click conversion rate by time and/or by location. In
addition, as of December 31, 2024, our Giikin system had accumulated data regarding more than
611,000 SKUs including pricing and popularity. During the Track Record Period, our databases and
libraries of advertising materials had stored over 5.8 million pieces of advertising materials. We have
developed our proprietary product relationship matrix with product tags, platform user tags and
transaction information that precisely displays the relationship between characteristic profiles of users
from different geographical locations and relevant products. This matrix has provided us with a solid
foundation to further enhance our AI modeling capabilities.
Our data analytical capabilities are one of our core competitive strengths. We continue to invest in
R&D to maintain our advanced technology capabilities, such as AI, machine learning and big data
analytics. We insist on independent development of our technology infrastructure, including developing
our big data models and algorithms. Our data analytical capabilities are the basis of our social
e-commerce business model to discover target customers actively and precisely, and have enabled us to
maintain profitability. Through our data analytical capabilities, we focus on precisely recommending
one to two products which are best matches to selected consumers to achieve a higher ROI. Our AI
models are capable of analyzing a large amount of real-time transaction data, including the fulfillment
rate, product costs, and logistics costs, and precisely estimating the pricing of each product, allowing us
to discover products with high profitability. For each year of the Track Record Period, our ROI was
208.3%, 189.8% and 191.1%, respectively, which were higher than the industry average, according to
CIC.
We possess effective and sophisticated supply chain management capabilities for our cross-border
social e-commerce business to enhance consumers satisfaction and optimize cost control.
We manage our supply chain for our cross-border social e-commerce business through maintaining
a certain level of inventory for specific products and purchasing products from suppliers after we
receive orders from our consumers if the ordered products are not available in our warehouses. This
model allows us to maintain a lower inventory to sales ratio than other companies in the industry. For
each year of the Track Record Period, our inventory to sales ratio amounted to 3.7%, 3.2% and 4.0%,
respectively. This supply chain management model is supported by our automated procurement and
logistics management system. Our Giikin system integrates data insights from product suppliers and
logistics service providers to achieve automated management of each logistics process including
transportation, delivery and receipt. Through this process, we estimate the time needed for product
procurement and logistics delivery to allow us to minimize our cost and inventories while ensuring that
consumer experience is not affected. Through the AI models, we can estimate the demand for our
products, allowing us to accurately plan our procurement strategy. Additionally, to process a large
number of incoming orders from our consumers every day, we developed an automated order system
embedded in our Giikin system, through which we negotiate with suppliers online on pricing of
products and place orders in an automated manner with limited human intervention.
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We have established a comprehensive supplier management system, allowing us to manage our
supply chain network. Leveraging the data connection between us and our suppliers, we can achieve fast
delivery of a large number of orders within a short period of time. We (1) directly purchase products
from suppliers whom we have on-boarded to our supplier management system or (2) purchase products
from suppliers registered on 1688.com, an integrated wholesale marketplace operated by Alibaba Group
Holding Limited. As of December 31, 2024, we had onboarded over 1,000 suppliers to our
comprehensive supplier management system. Leveraging our scale and close cooperation with
suppliers, our suppliers are typically willing to deliver products to us quickly at a reasonable price. We
can also predict the time needed for products to be shipped from our suppliers to our leased warehouses.
For products that are not supplied by existing suppliers, as well as piecemeal orders, we continue to
cultivate relationships with high-quality suppliers through third-party procurement platforms, and
gradually onboard them on to our supplier management system. With our access to abundant supplier
resources and effective management, we have greater flexibility to discover popular products and to
provide overseas consumers with high-quality, competitively priced, versatile and esthetically pleasing
products produced in Mainland China.
We have established robust relationships with logistics service providers, allowing us to provide
consumers with flexible delivery options and efficient logistics services. As of the Latest Practicable
Date, we leased two warehouses in Dongguan, Guangdong Province and Jinjiang, Fujian Province, and
utilized third-party warehouses operated by logistics service providers as part of the services they
provided to us. Our Giikin system enables us to select logistics service providers with the lowest price
and fastest delivery within our pool of logistics service providers that satisfy shipping requirements
based on product characteristics and delivery regions. This allows us to achieve same-day dispatch for a
majority of products and ensures that products are delivered typically within seven days, providing a
smooth shopping experience to consumers from order placement to receipt of product.
Through API, our Giikin system is connected with the warehouse management systems of our
leased warehouses and our logistics service providers, realizing the automated management of the entire
logistics process including transportation, delivery and receipt. Our Giikin system can track the location
and status of products in real time. Our customer service team works closely with the logistics service
providers to understand the latest logistics status, allowing us to respond promptly to customer queries.
Through breakthroughs in marketing designs and R&D, we provide paper packaging products
that continuously maintain our long-term relationship with leading FMCG enterprise customers.
We are among a limited number of FMCG paper packaging companies in Mainland China that can
provide a one-stop service from marketing strategies, product design, process design and technology
planning, production, to transportation and logistics. Deeply engrained with creativity and leveraging
our in-depth understanding of enterprise customers and the latest ESG trends, we provide a full suite of
paper packaging products for enterprise customers to meet their comprehensive packaging needs for
various types of products.
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We focus on the creativity of packaging design, while also understanding functional requirements
as the basis for process design and technology planning. We are dedicated to actualizing any paper
packaging ideas for our FMCG enterprise customers, in the same way as “turning a script into a film”.
We insist on a customer-centric approach to provide esthetically pleasing, practical, environmentally
friendly and cost-effective paper packaging products. With more than 20 years of experience in the
packaging industry, we have become a leader in China’s FMCG paper consumer packaging industry
with significant competitive strengths. We ranked first among FMCG paper consumer packaging
companies in Mainland China in 2024, based on revenue, according to CIC. We ranked fifth in the “Top
100 Chinese Printing and Packaging Enterprises” published by Printing Manager Magazine in 2022. We
operate 10 large-scale printing and packaging production facilities across Mainland China to cater for
our enterprise customers’ business needs across the entire packaging value chain from packaging design
to transportation and logistics.
We have established stable cooperative relationships with enterprises that are leaders in various
different sub-categories in the FMCG industry, such as Yili and Luckin Coffee, and a number of
world-leading QSR companies with operations in Mainland China. At the same time, we continue to
develop relationships with new enterprise customers. During the Track Record Period, we became a
paper packaging product provider for global leading FMCG enterprises such as Woolworths, Australia’s
No. 1 chain supermarket, and McDonald’s, the world’s leading western-style fast food chain restaurant,
and became our enterprise customers’ important supplier.
We continue to refine our technology to improve packaging efficiency and service quality in a
number of areas:
Creative design. Our packaging ideas integrate various elements such as enterprise culture,
esthetics, raw materials and technical processes. We observe and study the market and accumulate
experience through extensive cooperation and active dialog with our enterprise customers. We
understand our enterprise customers’ needs, help them design and improve their packaging, and provide
proposals to address their problems. During the production and sales process, we continue to understand
any changes in their needs through feedback they provide, and continuously improve our paper
packaging products, enabling our enterprise customers’ packaging to stand out among their competitors.
R&D and Technology. Our technology innovation capabilities empower us to continuously
advance as a leader in the industry. We have mastered advanced printing technologies, and achieved
significant competitive advantages in pre-printing processing technologies including process design and
technology planning. As of March 31, 2025, we owned 362 patents and 17 software copyrights, in
relation to the design and manufacture of packaging.
Quality . Our products are widely used in the outer packaging of FMCG, which requires our
products to maintain high quality. We strictly control the selection of production materials, and for each
crucial production process, we have installed advanced testing equipment. We have established internal
enterprise technical standards and quality management systems providing us with significant control
over product quality through the entire production process, to ensure we meet our enterprise customers’
quality requirements. We have obtained various professional certifications, including ISO9000 quality
management system, ISO14001 environmental system, BRCGS ETRS social responsibility, and FSC
international organization certification standards.
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Environmental protection . We strive to be at the forefront of the industry in ESG and sustainable
development. In support of China’s plastic reduction policy, we were among the earliest enterprises in
Mainland China to proactively design environmentally friendly packaging, such as lightweight paper
packaging, and strategically enhanced our production capability of green packaging. We continue to
respond to the environmental protection and low-carbon needs of our enterprise customers, and
strengthen our R&D efforts in green packaging. We possess industry-leading environmentally friendly
technologies and processes such as biodegradable materials and inkjet.
Digitalization . We continue to enhance the level of digitalization across the entire packaging
production process. In design, through the use of design software, virtual reality technology and
augmented reality technology, we are able to design and finalize paper packaging products more quickly
and accurately. In addition, we analyze our enterprise customers’ historical design requirements and
feedback to optimize designs to make them more attractive and functional. In production, we use vision
technology to automatically detect and identify issues in our product to improve product quality and
reduce defects.
Our resilient organizational structure is led by visionary senior management team.
Our senior management team has extensive industry experience covering FMCG packaging,
cross-border e-commerce and Internet digital marketing, contributing to their in-depth understanding of
our business development and strategies. Ms. Zhuang Hao ( ୿ख), our founder, executive Director and
general manager, has over 25 years of experience first in the advertising and packaging industry and
then in the social e-commerce industry. Under her leadership, we expanded our revenue base from a
marketing design business to a one-stop paper packaging business, while at the same time substantially
increasing our revenue. Owing to her leadership and decision-making capacities, in 2017, we captured
the business opportunities in cross-border e-commerce and successfully established an additional
revenue growth channel. Mr. Wang Y apeng (؃the chairman of the Board of Directors and an
executive Director, has more than 20 years of experience in the Internet marketing and cross-border
commerce industry, and has consistently focused on providing overseas integrated marketing solutions
and technology services to export enterprises in Mainland China. Since joining us in 2017, he has led a
team with extensive experience in diverse fields such as cross-border e-commerce, precision marketing,
advertisement placement and technology R&D, successfully growing our cross-border social
e-commerce business in Asia, as well as Europe and North America, and guiding its cross-regional
expansion. For our paper packaging business, our core team has been engaged in the printing and
packaging industry for a long time and possesses extensive industry technical expertise and rich
management experience. Mr. Zhang Heping ( ੵձ̻ ), the vice chairman and deputy general manager,
has nearly 30 years of experience in the printing and packaging industry. Our management team has
established long-term and close cooperation with leading FMCG enterprises, allowing them to
understand enterprise customer needs, have their pulse on the latest industry trends, and make bold
decisions to develop and grow our business.
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We believe that an efficient organizational structure is the key to our healthy development. Our
cross-border social e-commerce business runs on a distinctive flat organizational structure combining
small front-end teams supported by our centralized control functions. We have established several
front-end teams that we call “families”, each of which are assigned a business process including product
discovery, advertisement placement and advertising material generation. These “families” are assessed
based on a standard that prioritizes profitability, while taking into consideration strategic contributions.
This standard, combined with a “horse-racing” mechanism, fosters virtuous competition and synergies
among “families”, enhancing our market expansion capabilities and industry competitiveness. Our
middle and senior management teams act as the guardians of these “families” to support, coordinate and
provide them with middle-to-back-end business process including supply chain, IT system and customer
service to empower them with tools to maximize our profits.
Our vibrant employees are engrained with a diligent attitude, adaptability to change, and
innovative mindset, providing a solid bedrock for our growth. We also continuously cultivate an
atmosphere of “encouraging innovation and allowing trial and error”, which enables our employees to
think big and make breakthroughs. We also attach significant importance to incentivizing our
employees. We purchased our A Shares from the secondary market in 2024, amounting to RMB86.0
million, to replenish our equity incentive scheme for our employees. As of December 31, 2024, our
2022 Employee Share Ownership Plan and 2023 Restricted Share Incentive Plan included a total of 228
employees of our Group.
OUR STRATEGIES
Leveraging our competitive strengths and with access to more international resources upon
Listing, we intend to pursue the following strategies:
Deepen penetration in existing markets and expand our global footprint
Since the launch of our cross-border social e-commerce business, we have been strategically
focusing on Asia and have achieved operational excellence in regions including Japan, South Korea,
Thailand and Saudi Arabia. By capitalizing on our access to abundant, diverse, competitively priced and
high quality consumer products in Mainland China and Mainland China’s advantageous geographical
location in Asia, we plan to further establish our footprint in other regions in Asia, such as Indonesia,
the most populous country in Southeast Asia in 2022, and Vietnam. According to CIC, in 2024, in terms
of revenue, the market size of China’s B2C outbound social media e-commerce in the Asian market
amounted to US$29.1 billion. It is anticipated that the market size will increase to US$69.5 billion in
2029, with a CAGR of 19.0% from 2024. With the ongoing proliferation of the mobile Internet in the
Asian region, China’s B2C outbound social media e-commerce in the Asian market is poised to exhibit
significant growth potential in the future. It is anticipated that the social media penetration rate in Asia,
excluding Mainland China, will increase to 55.0% by 2029, opening up even more opportunities for
social media e-commerce, providing us with sufficient opportunities for growth in the Asian market.
Leveraging our knowledge of Asian consumers and industry knowhow we accumulated through our past
success, we believe we are well positioned to achieve such expansion.
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In addition, leveraging our multi-lingual capabilities that have had proven success in Asia, we
intend to replicate our success in Europe to achieve greater economies of scale. We intend to steadily
expand into Europe, while continuing to expand to geographic regions with high growth potential for
cross-border social e-commerce, such as Latin America. According to CIC, as measured by revenue, the
size of the B2C outbound social media e-commerce market in (i) Europe is expected to reach US$26.6
billion for 2029 from US$11.9 billion for 2024, with a CAGR of 17.5%, and (ii) Latin America is
expected to reach US$11.8 billion for 2029 from US$4.7 billion for 2024, with a CAGR of 20.0%.
Applying our experience and our proven capabilities in data analytics, we intend to swiftly gain an
in-depth understanding of consumer characteristics in these regions, create localized advertisements and
landing pages through leveraging our localization capabilities, and precisely place advertisements on
social media platforms that are popular locally.
To expand our footprint, we intend to recruit more sales and marketing personnel in Mainland
China to facilitate our expansion in Europe and Latin America as well as regions in Asia that we have
not established our footprint. We intend to establish footprint in these new markets rapidly, allowing us
to quickly gain market share.
We intend to allocate 40% of the net proceeds from the Global Offering to overseas market
expansion. See “Future Plans and Use of Proceeds.”
Continue to invest in R&D to continuously enhance the application of AI
We seek to enhance our business efficiency and data analytical capabilities through continued
investment in AI algorithms and our proprietary Giikin system. We employ AI algorithms to discover
goods, generate advertisement content, place advertisements, and provide purchase and after-sales
services to our consumers. We intend to optimize our technology infrastructure through deepening our
cooperation with leading AI model developers and similar technology companies to develop and apply
advanced machine learning and deep learning technologies to our business and continuously update and
enrich our AI model libraries. With the data we accumulated from operating our cross-border social
e-commerce business, these AI algorithms can be further trained to enhance their efficacy, which would
in turn help us to maintain our leadership in the market.
Furthermore, we plan to enhance our data analytical capabilities through equipping our Giikin
system with advanced data analytics tools that are empowered with AI, such as statistical analysis,
machine learning and data mining, which will allow us to draw deeper and more accurate insights, and
enhance the accuracy of our algorithms and improve the efficacy of our advertisement placement
efforts. We will also continue to optimize our existing predictive models to enhance our capability to
discover popular and profitable products by more accurately gauging popularity and sales potential. In
addition, we continue to enhance our AI algorithms used to analyze the behavior and preferences of
consumers in different regions and on different social media platforms, allowing us to generate more
personalized advertisements and landing page designs and provide a more seamless user experience. We
also plan to use advanced digital channel management and content distribution technologies to achieve
synergies and improvements in our product discovery capabilities and landing page designs across
different social media platforms. Specifically, we plan to invest in various hardware infrastructure to
enhance the functionality and security of our Giikin platform and recruit research and development
professionals to support our R&D efforts.
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In addition, we plan to further enhance our operational efficiency and lower our logistics costs
through deep integration of AI into our business processes. For example, we will further enhance our
order management, warehouse management and customer service capabilities in our cross-border social
e-commerce business. Through such functional upgrades, we seek to enhance our ability to identify and
resolve consumer and order issues in a timely manner, ensure smooth delivery of orders globally and
improve customer satisfaction, which would translate into higher order fulfillment rates. For our paper
packaging business, we intend to apply AI technologies to develop packaging design applications to
allow us to create new packaging designs with higher efficiency and to generate diversified and
customized packaging designs to further increase our competitiveness.
We intend to allocate 30% of the net proceeds from the Global Offering to enhance our AI and data
technologies. See “Future Plans and Use of Proceeds.”
Develop our own brands to build brand value and capitalize on our proven data analytical
capability
We plan to build a multi-brand product matrix to enhance our ability to address consumer needs,
and to continue to increase our market share in the global cross-border social e-commerce market and
our revenue generating capabilities. As of the Latest Practicable Date, we had six brands including
SENADA BIKES, V eimia, Konciwa and PETTENA. Under these brands, we sold products ranging from
electric bikes, lingerie, UV umbrellas and pet accessories on our designated brand websites as well as
e-commerce platforms. We intend to continue to strengthen brand awareness and consumer stickiness of
our existing brands and capitalize on our data analytics and precision marketing capabilities which
would allow us to apply experience and insights accumulated from our cross-border social e-commerce
business. At the same time, we plan to cooperate with e-commerce platforms to enhance the popularity
of our brands in their respective product categories. In addition, we intend to enhance our marketing
efforts on various social media platforms and cooperate with celebrities and KOLs to promote our own
brands.
We intend to cultivate our own brands portfolio, through a combination of internal incubation and
external acquisition. Through our cross-border social e-commerce business, we have accumulated deep
understanding of consumer needs and preferences in different geographic regions. As our data analytics
capabilities continue to improve and be refined, we are able to develop products and formulate
differentiated branding strategies that are increasingly tailored to the demands and preferences of
consumers in certain geographic regions, while creating a brand that has the advantages of products that
are manufactured and designed in Mainland China. Additionally, according to regional and market
characteristics, we intend to develop brands associated with high-quality products that are specifically
customized to different consumer cohorts, as well as brands that differentiate themselves, which can
satisfy the needs and preferences of a broad range of consumers. We have established an internal brand
incubation process and entrepreneurship teams to encourage employees to propose innovative projects.
We strictly screen participants in the teams and conduct regular evaluation to assess the quality and
feasibility of the proposed projects and continue to refine them. In addition, we intend to establish a
marketing center and recruit a team of marketing professionals to support the promotion and marketing
of our own brands developed by our entrepreneurship teams. We plan to continuously improve our
internal incubation process to provide opportunities for our employees to innovate and for our company
to thrive.
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We also seek to acquire any existing brands that have achieved leading position in certain
categories on leading e-commerce platforms, distinctive brand recognition, an existing well-established
supply chain and a high customer repurchasing rate. Through cooperating on resources, operations and
R&D, we seek to realize any synergies and complementary benefits from acquired brands. Through
consolidating supply chain resources, technologies and talents, we believe we can enhance our
competitiveness globally, as well as providing higher-quality products to our consumers.
We intend to allocate 15% of the net proceeds from the Global Offering to expansion of our brand
portfolio. See “Future Plans and Use of Proceeds.”
Continue to build GiiMall, our proprietary SaaS platform, to facilitate global expansion of local
SMEs
Benefiting from our industry experience, we have developed GiiMall, a one-stop service SaaS
platform that empowers Mainland China-based e-commerce SMEs to sell their products abroad. We
specifically target SMEs that manufacture high-quality products but lack the highly effective
operational capabilities of cross-border e-commerce companies to sell products overseas. We replicate
our own experience to provide suppliers with a full-suite of services along the entire value chain,
covering supply chain, landing page generation, advertisement placement, cross-border logistics and
cross-border payment, and automated translation services. Through GiiMall, we help suppliers tackle
challenges faced in the cross-border social e-commerce business, such as language barriers, different
currency systems and payment methods, and difficulties in localizing marketing, as well as the
complexity and uncertainty associated with cross-border logistics in certain areas.
We intend to further enhance the technology capabilities and functions of our SaaS platform
through equipping GiiMall with advanced technologies and more modules to address the changing
needs of suppliers while ensuring the stability and security of the platform. Specifically, we plan to
build more applications, such as smart advertisements, and enhance our existing applications, such as
AI translation, automated customer service and automated image and video processing, on GiiMall.
Through continuous innovation and iterative development of GiiMall, we intend to create a robust
SaaS-based ecosystem with rich functions allowing the sharing of permissioned data and resources to
facilitate synergies among different participants.
We intend to promote our SaaS services to suppliers with local specialized products that have
access to a mature supply chain, and suppliers established in local cross-border e-commerce industrial
parks who have sufficient cross-border business experience. Building on this, we seek to further expand
our SaaS services to all SMEs which seek to sell their products to consumers overseas. Through this
strategy, we seek to connect these three kinds of companies on our SaaS platform to form a mature
ecosystem. In addition, we plan to promote our GiiMall SaaS business through various sales and
marketing channels to reach more suppliers, including on-the-ground promotion team to reach suppliers
in specific areas, various online marketing methods and participation in industry exhibitions. We are
also considering strategic cooperation with other established players in the industry to share resources
and, leveraging their established position in the market as well as their platforms, promote our SaaS
services and brand through their platforms, so as to propel our SaaS services to become the top choice
for Mainland China-based SMEs to facilitate their sales overseas.
We intend to allocate 5% of the net proceeds from the Global Offering to enhance GiiMall. See
“Future Plans and Use of Proceeds.”
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Optimize our supply chain management for our cross-border social e-commerce business
We will further optimize our supply chain management by strengthening our cooperation with
cost-efficient suppliers, who meet our quality standards and delivery requirements, to support the
expansion of our wide-array product portfolio. We intend to enter into strategic or exclusive
cooperations with qualified suppliers to onboard them on to our proprietary product discovery and
supply chain management system. We will continue to strengthen our continuous digitalization efforts
and upgrades of our supply chain management capabilities, enhance our supplier management system
and improve logistical processes with our key suppliers to better manage our resources. We believe this
would reduce our procurement costs, and increase our logistical and operational efficiency, which
would enhance our revenue generating capabilities as well as market competitiveness.
At the same time, in order to serve consumers from different geographic regions across the globe,
we intend to build differentiated logistics management systems based on distinct features in different
markets and geographic regions to optimize our warehousing and logistics management. Through
achieving a more efficient and cost-effective distribution process, we believe we can increase consumer
satisfaction and loyalty as well as enhancing our operational efficiency. We also plan to optimize and
enrich our payment channels to reduce transaction fees and increase order completion rate, ultimately
translating into more efficient cash management.
Continue to invest in green paper packaging products
As a pioneer in the field of green paper packaging products in Mainland China, we provide green
packaging to renowned FMCG companies, such as Woolworths, Y um Group, McDonald’s. As sellers of
high-frequency consumer goods used in everyday life, companies in the FMCG industry need to build
an environmentally-friendly and sustainable operations and brand image among their consumers. In line
with regulatory policies in many countries around the world and the global trend of adopting green
packaging, we will continue to invest in green packaging and develop innovative and sustainable green
packaging for FMCG products for our enterprise customers to meet their ESG requirements. We expect
to continue to utilize our cash from operations for investment in green paper packaging products.
In addition, we intend to continuously expand our green paper packaging products to further
increase our market share. In particular, we intend to enhance the application of AI technologies in the
design and quality inspection of our packaging products. We also plan to cooperate with research
institutions to introduce advanced manufacturing technologies and materials, which would reduce
pollution in the production process and enhance the sustainability of our packaging, as well as to
develop innovative packaging products and services tailored to our enterprise customers’ specific
market needs.
OUR BUSINESS MODEL
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. Innovation is our core value. Since inception, we have been a business focused on
advertising and promoting products by continuously adapting to consumption trends and consumer
needs. We have utilized our marketing capabilities and insights to innovate and diversify our business
model which is comprised of two primary businesses: (i) cross-border social e-commerce business, and
(ii) paper packaging business. We also engage in other businesses, including providing precision
marketing services.
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Founded more than 20 years ago, we began as a paper packaging business, providing innovative
product design and manufacturing services to a wide range of businesses in Mainland China, including
food and beverage, catering, and daily necessities. Our packaging seeks to not only have a functional
purpose to carry and protect products, but also attract consumers to purchase the products by displaying
the products in their best light with sophisticated designs. In 2024, we ranked first among FMCG paper
consumer packaging companies in Mainland China, based on revenue, according to CIC. We provide
one-stop paper packaging products and services addressing our enterprise customers’ paper packaging
needs, from marketing strategies, product design, process design, technology planning, to transportation
and logistics. Through our paper packaging business, we have been continuously accumulating
experience through collaborating with a variety of industries that are flourishing in Mainland China,
adapting to and preempting changes in consumer needs and preferences and managing extensive supply
chains. In addition, following the long-term trend of Chinese national policies promoting a green and
low-carbon economy, we actively develop and apply environmentally-friendly materials and techniques
to manufacture our products, including color packaging cartons/boxes, eco-friendly paper bags and food
packaging.
Leveraging the experience from designing packaging to promote and attract consumers, we
gathered insights on how to further promote products and observed opportunities for us to incorporate
e-commerce into our business model by extending to product discovery, advertisement placement, as
well as procurement and delivery to consumers. Building on these insights and observing a fast-growing
trend in social media and mobile Internet usage in Southeast Asia, in 2017, we started our cross-border
social e-commerce business to take advantage of the growth potential in the Southeast Asia e-commerce
market. Adopting a social e-commerce business model to discover target customers actively and
precisely, leveraging our data analytical capabilities, we carefully select our products and had more than
611,000 SKUs during the Track Record Period, which we precisely recommend to consumers through
social media platforms, such as Meta (including Facebook and Instagram), TikTok, Google (including
Y ouTube), Line, Snapchat and X (formerly Twitter), by assigning tags to our products identifying their
precise target consumer audience. Based on our in-depth understanding of consumer behavior and our
superior data analytical capabilities deployed through algorithms and models, we match the products
with consumer needs and accurately place advertisements to draw consumers to landing pages that
facilitate the purchase of third-party products we sell. We also sell products ranging from electric bikes,
lingerie, UV umbrellas and pet accessories under our own brands including SENADA BIKES, V eimia,
Konciwa and PETTENA on our designated brand websites and e-commerce platforms. Our cross-border
social e-commerce business has a broad geographic footprint. During the Track Record Period, we sold
our products to consumers in Asia, as well as Europe and North America.
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The following table sets forth a breakdown of revenue by business segment for the periods
indicated:
For the year ended December 31,
2022 2023 2024
Revenue % Revenue % Revenue %
RMB’000 RMB’000 RMB’000
Cross-border social
e-commerce 3,106,601 57.8 4,256,637 63.6 3,365,903 60.9
Paper packaging 1,982,591 36.9 2,096,606 31.3 2,099,461 38.0
Others
(1) 286,692 5.3 341,438 5.1 63,895 1.1
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Note:
(1) Others mainly comprise our marketing and advertising business and incidental trading business. For further details,
see “– Our Other Businesses” in this section.
Revenue breakdown by geographical market
The following table sets forth the breakdown of our total revenue by geographical market for the
periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Revenue
Northeast Asia (1) 1,794,364 33.4 2,541,774 38.0 1,738,742 31.4
Mainland China (2) 2,190,291 40.7 2,309,038 34.5 2,037,028 36.8
Southeast Asia (3) 677,902 12.6 846,808 12.6 661,433 12.0
Middle East (4) 409,467 7.6 385,919 5.8 341,777 6.2
Europe (5) and
North America (6) :
− U.S. 171,880 3.2 121,008 1.8 126,935 2.3
− Europe and
other countries in
North America 83,819 1.6 388,533 5.8 520,899 9.4
Others
(7) 48,161 0.9 101,601 1.5 102,445 1.9
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
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Notes:
(1) Northeast Asia primarily includes Japan, South Korea, Hong Kong SAR and Taiwan.
(2) Includes our paper packaging business and other businesses in Mainland China only. For details, see “Business –
Our Paper Packaging Business” and “Business – Our Other Businesses”.
(3) Southeast Asia primarily includes Thailand, Malaysia, Singapore and the Philippines.
(4) Middle East primarily includes Saudi Arabia and United Arab Emirates.
(5) Europe primarily includes Italy, Germany and Poland.
(6) North America primarily includes Canada and the United States.
(7) Includes revenues primarily generated from our paper packaging business in other countries or regions, such as
Australia and New Zealand.
The following table sets forth the breakdown of our cost of sales by business segment for the
periods indicated, both in actual terms and as a percentage of our total cost of sales:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Cost of sales
Cross-border social
e-commerce 1,269,838 39.7 1,571,742 43.8 1,329,134 42.8
Paper packaging 1,682,064 52.6 1,703,450 47.4 1,724,280 55.4
Others 245,129 7.7 315,186 8.8 56,530 1.8
Total 3,197,031 100.0 3,590,378 100.0 3,109,944 100.0
The following table sets forth the breakdown of our gross profit and gross profit margin by
business segment for the periods indicated:
For the year ended December 31,
2022 2023 2024
Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin
RMB’000 % RMB’000 % RMB’000 %
Cross-border social
e-commerce 1,836,763 59.1 2,684,895 63.1 2,036,769 60.5
Paper packaging 300,527 15.2 393,156 18.8 375,181 17.9
Other 41,563 14.5 26,252 7.7 7,365 11.5
Total 2,178,853 40.5 3,104,303 46.4 2,419,315 43.8
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OUR CROSS-BORDER SOCIAL E-COMMERCE BUSINESS
Since the launch of our cross-border social e-commerce business in 2017, we have been selling a
portfolio of products carefully selected for consumers in a number of countries or regions in Asia, as
well as Europe and North America. We sold products to approximately 17.0 million consumers during
the Track Record Period. According to CIC, we ranked second among China’s B2C outbound social
media e-commerce players based on revenue generated in Asia in 2024 through social media
e-commerce business, with a market share of 1.3%. For each year of the Track Record Period, revenue
from our cross-border social e-commerce business amounted to RMB3,106.6 million, RMB4,256.6
million and RMB3,365.9 million, representing 57.8%, 63.6% and 60.9% of our total revenue,
respectively.
Contrary to the passive approach of traditional e-commerce model where customers have to
discover goods, we adopt an active social e-commerce business model by actively and precisely
discovering our target customers, where we precisely recommend products that we carefully select to
social media users through social media platforms by assigning tags to our products to match them with
their precise target consumer audience, converting users of the social media platforms into our
consumers while capitalizing on their adhesiveness to these social media platforms which have formed
an integral part of their daily lives. Leveraging our data analytical capabilities, we seek to attract
consumers to our landing pages to purchase our products.
We have extensive access to a vast pool of products which we select using our data analytical
capabilities. During the Track Record Period, we had more than 611,000 SKUs. Our products are
primarily procured (i) directly from suppliers whom we have on-boarded to our supplier management
system, or (ii) from suppliers registered on 1688.com, an integrated wholesale marketplace operated by
Alibaba Group Holdings Limited. We provide a wide-array of products, including household products,
apparel products, electronic products, footwear products, luggage and bag products, cosmetic and
personal care products, healthcare products, maternity and baby products, and watches and accessories.
In 2021, with our accumulation of experience and undertaking of consumer preferences and needs from
our social e-commerce business model that discovers target customers actively and precisely, we
observed the increasing value overseas consumers placed in brands for products addressing a specific
need, and started developing our own brands. As of the Latest Practicable Date, we owned six brands
including SENADA BIKES, V eimia, Konciwa and PETTENA. Under these brands, we sold products
such as electric bikes, lingerie, UV umbrellas and pet accessories on our designated brand websites and
e-commerce platforms. Benefiting from our industry experience, we have also developed a one-stop
service SaaS platform called GiiMall targeting Mainland China-based cross-border e-commerce
suppliers.
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The following table sets forth a breakdown of our revenue generated from our cross-border social
e-commerce business by categories of products for the periods indicated.
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Household products 834,008 26.8% 1,111,352 26.1% 932,038 27.7%
Electronic products 381,699 12.3% 766,283 18.0% 790,468 23.5%
Apparel products 549,151 17.7% 1,033,065 24.3% 615,316 18.3%
Cosmetic and personal care
products 356,667 11.5% 334,930 7.9% 328,192 9.8%
Healthcare products 174,979 5.6% 302,523 7.1% 336,999 10.0%
Footwear products 491,022 15.8% 423,233 9.9% 156,734 4.7%
Luggage and bag products 181,931 5.9% 126,251 3.0% 71,699 2.1%
Watches and accessories 118,708 3.8% 131,623 3.1% 75,627 2.2%
Maternity and baby products 18,436 0.6% 27,377 0.6% 58,830 1.7%
Total 3,106,601 100.0% 4,256,637 100.0% 3,365,903 100.0%
Key Operating Metrics
The following table sets forth the key operating metrics for our cross-border social e-commerce
business for the periods indicated during the Track Record Period.
For the year ended December 31,
2022 2023 2024
Countries/regions sold 36 41 47
Number of consumers (1) 6,537,096 7,331,841 6,545,100 (8)
Number of SKUs (2) 265,696 304,494 256,645 (8)
Inventory to sales ratio (3) (%) 3.7 3.2 4.0 (9)
Number of total fulfilled orders (4) 11,654,192 16,404,431 13,834,281 (8)
Order fulfillment rate (5) (%)
(ᖦϗଟ ) 86.3 88.4 84.9 (10)
Average selling price per order (6) (RMB) 266.6 259.5 243.3
ROI(7) (%) 208.3 189.8 191.1
Notes:
(1) Number of consumers represents the number of consumers who placed orders and accepted our products during a
given year, excluding consumers on e-commerce platforms.
(2) SKUs represent stock keeping units of products which have been ordered during a given year.
(3) Inventory to sales ratio is calculated by using the average balance of inventories of our cross-border social
e-commerce business at the beginning and the end of the year divided by revenue of our cross-border social
e-commerce business for such year.
(4) Number of fulfilled orders represents the total number of fulfilled orders during a given year, which were accepted
by consumers and not returned.
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(5) Order fulfillment rate is calculated by dividing the number of fulfilled orders by the number of new orders during a
given year. For the avoidance of doubt, fulfilled orders do not include orders that are canceled or returned after
being placed.
(6) Average selling price per order is calculated by dividing revenue of our cross-border social e-commerce business by
the total number of fulfilled orders during a given year.
(7) ROI represents the return on investment for our advertisement placement for our cross-border social e-commerce
business. It is calculated by dividing revenue for our cross-border social e-commerce business by advertising cost
during a given year. According to CIC, ROI is a common performance metric embraced across the digital advertising
industry and social media e-commerce industry, as the sales of both markets stem directly from the advertising
efforts of market players. The calculation of ROI of social media e-commerce business reflects the efficacy of the
social media advertisements as demonstrated by the conversion rate into sales and thus a higher ROI suggests that a
company garners greater revenue with equivalent advertising expenses.
(8) In 2024, the number of our customers, SKU and total fulfilled orders of our cross-border social e-commerce
business decreased compared with that in 2023, as we reduced advertising expenses in certain key markets in
response to the unpredictability of exchange rate fluctuations. For further details, see “Financial Information –
Review of Historical Results of Operations – Y ear Ended December 31, 2023 Compared to Y ear Ended December 31,
2024.”
(9) In 2024, the inventory to sales ratio of our cross-border social e-commerce business increased compared with that in
2023, which primarily resulted from the decrease in revenue of our cross-border social e-commerce business in
2024. For further details, see “Financial Information – Review of Historical Results of Operations – Y ear Ended
December 31, 2023 Compared to Y ear Ended December 31, 2024.”
(10) In 2024, the order fulfillment rate of our cross-border social e-commerce business decreased compared with that in
2023, as our sales expansion activities in certain under-penetrated market were at early stage in early 2024. For
further details, see “Financial Information – Review of Historical Results of Operations – Y ear Ended December 31,
2023 Compared to Y ear Ended December 31, 2024.”
Our Geographical Coverage
We sold products to consumers globally in over 40 countries and regions in Asia, as well as Europe
and North America during the Track Record Period. For each year of the Track Record Period, revenue
from our cross-border social e-commerce business attributed to Asia (which includes Northeast Asia,
Southeast Asia and Middle East) was 92.8%, 88.3% and 80.9%, respectively.
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The table below sets forth a breakdown of the revenue of our cross-border social e-commerce
business by geographical market during the Track Record Period.
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Revenue
Northeast Asia (1) 1,794,364 57.8 2,527,377 59.4 1,720,230 51.1
Southeast Asia (2) 677,902 21.8 846,452 19.9 661,202 19.6
Middle East (3) 409,467 13.2 385,919 9.1 340,289 10.1
Europe (4) and
North America (5) :
− U.S. 142,100 4.6 107,172 2.5 120,928 3.6
− Europe and
other countries in
North America 81,399 2.6 386,364 9.1 518,015 15.4
Others 1,369 0.0 3,353 0.1 5,239 0.2
Total 3,106,601 100.0 4,256,637 100.0 3,365,903 100.0
Notes:
(1) Northeast Asia primarily includes Japan, South Korea, Hong Kong SAR and Taiwan.
(2) Southeast Asia primarily includes Thailand, Malaysia, Singapore and the Philippines.
(3) Middle East primarily includes Saudi Arabia and United Arab Emirates.
(4) Europe primarily includes Italy, Germany and Poland.
(5) North America primarily includes Canada and the United States.
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Our Social E-commerce Business Model
Contrary to the passive approach of traditional e-commerce model where customers have to
discover goods on individual e-commerce, websites or apps, we adopt an active social e-commerce
business model by actively and precisely discovering our target customers. We believe this active model
is more effective than the traditional model because we actively collect and analyze consumer behavior
to tailor suggestions to consumer demand and preferences, allowing us to connect products with people
more efficiently and proactively. Our social e-commerce business model essentially starts the sales
process with no fixed set of products to be sold and no fixed set of customers to sell our products to –
this model requires active collection and analyses of consumer behavior to find target customers with
suggestions of products tailored to consumer demand and preferences that are best matches for these
target customers. In contrast, companies which adopt a passive approach to sell products over individual
websites or apps generally have limited access to consumer data, which would restrict them from
precisely reaching their target consumer audience. According to CIC, our Company stands out as the
only one among the top ten players in China’s B2C outbound social media e-commerce companies,
generating more than 30% of its revenue through this social e-commerce business model in the Asia
market to actively and precisely discover target customers. We are one of the few listed companies in
Mainland China that adopt this social e-commerce business model to actively and precisely discover
target customers, according to CIC.
Leveraging our data analytics and technology capabilities, this social e-commerce business model
that discovers target customers actively and precisely enables us to excel in both facets: for discovering
goods stage, we continuously identify a vast array of hot-selling SKUs, and for discovering people
stage, by matching product tags generated by our Giikin system with consumer profiles and tags
maintained by social media platforms, we consistently provide precise recommendations to consumers.
Moreover, the data generated and collected during such process will in turn optimize our advertisement
placements. In 2024, we achieved a ROI of 191.1%, surpassing the industry averages of 180.0%
according to CIC. For each year of the Track Record Period, our order fulfillment rate ranged from
84.9% to 88.4%. In addition, leveraging such model, we can maintain low inventory levels through
proactively discovering interested customers and predicting the popularity of the products we launch.
Our models can estimate if we should maintain a certain level of inventory for specific products on a
“rolling basis” so that orders can be satisfied more efficiently and on a timelier basis. For each year of
the Track Record Period, our inventory to sales ratio amounted to 3.7%, 3.2% and 4.0%, respectively,
which is lower than industry average.
The following diagram sets forth a graphical representation of our social e-commerce business
model that discovers target customers actively and precisely:
01 02 03 PeopleDiscoveringGoods
 Utilizing our social e-commerce
business model to understand
consumer demand and
preferences
 Select products from the large and
complete supply chain system in
Mainland China that provides
goods with affordability, variety,
quality etc. while maintaining low
inventory levels
 Social media as our marketing channel
 Meta (including Facebook and
Instagram), TikTok, Google
(including YouTube), Line,
Snapchat, X (formerly Twitter)
etc.
 Technology as our foundation
 Recommendation based on
big data precision algorithms
 Deep machine learning,
achieving “thousand people,
thousand advertisements”
 Mobile Internet + social media
 Precise match: product tags
generated by us matching
consumer profiles and tags
maintained by social media
platforms
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We deploy big data analytics and algorithms through our proprietary Giikin system, which we
leverage in all three dimensions of “goods”, “discovering” and “people”, to help us analyze data,
discover products to sell, generate advertisement content, place advertisements, and sell products.
In the process of “goods” discovery, leveraging a combination of historical consumer behavior and
market trend data, a product discovery tool embedded in our Giikin system can suggest what goods to
sell and what geographic locations to sell them at based on consumer needs and preferences. This tool
visualizes expected popularity and profitability of product candidates by ranking them in a certain order
based on different characteristics, which enables our product discovery team to efficiently make
decisions. We continuously test the waters to refine and discover the best products that can achieve a
high gross profit margin. When discovering products, our Giikin system estimates the gross profit
margin of the product candidates. Our Giikin system empowers us to automatically generate product
descriptions, titles, graphics, images and promotional videos, advertising copies and translations. It can
automatically generate content that is tailored for the target consumer audience. By selecting popular
goods, generating attractive advertisement content and actively managing our procurement process from
suppliers, we have achieved lower inventory to sales ratios amounted to 3.7%, 3.2% and 4.0% for each
year of the Track Record Period, respectively, which were below the industry average, according to CIC.
We leverage the rich engineer resources in Mainland China to engage talents and are actively involved
in the innovative atmosphere in Mainland China that is conducive to advancements in the latest business
models and technology catering to both Mainland China and overseas markets, facilitating our ability to
apply big data analytics and AI technologies to discover relevant goods. In addition, the large and
complete supply chain system in Mainland China provides us with access to a variety of quality
products, allowing us to easily source products catering to diverse consumer needs.
In the process of “discovering”, our Giikin system empowers products that we have selected to
identify their target consumer audience by assigning tags. Through analyzing consumer behavior based
on data such as browsing length, click rate and other interactions with our landing pages, as well as
consumption trends based on information on the Internet, our Giikin system can create and assign tags
to our select products indicating the characteristics of the consumers who need and demand such
products in a targeted manner.
Under the traditional model, product sellers place products on websites and apps, and have to
passively rely on consumers to find their products, which is more time-consuming and less efficient.
Customers also have to spend a lot of time and effort to filter through large amounts of information and
products on platforms, websites and apps to search for products they want. If customers cannot find
products they want, they will not make purchases. At the same time, they have to rely on the operator of
the websites and apps to promote their products. On the other hand, using our social e-commerce
business model, we can actively find our target consumers by creating and assigning tags to products
that social media platforms can associate with target consumer audience. We have a deep understanding
of our consumers’ needs and assign precise tags to our products allowing us to recommend one to two
products which are best matches for them every time. This model increases efficiency for both us and
the consumer. It reduces the time we need to connect with potential consumers, as well as reducing the
time needed for consumers to find the products they want, thereby encouraging consumers to make
purchases. Our consumers do not need to scroll through a large number of products to find the products
they want and can make a decision as to whether they wish to purchase the products within a relatively
short period of time. Furthermore, we are able to spur pent-up demand of specific products from
consumers. Additionally, based on consumers feedback, we can also flexibly adjust our product
portfolio and advertising strategy by abandoning or adding products, ensuring that our advertisement
placement and sales efforts are always optimally efficient and maximizing our profitability. Given the
preference and strong demand for the products we discover, our target consumer audience demonstrates
a relatively lower level of price sensitivity evidenced by a higher gross profit margin.
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In the process of reaching “people”, we work with our digital marketing service providers to place
advertisements on social media platforms, such as Meta (including Facebook and Instagram), TikTok,
Google (including Y ouTube), Line, Snapchat and X (formerly Twitter). The product tags created by the
big data analytics and recommendation algorithms in the “discovering” process act as a bridge to
connect our products with users on the social media platforms. Using our proprietary algorithms, we
assign the same or similar tags as the social media platforms use to identify their users, to specific
products. These tags can indicate to the social media platforms the target consumer audience of such
products or intended advertising strategy. With these tags, we can precisely place advertisements to
recommend our products to their target consumer audience on social media platforms. Through this
process, highly targeted personalized recommendations can be displayed to potential consumers,
achieving a “thousand people, thousand advertisements” (ࠦmodel.
Using the tags associated with the products, our Giikin system predicts the efficacy of our
advertisements and also estimate their profitability, taking into account transportation cost, advertising
cost and estimated acceptance rate. Under this model, we seek to actively understand and explore
consumer needs and demand, including stimulating interest for products that consumers themselves may
not have been aware of.
Once a consumer makes a purchase, we capture information about the consumer through his
purchasing behavior which allows us to further refine our product recommendation capabilities. With
the data, a dedicated team continuously trains our models to ensure our system adapts to the latest
changes in consumer profiles and needs to increase the likelihood consumers will accept and purchase
the products we recommend, which we view as our data insights. For example, based on the
characteristics of the consumer, we may recommend the same product to other potential consumers who
may have similar characteristics as the consumer. This allows us to continuously train the algorithms
and models to improve their accuracy and efficacy in targeting the right “people” for our products,
creating a virtuous cycle connecting goods with people.
Our Business Process
Our cross-border social e-commerce business process comprises product discovery, landing page
generation, advertisement placement, supply chain management, cross-border logistics and cross-border
payment. The entire business process can be managed through our proprietary Giikin system, a unified
business operating system we developed internally that allows us to comprehensively track the
development of a product across the entire business process. For further details, see “– Our
Cross-border Social E-commerce Business – Our Technology Capabilities – Our Giikin System” in this
section.
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The following diagram depicts the business process of our cross-border social e-commerce
business:
Product Discovery(1) Product procurement(5) Product delivered to
warehouses in Mainland China(6)
Landing pages
generation(2)
Order
review(5)
Sorting and
shipping(7) Overseas delivery(10)
Advertisement
placement(3) Order generation(4) Overseas third-party
warehouses(9)Overseas shipping(8)
If product available
in warehouses
If product not
available in
warehouses
Typically, it takes less than seven days from placing orders to receiving products.
(1) Leveraging data analytics tools applied to historical and current market trend data insights collected from internal
data and permissioned external data and empowered by our proprietary Giikin system, our product discovery team
selects products that match consumer preferences and needs. For more details, see “– Product Discovery.”
(2) After discovering the products that we wish to recommend to consumers, our Giikin system generates landing pages
where our target consumers can purchase our products, leveraging our technological capabilities to generate
appealing content. For more details, see “– Landing Page Generation.”
(3) We deploy personalized recommendation algorithms to precisely recommend products to their target consumer
audience through placing advertisements on social media platforms and captivating users to click on the
advertisements which bring them to our landing pages and purchase our products. When a new product is on-board
in our system, we will place advertisements based on the basic characteristics of such product and default target
consumer tags on social media platforms. With advertisements reaching more consumers, we gradually accumulate
insights for precisely discovering target customers and are consistently fine-tuning our advertising strategies to
modify the tags we select for achieving more precise advertisement placements. We have established a
comprehensive system of product and consumer characteristic tags to match products with their target consumer
audience. Through analyzing consumption trends and consumer interactions with us, including browsing history,
purchase history and interaction information (such as browsing length and click rate), our Giikin system can
accurately place advertisements to target consumers who may need and want the products. Our advertisement
optimization team will also assign tags that are used by the social media platforms to the products to be launched to
indicate to the social media platforms the target consumer audience and/or intended advertising strategy. For more
details, see “– Advertisement Placement.”
(4) After the consumer places an order over our landing page, our warehouse management system automatically
generates the order. For more details, see “– Cross-border Logistics – Warehouse Management.”
(5) Leveraging automated order matching capabilities, our system will check whether there is any inventory for such a
product and match the order with the product in stock, and if not, we would procure the product from suppliers in
our supplier management system or suppliers registered on 1688.com. For more details, see “– Supply Chain
Management” and “– Cross-Border Logistics – Warehouse Management.”
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(6) Products procured from suppliers are delivered to our warehouses in Mainland China first for recording and exterior
checks.
(7) Products ordered by our overseas consumers are sorted to be ready for shipment to overseas third-party warehouses
of our logistics service providers.
(8) We cooperate with third-party logistics service providers that are typically responsible for logistics services from
Mainland China to the designated location, as well as payment collection upon delivery as applicable. For more
details, see “– Cross-border Logistics – Logistics Management.”
(9) Products are delivered to overseas third-party warehouses of our logistics service providers for further distribution
and delivery to our overseas consumers.
(10) Products are delivered by our logistics service providers to our overseas consumers.
Sets forth below is an illustration of the step-by-step transaction process from consumers’ viewing
the advertisements shown on the social media platforms to making payments:
Like
Sponsored
Comment Share
Step 1:
Browse Social Media
Platform Interface and
Our Advertisement Pops Up
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Step 2:
Click the Advertisement
and View Product
Specification
Step 3:
Checkout and
Make Payment
When a consumer places an order for a product, a transaction is typically initiated in our Giikin
system. If the ordered product is not available in our warehouses, we will procure the product from
suppliers and ship it to our warehouses in Mainland China, and we will further distribute and deliver it
to our consumers through logistics services providers. We provide two options for our consumers to
make payments either through a third party e-payment platform or on a cash-on-delivery basis.
Third-party payment platforms and logistics service providers are responsible for collecting payments
from our consumers, which will be paid to us after deducting relevant service fees. The following chart
illustrates the transaction and fund flow involved in the above business process:
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1
4
3
2
Our Group Our Landing Pages
Suppliers
Our warehouses in PRC Customers
Logistics services provider
Make payment Procurement
Place orders
Delivery/
fulfillment services
Transaction flow
Fund flow
Make payment on cash-on-
delivery basis(2)
Product delivery
Settlement of payments
made through third-party
e-payment platform
(1)
Make payment through
third-party e-payment
platform
(1)
Settlement of payments
collected on cash-on-delivery
basis(2)
Make payment
for logistics
services
Notes:
(1) Indicates funds flow if consumer makes payment through third-party e-payment platform.
(2) Indicates funds flow if consumer makes payment on cash-on-delivery basis.
Product Discovery
Product discovery is the first stage and the foundation of our business process. We combine
internal data and permissioned external data to conduct market trend analysis, enabling us to discover
products that are more likely to attract consumers and generate profits. We collect hot-selling products
information from 1688.com and third party social media and e-commerce platforms to analyze the
current market trends. In addition, we utilize internal data derived from landing pages in relation to
consumer behaviors, product features and historical sales information. Our Giikin system conducts data
analytics and generates diagrams to help us visualize such internal data to effectively identify the
best-selling product categories, the most popular color and size. With such insights derived from
internal data analytics, we summarize the historical market information. Based on internal data and
permissioned external data, our Giikin system delivers precise predictions and suggestions, empowering
our product discovery team to select products that match consumer preferences and needs. Empowered
by our technological capabilities, we are able to promote and sell products beyond the inventories on
hand as further detailed in “– Supply Chain Management”.
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With the customer behavior data insights we have accumulated through our business operations,
coupled with our analysis of market trends and information such as local trends and market conditions,
our product discovery team is able to apply our data analytical capabilities on our Giikin system to
discover products that best match the needs and desires of consumers and spurs pent up demand for
products that consumers may not be able to discover themselves. Our product discovery capabilities
enhances our ability to convert consumers and our order fulfillment rate, which ultimately translates to
higher profitability. Our product discovery team continuously tests the waters to refine and discover the
best products that can achieve a high gross profit margin. When discovering products, our Giikin system
estimates the gross profit margin of the product candidates based on our data insights. Specifically,
Giikin is capable of considering a series of factors, including the product cost, estimated transportation
cost based on the product weight, acceptance rate, and performance of similar products, to estimate the
gross profit margin of the product candidates that needs to be achieved with our advertisement
placement efforts in order to be profitable. Using this information, we can effectively plan our product
discovery and advertisement placement at the same time, to ensure that we discover products that
consumers demand, while balancing costs to maximize the profitability of the products that we discover
and sell.
We integrate a product discovery tool embedded in our Giikin system to analyze historical and
current market trend data and other data insights, helping us ascertain what products to sell and what
geographic locations to sell them at, based on consumer needs and preferences. Leveraging clustering
algorithms and recommendation models, this tool calculates recommendation indexes of product
candidates based on Internet trending and historical transaction information. This tool visualizes
expected popularity and profitability of product candidates by ranking them in a certain order and
recommend more than 100 products to our product discovery team at a time, which enables our product
discovery team to efficiently discover products that consumers need and want.

Our Giikin system ranks products based on their recommendation
index helping our product discovering team ascertain what to sell.
Search bar ﬁlters products and discovers the best
matching product within certain categories.
This index visualizes the expected outputs
and proﬁtability based on Internet trending
and historical transaction information.
These buttons in the bar provide different functions of the product
discovery tool including key word search, product relation matrix
and product management.
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In addition to the products that we discover and procure from suppliers and resell to our
consumers, leveraging our ability to understand consumer needs and preferences, we also began
developing and discovering products under our own brands to specifically address demand that we
identified. As of the Latest Practicable Date, we owned six brands, comprising SENADA BIKES,
V eimia, Konciwa, PETTENA, Orivin and Lanfo. Products under these brands cover a wide range of
adeptly designed and manufactured products that meet different needs of our consumers. We own these
brands through internal incubation or external acquisition and sell them primarily through designated
brand websites, and to a lesser extent, third-party e-commerce platforms such as Lazada, Amazon and
Shopee. In terms of the designated brand websites, similar to how we promote products on landing
pages, we place advertisements for products under our own brands on social media platforms to transfer
traffic to our designated brand websites through consumers' clicks, facilitating purchases. We believe
the combination of our designated brand websites and e-commerce platforms as the sales channels of
our branded products would effectively solidify our brand image and enhance brand recognition, which
are key to the success of our operations of our own brands. We continually seek to identify any existing
brands that we believe have potential to reach a greater audience through our social media platform
advertisement placement capabilities. We may consider acquiring such existing brands after analyzing
customer and supply chain data to further diversify our portfolio of brands. When we acquire existing
brands, we typically work to maintain existing management, who are most familiar with the brand, as
we seek to realize the potential of the brand through empowering them with our advanced advertisement
placement capabilities and our extensive e-commerce experience. We do so typically by allowing
existing management to retain a minority interest in the company owning the brand to align their
incentives with ours, so as to allow them to enjoy the rewards of any future appreciation in value of the
company from business growth after we acquire the brand.
The followings set forth certain information of the six brands owned by us:
• V eimia, a functional lingerie brand developed by us and launched in 2021. V eimia focuses on
consumers in Japan, intending to create lingerie that would give consumers confidence. To
launch V eimia, we entered into an exclusive cooperation agreement with a lingerie
manufacturer to turn our designs into products.
• SENADA BIKES , an electric bike brand acquired by us and launched in 2022. The electric
bikes cater for the needs of high-end customer groups in North America. We acquired
SENADA BIKES’s assets, including its product inventory, trademark, designated brand
website and social media accounts, and we cooperate with an electric bike manufacturer for
manufacturing of the electric bikes after the acquisition.
• Konciwa , an automatic UV umbrella brand, established in 2021 with a focus on the Japanese
market. We acquired Konciwa in 2023. This acquisition was facilitated through the
establishment of a limited liability company with the original brand operator, who
contributed essential assets, including the trademark, dedicated brand website, online store
operation rights, and product inventory. We maintain control of such company through
majority equity ownership. We collaborated with an umbrella manufacturer in Mainland
China to produce the Konciwa umbrellas. As at December 31, 2024, the Konciwa umbrella
ranked as the top-selling foldable umbrella on Amazon Japan, as measure by sales volume.
• PETTENA , a pet accessory brand developed by us and launched in 2023. We commenced the
operation of this brand targeting consumers in Japan by cooperating with a manufacturer in
Mainland China. Through this brand, we design, develop and sell a broad array of products
including dog leashes, pet carry bags, automatic pet feeders and remote monitors.
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• Orivin , a hair styling tool and beauty device brand developed by us and launched in 2023.
Targeting Japan market, the product offering includes hair curlers, tooth stain erasers, LED
facial mask devices and eye cream introduction devices. We entered into a framework
agreement to cooperate with a manufacturer to manufacture such devices.
• Lanfo, a cosmetic brand developed by us and launched in 2023. We explored the cosmetics
market targeting consumers in Japan with our self-developed eyebrow pencils through the
cooperation with a manufacturer in Mainland China. We offer a range of eyebrow pencils
available in multiple colors, designed to cater to the diverse preferences of Asian women.
Landing Page Generation
After discovering the products that we would like to recommend to consumers, our Giikin system
generates simple landing pages where our target consumers can purchase our products. The landing
pages are web pages that pop up in response to a user’s click on a link or advertisement displayed on a
social media platform. The landing pages’ sole purpose is to facilitate a customer’s purchase of the
product. Our landing pages enhance our consumers’ shopping experience while saving them time in
completing purchases by providing a simplified page to consumers that requests limited personal
information including their names, addresses, contact information and payment details (if applicable).
As we focus on recommending one to two products which are best matches to our target consumers
in advertisements we present to them, the content of our landing pages must be appealing enough in
order for us to take full advantage of such marketing opportunities. We are able to generate landing
pages quickly leveraging our technological capabilities and our experience which are integrated into our
Giikin system. We do this by leveraging our technologies to design the landing pages, using our vast
advertising material template library, to quickly generate content and text that can captivate consumers
to make their purchase.
Through combining various AIGC technologies, we have successfully developed a series of
algorithms and models that enable us to generate product placement content, including product
description design, video material generation, and advertisement copywriting and translation. By using
these technologies, we produce content that is more specifically tailored to our target consumer while
also reducing the need for human intervention which helps reduce our costs. Furthermore, these
technologies allow us to produce content to not only target specific consumers but also to stimulate
demand for specific products and create demand for products that consumers themselves may not have
anticipated. We integrate a chat generative pre-trained Transformer through API into our systems, which
empowers us to further boost the efficiency of our AIGC tools.
Advertisement Placement
As a cross-border social e-commerce company, we focus on marketing our products through
placing advertisements on social media platforms, such as Meta (including Facebook and Instagram),
TikTok, Google (including Y ouTube), Line, Snapchat and X (formerly Twitter).
We established a comprehensive system of product and consumer characteristic tags to match
products with their target consumer audience. By placing advertisements on social media platforms, we
captivate users to click on the advertisements which will bring them to our landing pages where they can
purchase our products. We use personalized recommendation algorithms to ensure our product
recommendations are more targeted and efficient. We also utilize AIGC technologies to generate
advertisement content that can catch the attention of target consumers and further stimulate consumers’
desire to purchase.
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Our advertising strategies are dynamic. We recommend one to two products which are best
matches to our targeted customers at any given time, which makes it easier for consumers to utilize their
fragmented time efficiently understand our products, and make a decision to purchase in a few seconds.
Through this model, we significantly reduce the time and effort for consumers to make a purchase. Also,
as we focus on recommending one to two which are best matches products to our target consumers in
advertisements we present to them, we have a limited opportunity to present products that are
responsive to our consumers’ preferences and desires. Leveraging our acute market insights and
advanced Giikin system, we continuously iterate and optimize our product portfolio to accurately cater
to and stimulate consumer appetite to take full advantage of every marketing opportunity. We may also
at times include slogans in our landing pages indicating limited-time special prices to encourage
customers to make their purchase decision quickly. Advertising one to two products which are best
matches effectively reduces the discovery cost of customers and allows us to realize higher ROIs. In
2024, our ROI was 191.1%, which was above the industry average, according to CIC.
We have accumulated consumer data insights globally through consumer interactions with us,
which includes browsing history, purchase history and interaction information (such as browsing length
and click rate). Through analyzing consumer interactions as well as consumption trends, our Giikin
system can recommend an advertising strategy to accurately place advertisements to recommend
products to the consumers who may need and want them, and precisely match products with these
consumers. Once a strategy is formulated, our advertisement optimization team will assign tags that are
used by the social media platforms to the product to be launched, with a view to indicating to the social
media platforms the target consumer audience and the intended advertising strategy. We constantly feed
updated data insights through the algorithms to ensure our system adapts to the latest changes in
consumer behavior and needs to increase the likelihood consumers will accept and purchase the
products we recommend.
Our Giikin system is connected through API with the advertising systems of social media
platforms, which enables a virtually automated advertisement placement process with limited human
intervention. Furthermore, our Giikin system can estimate the efficacy of our advertising strategy for a
specific product and continue to assess its efficacy after roll-out, to determine whether it meets the
gross profit margin for the specific product and advertising strategy to be profitable.
As of December 31, 2024, we employed a team of over 400 advertisement optimizers ( ᄿѓᎴʷ
ࢪwho work closely with other team members such as our product discovery team to deliver optimal
advertising. Through our Giikin system, they can efficiently match products with their target consumer
audience requiring less human input. They also continue to monitor and adjust advertising strategies
based on feedback collected through our Giikin system. By analyzing historical and real-time data, our
Giikin system conducts autonomous machine learning and generates advertisement distribution
suggestions, which empowers our advertisement optimizers to conduct their work in a more effective
manner. Our Giikin system continuously monitors the performance of our advertisements and suggests
adjustments to the advertising strategies to our advertisement optimizers to ensure that any unprofitable
advertisements can be quickly adjusted or terminated, and any profitable ones can be enhanced. In
addition, our Giikin system is also capable of learning from successful advertisement optimizers, to
replicate their successful advertising strategies and continually enhance our marketing strategies. In this
way, we seek to increasingly automate the advertising placement process.
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Our advertisement placement process involves the following steps:
• Advertisement generation. After product discovery, the process of advertisement placement
starts with the generation of advertisement materials. Assisted by our AIGC technologies, we
are capable of generating image-based as well as video-based advertisement materials for
further placement on social media platforms. Relying on various user and product tags and a
product relationship matrix developed by us, our Giikin system automatically generates
advertisements as well as advertising slogans based on the products discovered and
specifically tailors them to the target consumer audience to maximize exposure and
marketing impact. For more details, see “– Our Cross-border Social E-commerce Business –
Product Discovery.”


Our Giikin system generates product descriptions and
translates them into other languages.
Our Giikin system provides multiple
resources for product descriptions.
Our Giikin system generates advertisement slogans
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Advertisement optimization
team inputs video clips into
the module.
Our Giikin system edits, reorganizes and generates new videos according
to our advertising requirements and requirements of the social media
platform.
Our Giikin system generates videos
• Placement decision. After the advertisement materials are generated, the materials will be
reviewed by our advertisement optimization team. We will take into consideration of a series
of factors, including design, length, and user preference in vetting and customizing the
advertisement materials. For example, we may choose to snip particular video
advertisements for them to comply with duration requirements of a specific social media
platform. Based on input from our Giikin system which can estimate the efficacy of a
particular advertising strategy on a social media platform by analyzing data and examining
the tags placed by our product discovery team, our advertisement optimization team will
decide on the advertising strategy. Once a strategy is formulated, with the assistance of the
recommendation algorithms, our advertisement optimization team will assign tags that are
used by the social media platforms to the product to be launched to indicate to the social
media platforms the target consumer audience and/or intended advertising strategy.
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
This module estimates the number of consumers our advertisement
would reach based on the tags we have selected.
Our Giikin system recommends tags to
identify the target consumer audience.
• Placement on social media platforms. Our Giikin system is connected through API to the
advertising systems of the social media platforms, allowing advertising strategies across
multiple platforms to be executed with relative ease, which reduces the time for routine and
repetitive advertising operations.

Our Giikin system estimates the performance of advertisements and provides
suggestions on whether to continue or terminate the advertisements.
Our Giikin system estimates
products’ proﬁtability.
• Re-marketing. As consumers purchase our products, we collect consumer information
associated with their purchase from us, such as their address, contact information and
browsing history, which we then use to further refine our marketing strategies by placing
advertisement to recommend similar products to other similar consumers. Through our
Giikin system, we carry out precise re-marketing based on the tag attributes, regional and
category characteristics of our consumers in order to maximize our marketing efforts at a
lower cost.
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Advertisement Placement on Social Media Platforms
In line with industry norms, we place our advertisements on social media platforms primarily
through contracting with digital marketing service providers to facilitate advertisement placing on these
social media platforms according to our needs and to a small extent directly through contracting with a
social media platform. See “– Advertisement Placement – Social Media Platform” in this section for
more details about our direct cooperation with the social media platform.
According to CIC, it is a common industry practice for advertisers (including but not limited to
e-commerce companies) to enlist the services of digital marketing service providers for placing
advertisements on social media platforms. Advertisers enjoy enhanced operational efficiency leveraging
the services provided by digital marketing service providers, who are typically capable of facilitating
advertisements placing on multiple social media platforms and providing up-to-date insights on policy
updates of various platforms utilizing their experiences and advertisement placing operations managed
by them on the relevant social media platforms.
Our operations do not rely on any single social media platform and our marketing efforts are
platform-neutral, i.e., we focus on maximizing ROI and do not have a preference for any specific social
media platform we use. When analyzing marketing data, we consider the overall advertising
performance, target demographics, and effectiveness, rather than solely focusing on individual
platforms. In terms of advertisement content generation, while it is not uncommon for advertisers
engage third-party advertisement producers to facilitate the advertisement content creation according to
CIC, we generate advertisement content leveraging our technological capabilities without engaging
third-party advertisement producers.
As of the Latest Practicable Date, we primarily placed advertisements on Meta (including
Facebook and Instagram), TikTok, Google (including Y ouTube), Line, Snapchat and X (formerly
Twitter). According to CIC, Meta (including Facebook and Instagram), Google (including Y ouTube) and
TikTok are the major social media platforms globally.
Our Relationship with Digital Marketing Service Providers
We cooperate with digital marketing service providers to facilitate the logistics of placing our
self-generated advertisements on social media platforms, through services such as account
establishment, account recharging services, placing advertisement on social media platforms, and
advertisement credits collection, to attract consumers to purchase our products. For each year of the
Track Record Period, we cooperated with 31, 30 and 37 digital marketing service providers,
respectively. During the Track Record Period and up to the Latest Practicable Date, we had not
encountered any material dispute with our digital marketing service providers or any material breach of
our agreements with them.
During the Track Record Period, Yisainuo Information Technology, along with its affiliated
entities, was one of our top five digital marketing service providers. From June 2003 to August 2017,
Mr. Wang Y apeng, our chairman of the Board of Directors and executive Director, served as an executive
director, general manager, and/or supervisor of various affiliated entities of Yisainuo Information
Technology. For more details regarding the past relationship between Yisainuo Information Technology
and Mr. Wang Y apeng, see “Directors, Supervisors and Senior Management – Executive Directors.”
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From January 2019, we, through a wholly-owned subsidiary, collaborated with Hong Kong Magic
as our digital marketing service provider, to place advertisements across social media platforms. Our
collaboration gradually waned in 2021 and we ceased the collaboration with Hong Kong Magic in July
2021, therefore our transaction amount with Hong Kong Magic for each year of the Track Record Period
were nil. Mr. Wang Kunpeng (؃׺Mr. Wang Y apeng’s younger brother, wholly owned and was a
director of Hong Kong Magic until December 10, 2020, when he transferred all the shares he held in
Hong Kong Magic to an independent third party who was also appointed as the director to Hong Kong
Magic on the same date (the “ Transferee ”). The Transferee had been the sole shareholder and director
of Hong Kong Magic thereafter and up to the Latest Practicable Date. Save as disclosed herein and that
the Transferee was also a director and shareholder of Yisainuo Information Technology as of the Latest
Practicable Date, to the knowledge of our Directors, the Transferee does not have any past or present
relationships (including, without limitation, family, business, financing, trust or otherwise) with Mr.
Wang Kunpeng, our Company or our subsidiaries, the respective substantial shareholders, directors or
senior management, or any of the respective associates.
In April 2023, to further diversify our digital marketing service supplier pool and with an aim to
foster a long-term relationship, we started collaborating with a supplier for placing advertisements. Our
purchase amount from the supplier was RMB86.9 million for the year ended December 31, 2023 and
RMB9.1 million for the year ended December 31, 2024, and the supplier was not one of our five largest
suppliers for our cross-border social e-commerce business for the respective periods. As of the Latest
Practicable Date, this supplier was majority-owned by Mr. Liu Y upeng ( ᄎ͗ᘄ ), who held positions as a
director, manager and, through entities controlled by him, a minority shareholder in one of our
subsidiaries. The pricing terms between the supplier and us are determined through arm’s length
negotiations and are comparable to the arrangement with other digital marketing service suppliers.
Save as disclosed above, to the knowledge of our Directors, our digital marketing service
providers do not have any past or present relationships (including, without limitation, family, business,
financing, trust or otherwise) with our Company or subsidiaries, our or our subsidiaries’ respective
substantial shareholders, Directors or senior management, or any of their respective associates.
The following table sets forth the key terms of our typical cooperation agreements with digital
marketing service providers.
Scope of Services The digital marketing service providers provide us with online
marketing services on certain social media platforms, including
account establishment, account recharging services, placing
advertisement on social media platforms, and advertisement
credits collection.
To place advertisements on social media platforms, we are
required to open an advertising account on each of these
platforms. The digital marketing service provider will open an
advertising account for us with the relevant social media
platform, from which the social media platform will deduct the
corresponding advertisement fee from the deposit in our
advertising account (also known as advertising spend), as we
place advertisements on it.
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Social media platforms provide incentives to advertisers in the
form of advertisement credits. Advertisement credits act as
rebates and are proportional to the amount of advertising spend,
and can be fully cashed out and wired to our designated bank
account or used to set off our future advertising spend. The
digital marketing service provider collects such advertisement
credits for us as part of their services.
Pricing The price of the services is set forth in accordance with the
system of social media platforms, and the calculation methods
may include CPC, CPA and CPM.
Payment Any fees, including advertising spend and service fees, if
applicable, are typically due the month following the date of
accrual. Fees are generally payable on a monthly basis through
international wire transfer.
Social media platforms are responsible for calculating our
advertisement credits, based on our advertisement spend and
certain ratios, on a quarterly basis. The digital marketing service
provider is responsible for collecting the advertisement credits
for us as part of their services. The collected advertisement
credits can be transferred to us through international wire
transfer, added to our advertising account, or used to set off our
fees payable to the digital marketing service provider.
Late Fees If we are late on any service fees, we are generally responsible
for paying 0.01% to 0.5% of the unpaid amount per day as
liquidated damages and any relevant expenses incurred to the
digital marketing service provider.
Change in Platform Policies In the event that the social media platforms have to amend their
policies, applications and/or operation systems, our digital
marketing service providers agree to help us in seeking solutions
to accommodate the changes with the social media platforms.
Duration and Renewal The agreements typically have a fixed term of one year and is
renewable upon expiration, subject to mutual consent, if
applicable.
Generally, each party has the right to terminate the agreements by
giving advance written notice, or upon the other party’s material
breach of the agreement.
Dispute Resolution The agreements are typically governed by the laws of PRC and
provide for exclusive dispute resolution provisions, either in a
PRC court or in a designated arbitration institution.
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Social media platforms generate data, including advertisement fees and a set of key metrics, such
as clicks, actions, and impressions, which serve as performance indicators and form the basis for
calculating the fees charged to advertisers. We maintain direct access to such data generated by these
platforms.
Our Relationship with Social Media Platform
We directly place our advertisements on one of the popular social media platforms. We initially
placed advertisements through digital marketing service providers on this social media platform, which
is in line with industry norm according to CIC. However, considering our substantial volume of
advertisements on such platform and with an intention to provide services with higher quality, such
social media platform decided to directly cooperate with us since 2023. We placed considerable
advertisements on such social media platform since we built direct collaborative relationship with it in
2023 and it also became one of our top five suppliers for the years ended December 31, 2023 and 2024.
During the Track Record Period and up to the Latest Practicable Date, we had not encountered any
material dispute with the social media platform or any material breach of our agreements with it. The
following table sets forth the key terms in the terms of service of the social media platform.
Scope of Services The social media platform is responsible for providing us with
access to its business system to create, submit and/or place
advertisements.
Pricing We pay a fee to the social media platform to place
advertisements. The fees are calculated based on the billing
criteria under the applicable advertisement placement programs
we have registered on the social media platform. The fees are
typically calculated based on CPM and CPC.
Payment We are required to pay all amounts charged for each
advertisement we place on the social media platform, along with
any applicable taxes. The social media platform is responsible for
calculating the amount we owe.
The social media platform may take additional steps to collect
any amounts that are past due. In that case, we shall pay for all
expenses associated with such collection. In addition, amounts
past due will accrue interest at 1% per month or the lawful
maximum, whichever is lower.
Compliance with Laws and
Contracts
Both parties shall comply with all applicable laws, legal duties
and contractual and other legal obligations in respect of their
performance under the agreement.
Indemnification We are required to indemnify and hold harmless the social media
platform, to the maximum extent permitted by applicable law,
from any and all claims, liabilities, costs and expenses arising out
of a breach of the terms of service by us.
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Term The term of service starts when we register as a user on the social
media platform’s business system and terminates upon the
cancelation of our account.
The social media platform may cancel our account upon our
violation of use restrictions such as uploading or transmitting any
files that contain viruses that is malicious or technologically
harmful, using the social media platform in a manner that
infringes any patent, trademark, copyright or other proprietary
rights, and using the social media platform in a manner that
would violate any applicable laws.
Dispute Resolution The arrangement is governed by the laws of Singapore. Any
disputes arising out of this arrangement shall be finally settled by
arbitration in Singapore under the arbitration rules of the
Singapore International Arbitration Centre.
Supply Chain Management
We rely on effective supply chain management to achieve an efficient business model. At the stage
of product discovery, in addition to the product information, we obtain product suppliers' information at
the same time through our Giikin system, enabling us to timely contact them when our procurement
demand arises. Under our “rolling-basis” model, leveraging the precise estimation provided by our
Giikin system, we maintain a certain level of inventory for products which are predicted to be popular
such that consumer orders can be satisfied more efficiently and on a timelier basis. After we receive
orders from our consumers, the system will check whether there is any inventory for such a product, (i)
and if we have such products in our inventory under our "rolling-basis" model, the products will be
shipped to overseas third-party warehouses of our logistics service providers; (ii) and if not, we would
procure the product from suppliers, and the products procured from suppliers will be delivered to our
warehouses in Mainland China, and then will be shipped by our logistics service providers within a
short time, releasing our inventory capacity. As testament to the efficacy of our supply chain
management capabilities, for each year of the Track Record Period, our inventory to sales ratio
amounted to 3.7%, 3.2% and 4.0%, respectively.
Through our extensive experience in the packaging and e-commerce industries, we have built and
secured a robust supply chain that can support a variety of e-commerce products. Our Giikin system is
integrated into every step of our supply chain process, and supports efficient supply chain operations
through automated key functions covering procurement, payment to suppliers, order reminders and
tracking. Through these key functions, our supply chain management system helps us achieve efficient
inventory control, reduces operating costs, improves consumer satisfaction, and ensures supply chain
reliability. The following paragraphs summarize the key functions of our supply chain management
system.
• Automated purchasing: we operate an automated centralized procurement model. Our Giikin
system helps us forecast the demand for the products we launch, and our models can estimate
if we should maintain a certain level of inventory for specific products at our warehouses so
that orders can be satisfied more efficiently. For products that are not available in our
warehouses, our Giikin system automatically records unsent orders and places orders with
our suppliers.
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• Automated payments : Our supply chain management includes automated payment processes
to ensure that we pay our suppliers on time after our confirmation by a single click, which
helps us maintain our long-term supplier relationships.
• Automated reminders : Our system automates the reminder process to ensure suppliers deliver
orders on time. This helps improve supply chain stability and reduces the risk of delivery
delays.
• Automatic alerts for package tracking : Our tracking system ensures that we are kept up to
date with when products arrive at our warehouses. This provides timely visibility and enables
us to optimize inventory management and distribution planning.
We have an extensive network of product suppliers through various channels, providing more
choices to us and our consumers and minimizing dependence on any specific supplier. We primarily
purchase products (1) directly from suppliers whom we have on-boarded to our supplier management
system, or (2) from suppliers registered on 1688.com, an integrated wholesale marketplace operated by
Alibaba Group Holding Limited. Our Giikin system is directly connected to 1688.com. We conducted
extensive procurement via 1688.com and received a Super Buyer status from 1688.com, a recognition
based on transaction volume and our reputable track record, which is visible to suppliers and provides
them with assurance when they sell products to us. The Super Buyer status also provides us with
favorable credit terms for payments made through 1688.com to the suppliers.
For suppliers from whom we directly procure products, before we onboard suppliers into our
system, we would screen them by running a background check. After receiving orders from our
consumers, our Giikin system automatically sets a reminder based on level of importance to ensure
suppliers deliver orders on time. Leveraging the data connection between us and the supplier, we can
achieve fast delivery of a large number of orders within a short period of time.
The terms of purchase for suppliers registered on 1688.com are governed by 1688.com’s terms of
service. The following table sets forth the key terms of the terms of service.
Scope of Services We procure our products from suppliers registered on 1688.com.
1688.com provides the platform, payment system, and mediation
services to suppliers and us.
Pricing The price of the product is generally determined by the supplier.
We may have special offers and discounts when 1688.com or the
supplier conduct promotional activities.
1688.com is entitled to charge suppliers service fees, including
transaction service fees and technology service fees.
Payment We typically make payment when we place an order on the
platform through mobile payment or wire transfer, and the
platform will then transfer the payment to the supplier when we
confirm our acceptance of the products.
In addition, according to agreements between the supplier and us,
we can also have credit terms, with which the payment for each
order is typically due 30 days following the date of the order and
is payable through wire transfer.
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Product Return We are generally allowed to return the products without cause
within seven days and are eligible for a refund.
Duration The term of service starts when we register as a user on the
1688.com platform and terminates upon the cancelation of our
account.
Dispute Resolution 1688.com provides mediation services when disputes arise from
procurement on the platform. If either party is dissatisfied with
the platform’s mediation proposal, the party may bring suit in a
PRC court or an arbitration institution with jurisdiction for such
dispute.
For suppliers with whom we purchase directly, we individually negotiate our procurement
agreements with them. The following table sets forth the key terms of our form procurement agreement
with product suppliers from whom we purchase directly.
Scope of Services Pursuant to the agreement, the product suppliers are responsible
for delivering products to us within a specific period set forth in
purchase orders.
Pricing The price of the product is generally determined through
negotiation between suppliers and us as stated in purchase orders.
Payment We make payments to suppliers, according to credit terms set
forth in the purchase orders.
Indemnification The suppliers are obligated to provide sufficient products and are
responsible for any damage arising out of our lack of inventory.
In addition, suppliers shall indemnify us for any liability from
product quality and infringement issues.
Duration and Renewal The agreement has a fixed initial duration of one year, and is
renewable upon expiration. Each party is entitled to terminate the
agreement upon advanced written notice and mutual consent.
Dispute Resolution The agreement is governed by the laws of PRC and each party
may bring suit in a PRC court with jurisdiction.
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Cross-Border Logistics
Logistics Management
We work with logistics service providers to manage the transportation, distribution, warehousing,
and overall flow of our products, to ensure they are delivered to their destinations efficiently and on
schedule. For each year of the Track Record Period, we cooperated with 75, 93 and 105 logistics service
providers, respectively. After a consumer places an order, if the product is not available in our
warehouses, we purchase the product from a supplier who arranges for it to be shipped to one of our
leased warehouses in Mainland China. After we conduct an exterior check of the product, the product
will generally be shipped to the logistics service provider’s overseas third-party warehouses for
distribution and delivery to the consumer. If the delivery is rejected or the product is returned, the
product will be shipped back to the overseas third-party warehouses, and the logistics service provider
will deliver the product a second time when the product is purchased again. The purchase price paid by
the consumer will include the shipping expenses, applicable taxes in connection with shipping, and
other charges imposed on our products.
Our logistics system is equipped with an order auto push function. Once a consumer places an
order, the system will automatically send the order information to the logistics service provider, which
expedites order processing. We provide consumers with real-time tracking using information provided
to us by the logistic service provider. Our consumers can keep track of the current location and delivery
status of their orders. Logistics status tracking increases transparency and helps consumers better plan
and manage their schedules. Typically, the order will be delivered within seven days, and we will
contact the consumer if there is a material delay.
The following table sets forth the key terms of our typical agreements with logistics service
providers.
Scope of Services The logistics service providers are typically responsible for
logistics service from Mainland China to the designated location,
including pick-up service in Mainland China, warehousing,
customs clearance, local transportation and delivery, payment of
import/export taxes in Mainland China and at the destination, as
well as payment collection upon delivery.
Pricing The price of the transportation service is negotiated on an arm
length based on weight and distance, and may include
warehousing fees, import/export taxes, and other service fees, if
applicable.
Payment The payment of the transportation fee is typically due on a
monthly basis through international wire transfer.
The logistics service provider is generally responsible for
transferring all payments collected upon delivery to us on a
monthly periodic basis. The transportation fee that is due may
typically be deducted from all current payments collected upon
delivery by the logistics service provider, and the logistics
service provider is responsible for transferring the balance.
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Indemnification The logistics service provider is responsible for any products lost
and/or damaged after the product leaves our warehouses.
Each party shall indemnify the other party for damages arising
out of its failure to perform the agreements.
Duration and Renewal The agreements typically have a fixed initial duration between
one to three years, and is renewable upon expiration, subject to
mutual consent.
Each party has the right to terminate the agreements by giving
advance written notice, or upon the other party’s breach of the
agreements.
Dispute Resolution The agreements are typically governed by the laws of PRC and
provide for exclusive dispute resolution provisions, either in a
PRC court or in a designated arbitration institution.
Warehouse Management
In Mainland China, we leased one warehouse in Dongguan, Guangdong Province and one
warehouse in Jinjiang, Fujian Province as of the Latest Practicable Date.
For warehouses outside of Mainland China, we typically use third-party warehouses operated by
logistics service providers, covering countries and regions in Asia, as well as Europe and North
America. Our agreements with logistics service providers include terms relating to the use of their
warehouses. For details, see “– Our Cross-border Social E-commerce Business – Cross-border Logistics
– Logistics Management” in this section.
At our leased warehouses in Mainland China, we have developed a warehouse management system
that ensures efficient warehouse operations through a series of advanced technologies and processes.
Our warehouse operations are designed so that as soon as products arrive from our suppliers at our
warehouses, they are processed for transportation to our consumers, to minimize the time in which
products are kept at our warehouses. This setup increases the efficiency of our inventory management
by expediting our delivery process.
Our warehouse management system performs key functions such as automated warehousing order
generation, automatic inventory management, abnormal order blocking and automatic order matching:
• Automatic Warehousing order generation: our warehouse management system is capable of
automating order generation, which greatly improves the speed and accuracy of order
processing. This helps speed up the order delivery process and reduces the possibility of
manual errors.
• Automatic inventory management: our warehouse management system is capable of
automatically marking products from inventory to fulfill orders. This feature helps us process
orders quickly to minimize the time in which products are kept at our warehouses.
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• Abnormal order blocking: our warehouse management system has an abnormal order
blocking feature that detects and recognizes abnormalities associated with an order. This can
include incorrect addresses, or other issues. Once an abnormal order is blocked, our Giikin
system or our team will quickly take appropriate action to ensure the issue is resolved in a
timely manner.
• Automatic order matching: our warehouse management system is equipped with automated
order matching capabilities. Our system matches and allocates products so that orders can be
prepared and delivered quickly. This improves the efficiency of order processing and reduces
the risk of incorrect shipments.
Cross-Border Payment
We mainly adopt two payment settlement methods for our cross-border social e-commerce
business: (1) collection of cash on delivery by logistics companies, and (2) online payment by
consumers through independent third-party payment platforms. Given mobile and online payment
services in emerging markets such as Southeast Asia have not been fully developed, we provide cash on
delivery as a payment option, which includes cash payment and any other types of payment methods
including credit card or mobile payment at the option of the consumer that is available in the customer’s
country or region. Subject to local regulations, we provide both payment options and, consumers can
choose either option based on personal preference.
Where the cash is collected by the logistics service provider on delivery, the logistics service
provider is responsible for transferring all payments collected upon delivery to us on a monthly periodic
basis. We selectively collaborate with well-established global and local payment service providers to
help us handle electronic payment processing, ensuring that our consumers can make purchases
seamlessly while adhering to the highest standards of security. We select payment service providers
through a comprehensive evaluation process. The selection criteria include various essential factors:
possession of requisite payment licenses in compliance with local laws; established track record,
including the offering of diverse payment options, a high success rate in processing payments, and a
history of positive customer feedback; competitive fee rates and efficient settlement cycles; ability to
handle multiple currencies; availability of an open API, allowing easy integration with our own payment
system during the initial phase; commitment to quality customer services and responsiveness.
By providing these payment options, we can facilitate our consumers in making payment to
improve our order fulfillment rate, while at the same time eliminating consumer credit risk. For each
year of the Track Record Period, the order fulfillment rate of our products amounted to 86.3%, 88.4%
and 84.9%, respectively. During the same periods, we cooperated with 13, 15 and 7 payment service
suppliers, respectively. In 2024, the number of our cooperated payment service suppliers decreased
compared with that in the previous years, as we actively selected to partner with suppliers that met our
stringent service requirements in delivering satisfactory purchasing experience to our customers. To the
knowledge of our Directors, our payment service suppliers do not have any past or present relationships
(including, without limitation, family, business, financing, trust or otherwise) with our Company or
subsidiaries, our or our subsidiaries’ respective substantial shareholders, Directors or senior
management, or any of their respective associates.
The terms of third-party payment services are governed by our agreements with third-party
payment platforms and their terms of service. The following table sets forth the key terms of the typical
agreements and the terms of service.
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Scope of Services The payment service provider typically helps us collect payments
from consumers or send payments to them for refunds, in
multiple currencies and is responsible for paying us in our
desired currency.
The payment service provider also provides us with foreign
exchange services, if applicable.
Pricing The service fee is priced according to the policies of the various
e-payment platforms, typically ranging from 2.35% to 3.70% of
each transaction amount, and may include foreign exchange
costs, payment fees, service fees to other third-party platform, if
applicable.
Payment The payment of the service fee is due immediately upon closing
of the original transaction.
The service fee is generally deducted from any amounts collected
from consumers and the balance is then paid to us.
Indemnification We are responsible for any damages suffered by us or any third
party, from the services provided by the payment service
provider, as long as it strictly executes our instructions.
Term and Renewal The agreements typically do not have a specified term. We have
the right to terminate the agreements either, in certain cases,
immediately or by giving advance notice.
The payment service provider is typically entitled to terminate
the agreements if we provide false or misleading information or
fail to provide any important information when requested.
Dispute Resolution The agreements are typically governed by the laws of the
countries or regions where we establish our accounts, and either
party may bring suit in courts or arbitration institutions of the
same jurisdiction.
Purchase and After-Sales Services
Customer Service and F eedback
We provide customer service while a consumer is making their purchase on our landing page via a
pop up customer service assistant.
With information provided by our consumers through landing pages, we can also contact them and
offer after-sales services. Aiming at responding to our consumers effectively and efficiently, we respond
to inquiries and feedback on a 24/7 basis. Our consumers usually contact us for the following reasons:
(i) to amend their orders, including types and quantities of products, size or color, and shipping address;
(ii) to check the process progress of their orders; (iii) to check the delivery status of their orders; (iv) to
report a defective, damaged, or missing item in their orders; and (v) to initiate a return, exchange, or
refund of their orders.
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We also utilize an AI bot to provide written and verbal responses to queries and complaints from
consumers. The AI bot can provide responses in 32 languages. The AI bot can typically resolve the
feedback without human intervention, increasing our total order fulfillment rate. A live customer service
representative will continue to handle the complaint if the consumer is not satisfied with the responses
from the AI bot, and can use the AI bot to translate responses into the customer’s language. As a result,
the AI bot helps us reduce labor costs for hiring local customer service staff, and facilitates our
cross-border business expansion.
We leverage our digital system to improve the quality as well as efficiency of our customer
services. We independently develop and operate the e-mail management system for our landing pages,
which increases our response efficiency. The e-mail management system integrates various functions,
including responding to consumers’ inquiries, receiving timely comments and checking order
information and logistics. We promptly and effectively respond to consumers’ inquires through the
integrated e-mail management system.
We also provide various channels to ascertain consumers’ expectations and collect consumers’
comments. We mainly collect consumers’ feedback through various channels, including but not limited
to online customer service and comment collection surveys that we encourage consumers to fill out.
Management of Customer F eedback
We receive customer feedback from time to time from our e-commerce customers. Customer
feedback usually relates to: (i) general after-sales issues; (ii) logistics issues; (iii) incorrect or defective
product; and (iv) return and refund request. We have adopted a standardized customer service policy
setting forth how each situation should be handled by our customer service staff.
When general after-sales issues arise, such as inconsistency between the product and the
customer’s expectation, customer’s lack of instructions on product usage, or customer’s dissatisfaction
with our customer service, we will communicate with consumers to address their concerns, and we may
also offer gifts (such as discount coupons) to resolve such issues.
For consumers whose products are not successfully delivered, we will verify the logistics
information for their orders. In cases where we failed to ship the product from our warehouses, we will
promptly ship the product. If the unsuccessful delivery is attributed to the logistics company, we will
arrange for reshipment and require the logistics company to compensate our consumer monetarily.
If the consumer asks for an exchange on the ground that we shipped the incorrect product or if
there is a defect in the shipped product, after confirmation, we will directly send a replacement without
requiring the consumer to return the received product. If consumers request to return the product and
provide them with a refund, and do not accept alternative solutions such as product exchanges, we will
accept such requests. During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material product return, exchange or refund requested from our consumers and had not
suffered any significant loss or damages caused by product return, exchange or refund. See “− Our
Product Return and Refund Policies”. As testament to our ability to resolve consumer queries, we have
maintained a high order fulfillment rate. For each year of the Track Record Period, our order fulfillment
rate amounted to 86.3%, 88.4% and 84.9%, respectively.
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Our Technology Capabilities
Our Technology Infrastructure
Our technology infrastructure is comprised of three distinct layers. The bottom layer of our
technology infrastructure is the cloud-based technology architecture, which acts as the foundation of
our business operations. The middle layer is comprised of our data platform and the AI algorithms and
models. This technology infrastructure supports the top-level applications of our Giikin system. The
following diagram sets forth a graphical representation of our technology infrastructure.
Cloud Server
Features
Data Source
AI Models
Key
Features
Materials
Data Engines
Features
Giikin System Features
Data Platform AI Applications
Bottom Layer:
Cloud-Based Technology
Architecture
Middle Layer:
Data Platform and AI
Algorithms and Models
Top-Level Applications
AWS Alibaba Cloud Huawei Cloud
Storage and Computing Reliability and Availability Security
Internal Data Permissioned External Data
Models through API Open-Source Models
Recognition and Classification
Product Media Advertisement
Translation Keywords
Content Generation
Content Recognition Content Generation Content Process
Dataworks Maxcompute
Data Cleaning
Data Analysis
Data Modeling
Product Discovery Content Generation and Design Advertisement Placement
Supply Chain Management Warehouse Management
Payment Management Customer Service
Logistics Management
Comprehensive Operation Features
Data Processing
AI Applications
Data Storage and
Computing
Business Solutions
Machine Learning
Our Giikin system is built on a highly scalable and stable cloud-based technology architecture,
which enables us to timely process and analyze a large amount of internal and permissioned external
data from each stage of our business process to meet the needs and demand of our consumers. We derive
internal data from our business operation, such as the data generated from the interaction between our
consumers and landing pages. We obtain permissioned external data from sources other than our
cross-border social e-commerce business, such as consumption trends. We combine internal and
permissioned external data to conduct data analysis to support our business operations. We effectively
utilize data and information available in the public domain to gain insights into the latest trends and
consumer preferences. For instance, during product discovery, we actively gather information on
top-selling products from third-party platforms, enabling us to discern prevailing market trends.
Simultaneously, we leverage our internal data derived from landing pages, assessing consumer
behaviors, product features, and historical sales data. Our Giikin system plays a crucial role in this
process, which employs advanced data analytics and generates visual diagrams that illustrate key trends
within our internal data, allowing us to effectively identify best-selling product categories, as well as
the most popular colors and sizes. Armed with insights derived from both internal data and
permissioned external data, our Giikin system delivers precise predictions and tailored suggestions,
enabling our product discovery team to curate product selections that closely align with consumer
preferences and needs. In turn, such data is used to feed and train our Giikin system through machine
learning.
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We deploy our cloud-based technology architecture by procuring cloud-based services from
Alibaba Cloud and Huawei Cloud directly, and from AWS through a certified partner. Alibaba Cloud,
Huawei Cloud and AWS are well-established cloud service providers in the industry. We have
implemented various internal policies and procedures to ensure the security of the data we collect,
process, and store during the course of our business. For more details, see “− Data Compliance and Data
Security.” The following table sets forth the typical key terms of our agreements with Alibaba Cloud,
Huawei Cloud and the certified partner of AWS:
Scope of Services The cloud service provider who enters into service agreement with us
directly provides us with a range of on-demand cloud services
including, as the case may be, data storage, cloud server, database,
backup, firewall, data security management, technical consultation
services, etc.
The certified partner of AWS provides us with various AWS technical
support services, including AWS account application or creation,
through which we are able to enjoy cloud services on AWS, such as
database, firewall, data storage, and technical consultation services.
Pricing The unit prices of cloud services under the agreements are generally
charged based on a fixed amount per gigabyte, and the service fees are
calculated according to the bandwidth we consume.
Payment The service fees are generally payable on a monthly basis through wire
transfer or subject to prepayment, according to the cloud service we
subscribe for. In the case that we make monthly payment after service
subscription, the service fees are generally due within 35 days
following the issuance of monthly bills.
Indemnification Each party shall indemnify the other party for damages arising out of
violation of the confidential clause in the agreement or infringement of
any third party’s rights in relation to the performance of the agreement.
We shall indemnify the cloud service provider or the certified partner
of AWS, as the case may be, any damage arising from our inappropriate
use of the cloud services.
Duration and Termination The agreements typically has a fixed term of one year. Each party is
entitled to terminate the agreement upon mutual negotiation and
consensus, and the cloud service provider is entitled to terminate the
agreement if we violate any of the clauses therein.
Dispute Resolution The agreement is governed by the laws of the PRC and any dispute
arising from the execution or performance of the agreement shall be
settled in a PRC court.
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The cloud-based technology architecture has a multi-cloud structure, which reduces the risk of
system crashes and cybersecurity attacks. The key features of the cloud-based technology architecture
are set out below:
• Large real-time data storage and advanced computing capabilities . As the foundational layer
of our Giikin system, our cloud servers receive real-time data generated from the middle
layer comprising our data platform and the AI algorithms and models, and the top -level
applications of our Giikin system. We utilize multiple cloud servers at the same time to
expand the total storage of our Giikin system. Advanced computing tools are also integrated
into our cloud servers, which empower us to conduct real-time data analysis and provide us
with more flexibility to timely adjust our operation decisions.
• Reliability and availability. We adopt a multi-availability-zone and high-availability
architecture, by placing multiple cloud servers and databases in different availability zones,
comprising clusters of multiple and isolated data centers. Once a node failure is detected at
any cloud server or database, such server or database can be taken offline within seconds to
ensure the availability of the whole system network. We also actively arrange for regular
backups to maintain data availability.
• Security . The cloud servers are equipped with built-in firewalls to timely intercept any
external abnormal requests. The built-in firewalls, together with the advanced firewalls
established by us, and the 24/7 monitoring service provided by the cloud service provider,
safeguards the security of our Giikin system from both internal abnormalities and external
threats.
Data plays an essential role in our business as we combine internal data and permissioned external
data to conduct market trend analysis. For instance, we collect hot-selling products information from
third-party platforms as well as internal data derived from landing pages, so that we are able to analyze
the current market trends in a more precise manner. In order for our business operations to run
smoothly, we must process data efficiently and precisely. To do so, we have established a data platform
with data analysis tools procured from Alibaba Cloud. Through our data platform, we conduct data
cleansing, analysis and modeling to support the top-level applications of our Giikin system such as tools
for product discovery and content generation and design. We have also developed data analysis models
to meet specific and advanced requirements of our business. For example, we independently developed
an order fulfillment rate analysis model to process and analyze order data to estimate the order
fulfillment rate of specific products, empowering us to estimate the sales performance and the market
acceptance of each product.
We are committed to the development and application of AI algorithms and models. We use AI
models provided by third-party developers through API, and we also conduct secondary development
based on open-source AI algorithms and models, and train them with our business data to empower us to
discover products that are more tailored to consumers’ needs and demand. We have established a team
of R&D staff dedicated to using our business data to train our models. The key features of the AI
algorithms and models are set out below:
• Accurate recognition and classification capabilities . The AI algorithms and models
efficiently recognize and classify large volumes of data collected from our business or the
Internet, including texts, images and videos. These algorithms and models further process the
data to generate precise product tags and establish a high-quality material library within our
Giikin system.
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• Efficient content generation capabilities . The AI algorithms and models can efficiently
generate content in each stage of our business process, such as advertising content for our
products, and written and verbal responses in our consumer services. With the help of
Transformer, a large language model used for processing natural languages, we can
effectively add descriptions to each product based on its characteristic and attribute. We also
established and constantly update our databases and libraries of advertising materials, which
the AI algorithms and models use to generate content more effectively.
• Continuous learning capabilities . The AI algorithms and models continue to optimize
themselves with business data that we have accumulated, supporting a virtuous cycle where
the AI algorithms and models facilitate our business operation by generating attractive
advertising content and proposing precise recommendation advice, and in turn, we can use
the data generated from our business to further train these algorithms and models, enhancing
their speed and accuracy in our business operation.
Our Giikin System
Our Giikin system is an AI-driven self-developed unified operations management system that we
use throughout our entire social e-commerce business process, covering product discovery, product
content and landing page generation, advertisement placement, logistics and payment management and
consumer service. For more details, see “– Our Cross-border Social E-commerce Business” in this
section.
Our GiiMall SaaS Platform
Benefiting from our industry experience, we have also developed a one-stop service SaaS platform
called GiiMall targeting Mainland China-based cross-border e-commerce suppliers. In January 2022,
we started providing GiiMall to such suppliers on a complimentary basis for testing purposes to
optimize the platform. The GiiMall platform helps suppliers build landing pages and sell their products
to consumers outside of Mainland China through a unified streamlined dashboard. We replicate our own
experience to provide suppliers with a service of full chain of processes, covering the supply chain,
landing page generation, advertisement placement, cross-border logistics and cross-border payment
services. GiiMall enables suppliers to easily display, manage, market and sell their products through
multiple social media platforms. It also provides a single integrated, easy-to-use back end dashboard
that suppliers can use to manage their business and buyers across multiple sales channels. As a SaaS
platform, GiiMall operates on shared infrastructure, freeing up hardware for suppliers and consolidating
data generated from interactions between buyers and suppliers. During the Track Record Period, we did
not record any revenue from providing SaaS services through GiiMall.
Research and Development
We invest heavily in research and development in our cross-border social e-commerce business. As
of March 31, 2025, we owned 4 patents and 140 software copyrights, in relation to the development of
algorithms, software systems, and other technology used for our cross-border social e-commerce
business. Our AIGC technologies are primarily open-source and not patentable due to absence of
novelty and inventiveness. We established a R&D center for our cross-border social e-commerce
business, located in Zhengzhou, Henan Province. For each year of the Track Record Period, our
research and development expenses for our cross-border social e-commerce business recorded RMB43.7
million, RMB43.1 million and RMB39.6 million, respectively.
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Our R&D strategy closely aligns with our cross-border social e-commerce business model. We
recognize the central role of data in the era of social media and believe data is the nexus between
technology and business. We leverage our access to data through our business operations to address
complex technology issues faced by e-commerce businesses, including demand analysis, data modeling,
data ETL (extract, transform, load), and data visualization. In return, improvements in technology can
facilitate the growth of our business. These improvements result in flywheel effects – as our business
grows, we accumulate more data and generate data insights, and find more ways to use those in our
business processes, which in turn improves our technological capabilities further driving business
growth. The figure below illustrates this concept.
Data
focused
System
Technology-side
Business-side
-

Technology Facilitating Growth
With data obtained through our business,
we can train our algorithms and models
to improve the efficacy of (1) our product
discovery capabilities and (2) our
advertisement placement capabilities on
our Giikin system, resulting in more
accurate product recommendations,
which translates into business growth and
greater profitability.
We accumulate a large amount of internal
data from our operations as well as
through interaction with consumers.
With the development of our Giikin
system, we capture permissioned
external data to analyze market trends.
Business Data Empowering
 Technology
Following this approach, we independently developed Giikin, a comprehensive management
system to connect our business and technology which covers all of our business processes. Through
R&D, we strive to continue to standardize and automate each business process to improve the efficiency
of each business process, reduce the need for human intervention and reduce operational costs. We do
this by continuously improving our algorithms and models through (1) developing new algorithms and
models for new use cases and (2) training our existing algorithms and models with the data we access
through our business. For example, we have standardized advertisement placement through the
generation of tags associated with consumer needs and products put on sale by developing advanced
algorithms to create consumer profiles and product tags. We use business data to improve the
effectiveness of algorithms by training and fine-tuning them, which we believe results in improvements
in our technology that translates into growth of our business. For example, through training, algorithms
used in our Giikin system can provide more accurate product recommendations and perform more
accurate advertisement placement.
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We develop and improve our algorithms and models through different methods. After identifying a
business need that can benefit from further automation or efficiency enhancement, we retrieve and
review the relevant business data to start the process of designing, building and improving our models.
These models ultimately become prototypes of algorithms used in our Giikin system. Through an ETL
process, on an ongoing basis, we also process and digitalize the business data and store it into an output
data container for further use. This data can then be used to develop new algorithms and models to
address a new business need and to train our existing algorithm and models to improve their efficiency.
In addition, we integrate applications across business processes to share real-time data to provide more
granular data visualization, which allows us to make better decisions across all of our business
processes. In 2021, we entered into a strategic cooperation with Huawei to further develop applications
for digitalization in cross-border social e-commerce in cloud computing, image processing, big data and
AI. In June 2023, we strengthened our cooperation with Huawei, which would deepen our development
of AI applications in our cross-border social e-commerce business based on Huawei's large-scale data
model in the areas of AIGC, application modernization, data crawling and data governance, with a view
to enhancing digitalization in each stage of our cross-border social e-commerce business.
We had approximately 200 research and development personnel for our cross-border social
e-commerce business as of December 31, 2024.
We leverage big data analytics, AI and other technologies to empower our business and continue to
launch features to enhance our capabilities to assist goods to discover people. During the Track Record
Period, we launched and integrated the following features into our Giikin system as part of our
cross-border social e-commerce business:
• ChatGiiKin-6B, an e-commerce text class model. ChatGiiKin-6B is capable of creating tags
that are specifically associated with a product that can later be used for our precise
advertising strategies. For example, we can assign tags to our products regarding the age,
gender, shopping habits, and other information of the target customer audience;
• G-king, a technology-powered placement assistant. We launched G-king in July 2023.
G-king provides accurate and effective advertising strategies to our advertisement optimizers
for reference based on historical advertisement data and experience of successful
advertisement optimizers, enhancing their advertisement placement efficiency; and
• GiiAI, an e-commerce design and material generation model. GiiAI was launched in August
2023. GiiAI is used for image recognition, text translation and video clip editing, improving
our efficiency of advertisement content generation.
Pricing
In line with industry norm, we adopt a market-oriented pricing approach. We principally offer
products at competitive prices. We price our products based on, to the extent practicable, a series of
factors including: (i) product purchase costs; (ii) operation costs; (iii) marketing or advertising costs
and expenses; (iv) transportation or logistics costs; (v) expected profit margin; (vi) order fulfillment
rate; and (vii) foreign exchange rate.
Using Giikin, our product discovery team determines a pricing plan for each product taking into
account the above-mentioned factors. We review our pricing strategies continuously and adjust the
prices of our products from time to time.
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OUR PAPER PACKAGING BUSINESS
We have been in the paper packaging business for more than 20 years and operated 10 large-scale
packaging and printing production facilities across Mainland China, as of December 31, 2024. We
ranked first among FMCG paper consumer packaging providers in Mainland China, based on revenue in
2024, according to CIC, providing enterprise customers with integrated one-stop paper packaging
products and services from marketing strategies, product design, process design, technology planning,
to transportation and logistics. We ranked fifth in the “Top 100 Chinese Printing and Packaging
Enterprises” published by Printing Manager Magazine in 2022. Our enterprise customers are primarily
leading enterprises in food, catering, beverage, daily necessities, and other segments of the FMCG
industry. We are focused on delivering comprehensive paper packaging products to our enterprise
customers. We seek to not only simply provide paper packaging to our enterprise customers, but also
offer product design, process design and technology planning services to add value for our enterprise
customers as well as to help our enterprise customers manage their packaging costs by procuring the
most optimal and cost-efficient raw materials when designing the packaging. Riding on the trend to use
more environmentally-friendly materials and reduce plastic use, we have focused our R&D efforts to
develop environmentally-friendly materials and techniques to produce green packaging, catering to
evolving FMCG consumption trends. For each year of the Track Record Period, we had 238, 278 and
300 packaging customers, respectively. During the same periods, revenues from our paper packaging
business amounted to RMB1,982.6 million, RMB2,096.6 million and RMB2,099.5 million, representing
36.9%, 31.3% and 38.0% of our total revenues, respectively.
According to CIC, typical paper packaging manufacturers primarily provide packaging production
services, manufacturing standardized packaging products in accordance with designs designated by
customers; while providers of one-stop paper packaging products and services are able to provide more
comprehensive services covering marketing strategies, product design, process design, technology
planning, transportation and logistics. Our decades-long relationship with Customer Group A, a leading
Chinese diary products producer, is a testament to our capabilities of providing one-stop paper
packaging products and services. We started our collaboration with Customer Group A since 2006 and
have maintained a close business relationship with it ever since, providing paper packaging products
ranging from marketing strategies, product design, process design, technology planning, to
transportation and logistics. For example, we proactively proposed our packaging designs to Customer
Group A, emphasizing on the quality of dairy products. We combined components such as grassland,
cows and sunshine on the packaging cartons to give the end customers an impression of natural and
freshness, echoing with Customer Group A ’s brand positioning strategies and intensifying brand images
in the market. During the Track Record Period, eight packaging designs proposed by us to Customer
Group A were accepted and came into the market. We employed more than 30 printing and packaging
techniques, such as calendaring, in the production of Customer Group A ’s product packaging to enhance
the visual expression of its products. We also provide technology planning services to develop patents
with its R&D team in relation to the packaging for its products. We acted as an inventor to Customer
Group A for certain patents. In 2023, we were also awarded as a benchmark supplier by Customer
Group A. For more details of our transactions with Customer Group A, see “– Our Customers – Major
Customers.”
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Key Operating Metrics
The following table sets forth the key operating metrics of our paper packaging business.
For the year ended December 31,
2022 2023 2024
Production volume (million sq.m.) 846.7 925.3 1,026.1
Inventory turnover days (Note) 58.7 57.4 54.5
Note: Inventory turnover days is calculated by dividing the average of the beginning and ending balances of inventories of
our paper packaging business for the relevant year by the corresponding cost of sales of our paper packaging
business for the same year, multiplied by 365 days.
Our Products
We are a packaging supplier in Mainland China and are principally engaged in the manufacturing
and sale of FMCG packaging products including color packaging cartons/boxes, eco-friendly paper
bags, and food packaging. We carefully select eco-friendly raw materials used for production of our
paper packaging products; for example, we utilize water-based ink that is tested as in compliance with
eco-friendly standards including RoHS and REACH issued by EU, and we also utilize corn starch and
phyto-based ink, which are widely-recognized as eco-friendly materials in the industry according to
CIC. As of March 31, 2025, we owned 32 patents relating to green packaging materials and products.
The following is a brief description of our principal packaging products:
The color packaging carton/box is a packaging box or consumer paper carton for retail and
promotion purposes, which is made of white cardboard, white liner board and corrugated paper. Color
packaging cartons/boxes can typically withstand a certain amount of pressure and therefore it can be
used to protect goods. In addition, color packaging carton/boxes are economical and environmentally
friendly. The color packaging carton/box has flat surfaces to print on images and logos of products to
emphasize their brand value. Our enterprise customers would typically use it for food and beverage,
household chemical products, consumer electronic products, and personal care products.
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The eco-friendly paper bag makes use of recycled paper and kraft paper to form a bag. It is printed
using water-based ink and bonded by water-based glue, which are also environmentally friendly. It is
light and foldable to carry, and is recyclable. It is widely used for packaging of e-commerce goods,
take-out food, and supermarket goods. Our enterprise customers primarily print their logos and slogans
on the eco-friendly paper bag for marketing and promotion purposes.
Food packaging is made of food grade cardboard and kraft paper. Our food packaging is
manufactured in accordance with good manufacturing practice (GMP) standards, and complies with
various standards to ensure that it can safely come into direct contact with food. We primarily produce
food packaging into our enterprise customers’ desired shapes, including paper cups, paper bowls, paper
bags and paper boxes for various foods and beverages, snack foods and ice cream.
The table below sets forth a breakdown of our revenue generated from our paper packaging
business by type of paper packaging products:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Color Packaging Carton/Box 1,382,807 69.7 1,346,220 64.2 1,198,392 57.1
Eco-Friendly Paper Bag 203,308 10.3 325,787 15.6 387,593 18.5
Food Packaging 292,062 14.7 323,437 15.4 423,067 20.2
Others
(Note) 104,414 5.3 101,162 4.8 90,409 4.2
Total 1,982,591 100.0 2,096,606 100.0 2,099,461 100.0
Note: Others primarily consist of revenue generated from sales of materials and scrap paper.
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The table below sets forth a breakdown of our gross profit and gross profit margin generated from
our paper packaging business by type of paper packaging products:
For the year ended December 31,
2022 2023 2024
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 %
Color Packaging Carton/Box 164,365 11.9 210,389 15.6 175,938 14.7
Eco-Friendly Paper Bag 55,464 27.3 98,321 30.2 110,700 28.6
Food Packaging 28,443 9.7 44,681 13.8 50,291 11.9
Others
(Note) 52,255 50.0 39,765 39.3 38,252 42.3
Total 300,527 15.2 393,156 18.8 375,181 17.9
Note: Others primarily consist of gross profit generated from sales of materials and scrap paper.
The table below sets forth our production volume and average selling price by product types
during the Track Record Period:
For the year ended December 31,
2022 2023 2024
Total
production
volume
A verage
selling price
Total
production
volume
A verage
selling price
Total
production
volume
A verage
selling price
million sq.m. RMB/ sq.m. million sq.m. RMB/ sq.m. million sq.m. RMB/ sq.m.
Color Packaging Carton/Box 438.7 3.2 430.6 3.1 423.7 2.8
Eco-Friendly Paper Bag 137.0 1.5 172.0 1.9 271.7 1.4
Food Packaging 271.0 1.1 322.7 1.0 330.7 1.3
Total 846.7 2.2 925.3 2.2 1,026.1 2.0
Note:
(1) Average selling price was calculated dividing revenue from the relevant paper packaging product by total production
volume of the relevant paper packaging product.
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Our Business Process
Our paper packaging business process can be summarized as follows:
 Discussion with the customers on their
initial specifications
 Development of new products to meet
customers’ needs and requirements
 Finalization of the design after
customers’ review and confirmation
 Arrangements for the procurement of
raw materials and any specialized
equipment or molds
 Procurement of key raw materials
based on inventory level
 Procurement of key raw materials
based on the availability in the market
 Production scheduling
 Production of pre-printing materials
 Production of packaging products
Quality Control
 Setting up quality control standards
and requirements specific to each
product
 Testing samples of each batch of
product on their strength, design and
appearance based on the quality
control standards and requirements
 Packing of products
 Delivery of products to customers
 Issuance of invoice upon customers’
confirmation of delivery
 Assignation of sales representatives
 Regular on-site visits and periodic
customer satisfaction survey
 Management of customer feedback
regarding product quality, and
production or delivery delays
 Receipt of customer orders
 Assessment of customer orders
 Devising business proposals, including
product designs and specifications,
technical requirements, production
methods, production costs
Delivery of
Finished Products
After-Sales
Services
Assessment of
Customer Orders
Product Design, Process
Design and Technology
Planning
Procurement of
Key Raw Materials
Production
Scheduling and
Monitoring
Assessment of Customer Orders
Once a business opportunity with a new enterprise customer or an existing enterprise customer for
a new product is identified by us, we will discuss with the enterprise customer and assess the customer’s
order with respect to raw materials’ availability, product design and specifications, technical
requirements, and production method as well as production cost analysis. Based on the above
assessment results, we will devise a business proposal to our enterprise customer for confirmation. We
believe effective communication with our enterprise customers at the early stage of production allows
for a better understanding of our enterprise customers’ needs and a smooth production process.
Product Design, Process Design and Technology Planning
For a new product design, after discussing with the enterprise customer on his or her initial
specifications, we collaborate with the enterprise customer to develop new products that meet the
material, structure, function, and graphic design specifications proposed by the enterprise customer. For
the enterprise customer who do not have a specific specification, we would independently design and
provide prototype samples for the enterprise customer to select, and, based on the customer’s feedback,
modify the design until the enterprise customer is satisfied with it.
As part of developing product designs, we will also propose optimal process designs to our
enterprise customers. Process design for packaging products is of great importance and can affect
product attributes, such as esthetic value and hardness. If we do not possess certain processes needed to
cater to special or personalized enterprise customer needs, we provide technology planning services to
our enterprise customers, which also facilitates our production capabilities.
In addition to the overall design specifications, we also pay attention to enterprise customers’
special needs and requirements, such as marketing and ESG compliance.
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Once the product design and process design are finalized, we communicate with the enterprise
customer to finalize the order, and we will arrange for the procurement of raw materials and any
specialized machines, equipment or molds for production.
Monitoring of Raw Materials’ Availability and Procurement of Raw Materials
After selecting the key raw materials for production, we will determine if the appropriate raw
materials are available at our production plants or our warehouses. In the event that the required key raw
materials are not available for reasons such as unexpectedly strong demand for our products during peak
seasons, we will procure the required key raw materials.
We procure the key raw materials to (i) maintain a sufficient level for production need, which we
mainly determine based on the monthly procurement plans from our enterprise customers; and (ii)
minimize risks arising from substantial price fluctuations. To make sure the key raw materials are
consumed effectively and efficiently, we keep track on (i) their inventory level; (ii) the key raw
materials supply and consumptions in the preceding month; (iii) the prevailing price of the key raw
materials; and (iv) purchase orders from our enterprise customers.
The key raw materials are procured based on the requirements of our enterprise customers in terms
of density, color and physical strength. Our Group purchases the key raw materials from a few large and
well-established suppliers, mainly in Mainland China which are independent third parties.
For each year of the Track Record Period, the cost of raw materials represented approximately
77.9%, 77.9% and 76.1%, respectively, of our total cost of goods sold for our paper packaging business.
Currently, we source the key raw materials from a number of suppliers. We consider that our key raw
materials are readily available in the market, and we will not face a significant problem in sourcing
them.
The following table sets forth the key terms of our typical procurement agreements with our raw
material suppliers.
Product Specifications Pursuant to the agreements, the raw material supplier is
responsible for delivering raw materials to us according to our
specifications within the specific period set forth in the
agreements.
Pricing The price of each order is calculated based on weight and unit
price of raw materials.
Payment The payment for each order of paper raw materials is typically
due 30 days following the date of the order and is payable
through wire transfer or by promissory note.
For other raw materials, the payment is generally due 60 days
following the date of the order and is payable through wire
transfer.
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Liability If we are late on any payments, we are typically obliged to pay
0.05% to 0.3% of the unpaid amount per day as liquidated
damages to the raw material supplier. The raw material supplier
shall indemnify us for any damage arising from either (1) the
failure of the raw materials to comply with our specifications and
requirements, or (2) failure to deliver the raw materials on a
timely basis.
Term and Renewal The agreements typically have a fixed initial term of one year,
and is renewable upon expiration, subject to mutual consent.
Each party is entitled to terminate the agreements when the other
party breaches the agreements and fails to rectify such breach
within 30 calendar days.
Dispute Resolution The agreements are governed by the laws of the PRC and provide
for exclusive dispute resolution provisions, either in a PRC court
or in a designated arbitration institution.
Production Scheduling and Monitoring
We monitor and control the inventory levels of our raw materials and finished products to optimize
our operations and to keep our operation costs and risks at a relatively low level. Typically, we produce
products only when we receive a purchase order from an enterprise customer. We use ERP system for
scheduling and monitoring production for different enterprise customer orders with an aim to optimize
utilization of our production capacities so as to maximize our production efficiency and achieve cost
saving. The entire production process is monitored by our ERP system through which we obtain real
time information on raw paper consumption and inventory levels, production progress, finished
products’ warehouse turnovers, and delivery and logistics information, thereby ensuring accurate and
on-time delivery to our enterprise customers.
We manage our inventory of raw materials and finished products taking into consideration the
quantity of purchase orders that are made by our enterprise customers, as well as our production
schedules and the procurement cycle for raw materials. We adopt stringent procedures to monitor the
inventory levels of our key raw materials, work-in-progress and finished goods. We control our
inventory level by (i) keeping track of the inventory movements on a real-time basis, and (ii) usually
maintaining stock of key raw materials at a sufficient level for our use while our finished products will
not be stocked at individual plants for more than three days on average.
Quality Control
Our packaging and printing production facilities have passed professional certification
qualifications, such as ISO9000 quality management system, ISO14001 environmental system, and
BRCGS ETRS social responsibility certification.
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ISO9000 is a set of international standards outlining the criteria for a quality management system
(QMS). It focuses on enhancing enterprise customer satisfaction by ensuring that products and services
meet rigorous quality standards through a systematic approach to processes and continuous
improvement. ISO14001, on the other hand, pertains to environmental management systems (EMS). It
provides a framework for organizations to establish, implement, maintain, and improve effective
environmental performance. BRCGS Ethical Trade and Responsible Sourcing (ETRS) standard focuses
on social responsibility within supply chains. It addresses issues such as labor practices, human rights,
and ethical sourcing, providing a framework for companies to ensure fair and ethical treatment of
workers and responsible sourcing practices throughout their operations. Each of these standards plays a
crucial role in promoting excellence and responsibility within different facets of our business
operations.
To ensure that products are manufactured according to our enterprise customers’ requirements, we
will set specific quality control standards and requirements for each product according to their
specification. We will take samples of each batch of product and conduct testing on their strength,
design and appearance based on the quality control standards and requirements.
Delivery of Finished Products
Logistics management
The finished products will be stored in warehouses of the relevant production plant after passing
our quality control inspection and before delivery to our enterprise customers. The finished products
will be delivered to the locations designated by our enterprise customers (or as stipulated in the
purchase orders) primarily by third-party logistics companies. We will coordinate among different
customer orders and arrange for product delivery to our enterprise customers with an aim to maximize
finished products turnover and reduce transportation costs. On the day of delivery, we load the products
on to trucks provided by the logistics companies for delivery. Once delivery has been confirmed, we
will issue an invoice to our enterprise customer.
The following table sets forth the key terms of our typical cooperation agreements with third-party
logistics companies for our paper packaging business.
Scope of Services Third-party logistics companies are responsible for delivering
packaging products from our production facilities to our
enterprise customers or to other locations designated by us on
behalf of our enterprise customers.
Pricing The price of the transportation service is negotiated primarily
based on weight, distance, time, and vehicle capacity.
Payment Payment for the logistics services is typically due 30 days or 60
days following the date of confirmation of the service fee by both
parties and is payable through wire transfer.
Damages If the third-party logistics company is late on delivery, it is
typically obliged to pay us 10% of the delivery fee or RMB500
per day for each day the delivery is delayed as liquidated
damages. In addition, the logistics company is responsible for
any damages, including consequential damages suffered by us
arising from the delivery.
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Duration and Renewal The agreements typically have a fixed initial term of one year,
and is renewable upon expiration, subject to mutual consent.
Each party is generally entitled to terminate the agreements by (i)
mutual consent, (ii) advance notice with payment of liquidated
damages for early termination as set forth in the agreements, or
(iii) upon the other party’s failure to perform the agreements.
Dispute Resolution The agreements are governed by the laws of the PRC and each
party may bring suit in a PRC court with jurisdiction.
Warehouse Management
Our warehouses are primarily proximate to each of our production facilities to store our raw
materials and finished packaging products. Additionally, if our clients are located far from our existing
warehouses and production facilities, after considering the costs, we will lease warehouses near them to
facilitate transportation. For example, as of the Latest Practicable Date, we also leased one warehouse
in Huizhou, Guangdong Province as a transition center to store our paper packaging products for certain
of our major customers.
Purchase and After-Sales Services
Customer Service and Feedback
Over the years, we have built a large, stable enterprise customer base, consisting of domestically
and internationally recognized food and beverage, catering, and daily necessities manufacturers. To
maintain long-term relationships with our enterprise customers, we adopt a fully interactive and
comprehensive customer service approach.
We assign a group of sales representatives to serve each enterprise customer, ensuring seamless
interaction and communication with our enterprise customers. We actively engage in communication
with both new and existing enterprise customers to assess their needs. We provide customized product
designs catering to their required specifications. Following their confirmation of the proposed designs,
we proceed to produce the products for our enterprise customers. Throughout the entire production
process, we share real-time updates with our enterprise customers on production status. In cases where
an order changes or there is any unexpected delay, we will contact the enterprise customer immediately.
Upon completion of production, we arrange for logistics companies to deliver the products. We
provide our enterprise customers with updated delivery status, and facilitate communication between
them and the logistics companies when necessary. After delivery of the products, we also maintain
ongoing communication with our enterprise customers to ensure we receive timely feedback regarding
our products and service.
In addition, we arrange for regular on-site visits to enterprise customers’ headquarters or
production facilities and periodic customer satisfaction survey. We collected valuable feedback through
these two communication channels, which help us enhance our service standards and make
improvements to our business processes such as to simplify internal approval processes, and to
cooperate with more efficient logistics companies.
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Management of Customer Feedback
Our enterprise customers give feedback primarily on product quality, and production or delivery
delays.
If the customer feedback arises out of production or delivery delays, we will promptly contact the
enterprise customer to provide detailed explanations for the delay. If the delay causes any loss for the
enterprise customer, we will actively propose feasible resolutions, in accordance with our agreement
with the enterprise customer.
For feedback on product quality, our sales and marketing team and our quality control team will
work together to understand the feedback and re-test the quality of the product. If our product has
quality issues, we will work with the enterprise customer to determine a resolution, including monetary
compensation in accordance with our agreements, and discounts for future orders.
If the enterprise customer insists on returning the products and requests a refund, we will initiate
internal processes, arrange for the logistics companies to return the products to our production
facilities. We will take samples of the products that have been returned and perform further quality
testing, and our quality control team will determine whether the products are qualified be re-processed
into other products. If re-processing is feasible, the products will undergo re-processing and will be
stored in our warehouses for future sales. If the products are not proper for re-processing, they will be
disposed. See “− Our Product Return and Refund Policies.”
Our Production Process
Our production process is highly-automated. We use high speed equipment and machinery to
reduce our product time. The time needed for each phase of the production process varies is different for
each order, based on the type of product and materials used and complexity of designs.
The following flow chart provides an overview of the major steps involved in the production
process:
Pre-Printing Process
 Procurement of key raw materials
 Plate making
 Polyethylene (PE) coating
 Cutting
Printing
 Offset printing
 Sheet-fed printing
 Flexographic printing
 Web-fed flexography
Post-Printing Process
 Surface treatment
 Hot stamping
 Die cutting
 Window gluing
 Box gluing
 Cutting
 Bag shaping
 Surface gluing
 Handle/rope making and gluing
 Packaging and delivery
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Pre-printing process:
• We procure raw materials primarily from Mainland China paper manufacturers. The key raw
materials in our production process are raw paper, including black liner board, white liner
board, and food grade cardboard. We also import a small amount of key raw materials from
overseas. We perform procurement of the key raw materials and store them in our
warehouses at each of our production facilities.
• After the raw paper is procured, it must be pre-processed before any printing. We deploy
multiple techniques to pre-process the raw paper, in accordance with the specifications of our
products, including polyethylene (PE) coating, and cutting. In addition to pre-processing, we
also arrange for the production of plates which will be used during the printing process.
Printing:
We primarily apply four printing methods as part of the production of our packaging products.
• Offset printing: offset printing transfers an inked image to the flat printing surface of
individual paper sheets.
• Sheet-fed printing: in addition to transferring an image to single, individual printed surfaces,
sheet-fed printing enhances the flatness of the printed surface by pressing the surface with
the printer machine.
• Flexo printing: flexo printing utilizes a flexible relief plate to print on surfaces with ink and
water.
• Web-fed flexography: web-fed flexography is a kind of flexographic printing method.
Similar to sheet-fed printing, web-fed flexography involves printing by pressing the printing
surface except that the printing surface is a continuous roll of paper.
Post-printing process:
We further process the printed matter generally by gluing, cutting, and assembling the printed
matter into the desired product. The specific techniques involved in this process for various products
includes surface treatment, hot stamping, die cutting, window gluing, box gluing, cutting, bag shaping,
surface gluing, handle making and gluing, and rope making and gluing. Once the products are finished,
we pack and deliver them to our enterprise customers primarily through logistics service providers.
• Surface treatment: surface treatment is the process of glazing, coating, and calendering the
surface of printed matter to improve the wear resistance, gloss, and decoration of the surface
of the printed matter. This technique is used to produce color packaging cartons/boxes.
• Hot stamping: hot stamping is the process of transferring the hot printing materials to paper
and board by stamping on the surfaces. This technique is applied to the production of color
packaging cartons and eco-friendly paper bags.
• Die cutting: in this process, the printed matter is cut into the desired irregular shape by the
die cutter and the line cutter. The two cutters are combined in the same plate of the die
cutting machine, and they perform die cutting and pressing at the same time. Die cutting is
used in the production of color packaging cartons/boxes and food packaging.
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• Window gluing: if the printed matter has a window feature, after the process of die cutting, a
thin film will be glued onto the window of the printed matter.
• Box gluing: to produce color packaging cartons/boxes, after the process of die cutting, the
printed paper and board will be glued together.
• Cutting: the printed matter is cut into the desired regular size and shape. This technique is
used to produce eco-friendly paper bags, and food packaging.
• Bag shaping: to produce food packaging, the printed materials are glued, sewed, or
compounded into the shape of bags.
• Surface gluing: in this process, the corrugated paper is glued with surface paper for further
processing.
• Handle/rope making and gluing: handles or ropes are made in this process and then glued
onto the printed matter.
Our Production Facilities
Our production activities were carried out at our production facilities at 10 different locations as
of December 31, 2024. The map below shows the geographical coverage of our existing production
facilities in Mainland China:
Hohhot, Inner MMonMongoMon li tonomous Regiona Autonotono
QiQingn tongxiiiaa,a,a, NNNiiingxi ion Regionna Hui Autonomous Rs Region
Xianyang,
HHHHuuangganguanggang i ProvPrr ince
nhui Province
Shandong Province
LLLLL fff ngangngff , Hebei Province
Luanuanzhouuan , Hebebebeiii Province
XXXiiaaamen, Fuuuujjjjjiana Province
F or illustrative purpose only, the map (Map Review Number ( ᄲྡ໮ ): GS(2019)1686 ໮) is presented to demonstrate our
production facilities in Mainland China.
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Our key production processes are highly automated and can be used to produce different kinds of
packaging without the need to significantly modify the existing production facilities and equipment.
Therefore, we adjust our production to meet market demand and our sales target in response to market
demand. We import key equipment used in our production processes from developed countries, as we
believe the use of such advanced equipment provides better quality control and assurance and increases
our production efficiency. Our production facilities are fully equipped with advanced automated
equipment such as offset printer, corrugated paper production line, flexography printer, die cutting
stacker and logistics equipment. Our production facilities are well recognized for deploying
eco-friendly technologies in the production process. For example, in May 2021, our production facility
in Hohhot was granted with the title “green factory” by the Department of Industry and Information
Technology of Inner Mongolia Autonomous Region, by virtue of its eco-friendly production, and in
April 2023, our products were certified as eco-friendly products by the aforementioned government
authority. Moreover, our paper packaging product was also recognized by the Ministry of Industry and
Information Technology Office of the PRC as one of the 2022 green design products, considering
various metrics including the product’s recycling rate and efficiency, and energy consumption. Our
major production equipment is generally aged from zero to 10 years. We carry out maintenance and
repair work in compliance with applicable GMP requirements and we will replace or upgrade our
production equipment when necessary to enhance productivity. We believe our production facilities and
equipment are in good working condition.
The following table sets forth a summary of our production facility as of the Latest Practicable
Date.
No. Location Ownership
Approximate
GFA of
Production
Facility and
Warehouse
(sq.m.)
1 Xiamen, Fujian Province Self-owned 37,000
Leased 11,000
2 Qingtongxia, Ningxia Hui Autonomous Region Self-owned 46,000
3 Langfang, Hebei Province Self-owned 57,000
4 Luanzhou, Hebei Province Leased 25,000
5 Hohhot, Inner Mongolia Autonomous Region Self-owned 84,000
6 Jinan, Shandong Province Self-owned 30,000
7 Bengbu, Anhui Province Self-owned 45,000
8 Huanggang, Hubei Province Leased 16,000
9 Xiaogan, Hubei Province Leased 36,000
10 Xianyang, Shaanxi Province Leased 20,000
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For each year of the Track Record Period, our designed production capacity was 1,340.4 million
sq.m., 1,660.2 million sq.m. and 1,826.2 million sq.m., respectively. During the same periods, our
utilization rate was 63.2%, 55.7% and 56.2%, respectively.
Our Machinery and Equipment
Our major machinery and equipment were primarily purchased from Germany, Japan and
Mainland China. We have installed advanced fully-automatic in-line printer and robots arms for
auto-packing in most of our production plants. We believe that by using technologically advanced
machinery and equipment, we can not only improve our production efficiency, cut down manpower
costs, but also enhance our product quality. Our capital expenditures during the Track Record Period
were primarily in connection with additions of property, plant and equipment, land use rights and other
intangible assets. For each year of the Track Record Period, our capital expenditures were RMB175.3
million, RMB228.9 million and RMB124.6 million, respectively.
We believe that all major machinery and equipment that are being used by our Group are
functioning properly. As of December 31, 2024, we had approximately 70 maintenance personnel and
technicians responsible for our routine inspections and maintenance of our production machinery and
equipment to maintain their optimum performance. We adopt a preventive maintenance system, and all
our production plants are required to follow standardized inspection and maintenance procedures, which
require them to inspect the cleanliness and lubrication level of the machinery and equipment on a
monthly basis. Our machines and equipment are generally modularized, enabling our maintenance
personnel and technicians to efficiently repair them by replacing components instead of conducting
integral repair.
In addition, information on repair and maintenance are gathered, stored, monitored and analyzed
by an online mini program for information sharing, which enables us to enhance production efficiency
and avoid unexpected mechanical failure. During the Track Record Period, we did not experience any
material mechanical failures.
Our Technology Capabilities
We invest heavily in research and development in our paper packaging business. As of March 31,
2025, we owned 362 patents and 17 software copyrights, in relation to the designing and manufacturing
of packaging for our paper packaging business. For each year of the Track Record Period, our research
and development expenses for our paper packaging business recorded RMB104.8 million, RMB98.9
million and RMB84.9 million, respectively.
We believe that R&D is crucial for maintaining and further enhancing the competitiveness of our
paper packaging business. Driven by our core of innovation, we have been strengthening our paper
packaging business through our professional development team. We established a R&D innovation
center for our paper packaging business, the members of which are primarily responsible for the
research and development of packaging printing techniques, materials, technologies and products, and
automation technology of printing equipment. As of December 31, 2024, we had approximately 360
research and development personnel in our paper packaging business.
With the coordination of our packaging professional development team, we participate in the
development of industry standards, including technical requirements for evaluating carbon emission
reductions for packaging products, assessment requirements for production process of corrugated boxes,
and assessment requirements for green-design packaging cartons.
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Through our cooperation with enterprise customers, we continue to develop new and innovative
paper packaging products to solve specific packaging problems. The following table sets forth details of
some of our select R&D achievements in innovative proprietary designs in our paper packaging
business.
R&D Achievements Description Benefits from this Project
Dual-Coated Paper Cup We proposed a cup production
process whereby the order of
the traditional coating process
is reversed. By printing the
image before coating the cup,
we efficiently affix the image
on the cup and avoid the
transfer of ink from the
printed part to the unprinted
part during the production
process.
The dual-coated paper cup
improves the food safety by
efficiently fixing the printed
image to avoid its direct
contact with food and
beverage. It also saves raw
materials such as paper and
ink, reducing production and
waste processing costs, and
decreasing the carbon
footprint involved in product.
Packaging for Fried
Chicken with a Window
Structure
We added window features on
fried chicken packaging
boxes, which are the same
size as the sauce boxes, to
hold the sauce box. The
window features also improve
the esthetic value of the fried
chicken boxes.
The packaging for fried chicken
with a window structure
avoids the direct contact of
the sauce box with the food,
which improves food safety,
and eliminates the need for
extra packaging for sauce
boxes, reducing the packaging
costs for our enterprise
customers.
Following the long-term trend of national policies promoting a green economy and low-carbon
transition, we actively develop and apply environmentally-friendly materials and techniques to
manufacture our products. We seek to pursue excellence in environmental protection, and continuously
strengthen our R&D efforts in green packaging. We proactively integrate ESG principles into the whole
production process of our products, from product design, process design, production to waste disposal.
As of March 31, 2025, we owned 32 patents relating to green packaging materials and products.
Marketing and Promotion
Our sales and marketing staff are mainly responsible for promoting our services, communicating
with our enterprise customers, and handling their inquiries and orders. Substantially all of our sales and
marketing staff are located in Mainland China. Our promotional efforts are focused on maintaining and
growing the relationships with our existing enterprise customers. We seek to cater to the comprehensive
paper packaging needs of our enterprise customers. Therefore, as our existing enterprise customers have
increasing packaging needs as their businesses grow, we prioritize our ability to serve these growing
needs.
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From time to time, our sales and marketing staff will provide the latest information about our
services, sample designs, shipping schedules and fee quotations to our enterprise customers for their
selection based on their needs. When contacted by our enterprise customers, our sales and marketing
staff will discuss with them about their needs, such as designs, nature of packaging, budget, pick-up
location, destination, delivery time, and any requirement for additional services and confirm with them
the details of the shipping plan and the fees.
We also engage in a variety of programs and marketing activities to promote our brand and our
services. Our offline marketing activities include the attending of professional packaging trade fairs and
holding meetings with packaging trade associations to grasp the latest market trend within the
packaging industry. We will also hold meetings to discuss, among other things, our marketing strategies
and relationship maintenance with our enterprise customers.
Pricing
In line with industry norm, we generally adopt a cost-plus approach when determining the price
we charge our enterprise customers and take into account factors including: (i) the volume of packaging
sold; (ii) cost of services; (iii) seasonality; and (iv) reasonable profit margin.
OUR OTHER BUSINESSES
During the Track Record Period, we also recorded revenue primarily from (1) our precision
marketing and advertising business, and (2) our incidental trading business. For each year of the Track
Record Period, revenue from our other businesses amounted to RMB286.7 million, RMB341.4 million
and RMB63.9 million, representing 5.3%, 5.1% and 1.1% of our total revenue, respectively.
Leveraging our experience in cross-border social e-commerce, during the Track Record Period, we
also offered precision marketing and advertising services to SMEs in Mainland China, helping them
increase brand awareness and engaging potential customers through creative advertising strategies,
search engine optimization, content creation and multi-channel campaigns we provided. Under such
business model, we directly cooperated with certain major social media platforms in Mainland China
and we were authorized by such platforms in facilitating advertisement placements by third parties. The
customers we served under our precision marketing and advertisements business primarily included
advertisers and advertisement agencies (who place advertisements on behalf of their advertiser
customers while do not have authorization by social media platforms). The customers paid us through
prepayments or monthly settlements and we in turn topped up the advertisement credits under their
accounts for them to place advertisements. During the Track Record Period, revenue generated from our
precision marketing and advertisements business contributed to a very small portion of our total
revenue, and we had ceased the operation of our precision marketing and advertising business in March
2024, owing to our focus on our cross-border social e-commerce business and paper packaging
business.
In line with our wide-array product strategy, we have been discovering popular products and
expanding our product portfolio. We observed opportunities from the liquor industry and attempted to
acquire a liquor production company in 2021 but terminated such plan due to macroeconomic
conditions in the same year, during the process of which we procured a certain amount of liquor which
became our inventories. During the Track Record Period, we sold our liquor inventories through online
and offline channels in Mainland China as our incidental trading business.
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OUR PRODUCT RETURN AND REFUND POLICIES
We have adopted standardized procedures for after-sale services and handling product return and
refund requests from our customers. During the Track Record Period, we had not experienced any
material product return or refund requested from our customers and had not suffered any material loss
or damages caused by product return or refund. For each year of the Track Record Period, the total
amount subject to product return and refund accounted for less than 1.5% of our total revenue.
For our cross-border social e-commerce business, we will communicate with customers to address
their concerns if certain general after-sales issues arise, such as inconsistency between the product and
the customer’s expectation. If the consumer asks for an exchange on the ground that we shipped the
incorrect product or if there is a defect in the shipped product, after confirmation, we will directly send
a replacement without requiring the customer to return the received product. If our customers request to
return the product and provide them with a refund, and do not accept alternative solutions such as
product exchanges, we will accept such requests. Once the product return or refund request is accepted,
we will request the relevant customer to send the product to our designated site. If the products are
returned by our customers due to quality issue, we will negotiate with the relevant suppliers to return
the products or request for refund.
For our paper packaging business, if our product has quality issues, we will work with the
customer to reach feasible resolution, including monetary compensation in accordance with our
agreements, and discounts for future orders. If the customer insists on returning the products and
requests a refund, we will initiate internal processes, arrange for the logistics companies to return the
products to our production facilities. We will also take samples of the products that have been returned
and perform further quality testing, and our quality control team will determine whether the products
are qualified be re-processed into other products. If re-processing is feasible, the products will undergo
re-processing and will be stored in our warehouses for future sales. If the products are not proper for
re-processing, they will be disposed.
OUR CUSTOMERS
Major Customers
Our customers primarily consist of enterprise customers which are FMCG companies under our
paper packaging business and individual consumers under our cross-border social e-commerce business.
Due to the nature of our cross-border social e-commerce business, the customer base for this business is
composed of a diverse group of individual consumers who purchase our products, each of whom
contributed to a very small portion of revenue as compared to our total revenue during the Track Record
Period.
For each year of the Track Record Period, sales from our five largest customers accounted for
28.7%, 24.3% and 27.2% of our total revenue, and sales from our largest customer, Customer Group A,
accounted for 23.8%, 18.6% and 18.8% of our total revenue for each year of the Track Record Period.
For each year of the Track Record Period, sales from Customer Group A represented a sizable amount of
our revenue, as we have maintained close cooperation with Customer Group A since 2006, whereby both
parties are committed to establishing a stable supply relationship, which is an industry norm in the
paper packaging industry in Mainland China; and Customer Group A is a leading dairy products
producer in Mainland China, such that as long as they maintain a significant sales volume, our sales to
them would continue to be sizeable, as our sales of paper packaging products were positively correlated
with the sales volume of dairy products sold by Customer Group A for which our paper packaging is
used.
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To the best of our knowledge, all of our five largest customers for each year of the Track Record
Period are independent third parties. None of our Directors, their respective associates or any
shareholder who, to the knowledge of our Directors, owned more than 5% of our issued share capital as
of the Latest Practicable Date, has any interest in any of our five largest customers for each year of the
Track Record Period.
The following table sets forth certain information of our five largest customers, which include
their affiliates as applicable, for each year of the Track Record Period:
Customer
Major products/
services sold by us
Business
relationship
since
Credit
terms
Settlement
information
Amount of
sales
As a
percentage
of our total
revenue
RMB’000 %
For the year ended December 31, 2024
Customer Group A
(1) Color Packaging
Carton/Box
2006 25-60 days Wire transfer
and
promissory
note
1,037,386.3 18.8
Customer B
(2) Eco-Friendly Paper Bag 2018 15 days Wire transfer 209,043.0 3.8
Customer Group C (3) Eco-Friendly Paper Bag,
Food Packaging
2020 30-60 days Wire transfer 88,064.7 1.6
Customer Group D (4) Eco-Friendly Paper Bag,
Food Packaging, Color
Packaging Carton/Box
2019 15 days Wire transfer 85,735.2 1.6
Customer Group E
(5) Eco-Friendly Paper Bag 2019 60 days Wire transfer 81,316.7 1.4
Total 1,501,545.9 27.2
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Customer
Major products/
services sold by us
Business
relationship
since
Credit
terms
Settlement
information
Amount of
sales
As a
percentage
of our total
revenue
RMB’000 %
For the year ended December 31, 2023
Customer Group A Color Packaging
Carton/Box
2006 25-90 days Wire transfer
and
promissory
note
1,248,397.1 18.6
Customer B Eco-Friendly Paper Bag 2018 15-30 days Wire transfer 142,357.0 2.1
Customer Group E Eco-Friendly Paper Bag 2019 60 days Wire transfer 87,411.2 1.3
Customer Group C Eco-Friendly Paper Bag,
Food Packaging
2020 90 days Wire transfer 76,083.7 1.1
Customer Group F
(6) Eco-Friendly Paper Bag,
Food Packaging
2020 30 days Wire transfer 69,495.7 1.0
Total 1,623,744.7 24.3
For the year ended December 31, 2022
Customer Group A Color Packaging
Carton/Box, Food
Packaging
2006 25-90 days Wire transfer
and
promissory
note
1,277,302.4 23.8
Customer B Eco-Friendly Paper Bag 2018 15-30 days Wire transfer 85,777.4 1.6
Customer Group F Eco-Friendly Paper Bag,
Food Packaging
2020 30 days Wire transfer 72,897.3 1.3
Customer Group C Eco-Friendly Paper Bag,
Food Packaging
2020 30 days Wire transfer 65,243.2 1.2
Customer Group G
(7) Color Packaging
Carton/Box, Food
Packaging
2013 15 days Wire transfer 43,814.2 0.8
Total 1,545,034.5 28.7
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Notes:
(1) Customer Group A is a leading Chinese dairy products producer headquartered in Hohhot, Inner Mongolia
Autonomous Region, China, listed on Shanghai Stock Exchange in 1996, along with its affiliates.
(2) Customer B is a Chinese coffee company and coffeehouse chain. It was founded in 2017.
(3) Customer Group C is the primary franchisee of a multinational fast-food chain and the shares of such multinational
fast-food chain are listed on the New Y ork Stock Exchange.
(4) Customer Group D is a restaurant company in Mainland China with the shares of one of its affiliates listed on the
Stock Exchange and the New Y ork Stock Exchange.
(5) Customer Group E is one of Australia’s largest supermarkets and grocery chain stores, listed on the Australian
Securities Exchange in 1993, along with its affiliate.
(6) Customer Group F is a fast-food chain in Mainland China which focuses on fried chicken hamburgers, quoted on the
National Equities Exchange and Quotations in 2016, along with its affiliates.
(7) Customer Group G is a food manufacture group, primarily engaging in the manufacturing and trading of snack foods
and beverages, with one of its affiliates listed on the Stock Exchange in 2008.
SUPPLIERS AND SUPPLY CHAIN MANAGEMENT
Major Suppliers
Our major suppliers for each year during the Track Record Period include product suppliers,
digital marketing services providers, social media platforms, logistics companies, payment service
suppliers and raw paper suppliers. For each year of the Track Record Period, purchases from our five
largest suppliers accounted for 34.6%, 39.6% and 38.1% of our total purchases, and purchases from our
largest supplier accounted for 14.5%, 14.5% and 13.8% of our total purchases. During the Track Record
Period, our top five suppliers were primarily digital marketing service providers. We primarily place our
advertisements on social media platforms primarily through contracting with digital marketing service
providers. This practice is in line with industry norms, according to CIC.
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The following table sets out the details of our five largest suppliers, which include their affiliates
as applicable, for each year during the Track Record Period:
Supplier
Major
products/services
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases
RMB’000 %
For the year ended December 31, 2024
Supplier Group A
(1) Digital marketing 2018 30 days Wire transfer 643,551.8 13.8
Supplier Group B (2) Digital marketing 2017 30 days Wire transfer 461,194.2 9.9
Supplier C (3) Digital marketing 2023 45 days Wire transfer 329,459.1 7.1
Supplier Group D (4) Raw paper 2007 15-30 days Promissory note 236,498.5 5.1
Supplier Group E (5) Logistics 2022 7 days Wire transfer 101,033.0 2.2
Total 1,771,736.6 38.1
For the year ended December 31, 2023
Supplier Group A Digital marketing 2018 30 days Wire transfer 811,121.5 14.5
Supplier Group B Digital marketing 2017 30 days Wire transfer 538,741.4 9.6
Supplier C Digital marketing 2023 45 days Wire transfer 313,015.2 5.6
Supplier Group D Raw paper 2007 15-30 days Wire transfer 284,806.6 5.1
Supplier F
(6) Digital marketing 2021 Not applicable (8) Wire transfer 275,317.8 4.0
Total 2,223,002.5 39.6
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Supplier
Major
products/services
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases
RMB’000 %
For the year ended December 31, 2022
Supplier Group A Digital marketing 2018 30 days Wire transfer 644,435.7 14.5
Supplier Group D Raw paper 2007 15-30 days Wire transfer and
promissory note
334,448.0 7.5
Supplier G
(7) Digital marketing 2020 30 days Wire transfer 227,735.8 5.1
Supplier Group B Digital marketing 2017 30 days Wire transfer 215,410.4 4.8
Supplier Group E Logistics 2022 7 days Wire transfer 120,986.9 2.7
Total 1,543,016.8 34.6
Notes:
(1) Supplier Group A is a Chinese digital marketing service provider group established in 1996 with one of its affiliate
listed on the SZSE in 2010.
(2) Supplier Group B is a Chinese digital marketing service provider group focusing on providing customized marketing
planning to cross-border. It was established in 2003 and its headquarters is located in Zhengzhou, Henan Province,
China.
(3) Supplier C is a leading popular social media platform. It was established in 2017 and is based in both Singapore and
the U.S. and provides marketing service to companies.
(4) Supplier Group D is a leading Chinese paper manufacturing group listed on the Stock Exchange in 2006, and
headquartered in Dongguan, Guangdong Province, China. It was established in 1995.
(5) Supplier Group E is a cross-border logistics service provider based in Hong Kong SAR. It was founded in 2019.
(6) Supplier F is a digital marketing service provider in the Mainland China. It was founded in Xiamen, Fujian
Province.
(7) Supplier G is a Chinese digital marketing service provider which provides one-stop marketing service to Chinese
companies looking to sell their products overseas. It was established in 2006 and is headquartered in Hangzhou,
Zhejiang Province, China.
(8) According to the agreements between Supplier F and us, we make prepayments to Supplier F and there is no
arrangement regarding credit terms.
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The following table sets out the details of our five largest suppliers, which include their affiliates
as applicable, for our cross-border social e-commerce business for each year during the Track Record
Period:Supplier
Major
products/services
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases of
cross-border
social
e-commerce
business
RMB’000 %
For the year ended December 31, 2024
Supplier Group A Digital marketing 2018 30 days Wire transfer 643,551.8 22.0
Supplier Group B Digital marketing 2017 30 days Wire transfer 461,194.2 15.8
Supplier C Digital marketing 2023 45 days Wire transfer 329,459.1 11.3
Supplier Group E Logistics 2022 7 days Wire transfer 101,033.0 3.5
Supplier Group H
(1) Digital marketing 2021 30 days Wire transfer 90,731.1 3.1
Total 1,625,969.2 55.7
For the year ended December 31, 2023
Supplier Group A Digital Marketing 2018 30 days Wire transfer 811,121.5 22.4
Supplier Group B Digital Marketing 2017 30 days Wire transfer 538,741.4 14.9
Supplier C Digital Marketing 2023 45 days Wire transfer 313,015.2 8.6
Supplier G Digital Marketing 2020 30 days Wire transfer 193,425.2 5.3
Supplier Group E Logistics 2022 7 days Wire transfer 123,881.7 3.4
Total 1,980,185.0 54.6
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Supplier
Major
products/services
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases of
cross-border
social
e-commerce
business
RMB’000 %
For the year ended December 31, 2022
Supplier Group A Digital Marketing 2018 30 days Wire transfer 644,435.7 24.7
Supplier G Digital Marketing 2020 30 days Wire transfer 227,735.8 8.7
Supplier Group B Digital Marketing 2017 30 days Wire transfer 215,410.4 8.3
Supplier Group E Logistics 2022 7 days Wire transfer 120,986.9 4.6
Supplier I
(2) Logistics 2019 Monthly settlement Wire transfer 85,169.9 3.3
Total 1,293,738.7 49.5
Notes:
(1) Supplier Group H is a digital media SaaS management service provider headquartered in Guangzhou, Guangdong
Province. It was established in 2018.
(2) Supplier I is a cross-border logistics service provider headquartered in Shenzhen, Guangdong Province. It was
established in 2019.
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The following table sets out the details of our five largest suppliers, which include their affiliates
as applicable, for our paper packaging business for each year during the Track Record Period:
Supplier
Major products
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases of
paper
packaging
business
RMB’000 %
For the year ended December 31, 2024
Supplier Group D Raw Paper 2007 15-30 days Promissory note 236,498.5 14.1
Supplier J
(1) Raw Paper 2009 Monthly settlement Wire transfer 89,218.5 5.3
Supplier K (2) Raw Paper 2019 30 days Wire transfer 60,375.3 3.6
Supplier L (3) Raw Paper 2018 30-45 days Wire transfer 52,431.8 3.1
Supplier M (4) Raw Paper 2022 Not applicable (9) Wire transfer 44,061.1 2.7
Total 482,585.2 28.8
For the year ended December 31, 2023
Supplier Group D Raw paper 2007 15-30 days Wire transfer 284,806.6 19.7
Supplier J Raw paper 2009 Monthly settlement Wire transfer and
promissory note
107,897.8 7.4
Supplier K Raw paper 2019 30 days Wire transfer 56,780.6 3.9
Supplier N
(5) Raw paper 2022 Not applicable (9) Wire transfer 41,755.0 2.9
Supplier O (6) Raw paper 2022 Not applicable (9) Wire transfer and
promissory note
33,503.2 2.3
Total 524,743.2 36.2
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Supplier
Major products
purchased by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As a
percentage
of our total
purchases of
paper
packaging
business
RMB’000 %
For the year ended December 31, 2022
Supplier Group D Raw paper 2007 15-30 days Wire transfer and
promissory note
334,448.0 23.0
Supplier J Raw paper 2009 7 days Wire transfer 99,686.6 6.9
Supplier P
(7) Raw paper 2020 30 days Wire transfer 59,892.6 4.1
Supplier K Raw paper 2019 30 days Wire transfer 59,334.7 4.1
Supplier Q
(8) Raw paper 2020 30 days Promissory note 35,743.7 2.5
Total 589,105.6 40.5
Notes:
(1) Supplier J is a Chinese paper manufacturer. It was established in 2000 and was headquartered in Weifang, Shandong
province, China.
(2) Supplier K is a Chinese paper manufacturer. It was established in 2014 and was headquartered in Beihai, Guangxi
Province, China.
(3) Supplier L is a Chinese paper manufacturer listed on Shanghai Stock Exchange in 2004. It was established in 1994.
(4) Supplier M is a Chinese paper manufacturer. It was established in 2009 and headquartered in Jinzhong, Shanxi
Province, China.
(5) Supplier N is a Chinese paper manufacturer. It was established in 2010 and headquartered in Zhangzhou, Fujian
Province, China.
(6) Supplier O is a Chinese paper manufacturer. It was established in 2015 and headquartered in Lanzhou, Gansu
Province, China.
(7) Supplier P is a Chinese paper manufacturer. It was established in 2006 and headquartered in Yinchuan, Ningxia Hui
Autonomous Region, China.
(8) Supplier Q is a Chinese paper manufacturer. It was established in 1992 and headquartered in Zhuhai, Guangdong
Province, China.
(9) According to the agreements between Supplier M and Supplier N and us, we make prepayments to Supplier M and
Supplier N and there is no arrangement regarding credit terms.
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Our Directors confirm that our five largest suppliers for each year during the Track Record Period
were independent third parties and none of our Directors, their respective close associates, or any
Shareholders (which to the best knowledge of our Directors owned more than 5% of our share capital as
at the Latest Practicable Date) had any interest, directly or indirectly, in any of our five largest suppliers
for each year during the Track Record Period. The Directors confirm that during the Track Record
Period and up to the Latest Practicable Date, we had not experienced any material interruptions,
disputes, or delays in relation to the supply of suppliers.
SEASONALITY
For our cross-border social e-commerce business, we typically carry out more sales and marketing
activities before and during overseas holiday seasons. As a result, we may maintain higher level of
inventories for our cross-border social e-commerce business to satisfy market demand before and during
holiday seasons and relevant shopping events than at other times in the year. On the other hand, our
businesses are vulnerable to extreme or unusual weather conditions. For example, the extended period
of warm weather during the winter season could render a portion of our apparel products incompatible
with such unseasonable conditions, and thus may affect our sales and inventories.
For our paper packaging business, we typically see greater demand for packaging before and
during Chinese holiday seasons. We typically engage with our enterprise customers well in advance of
holiday seasons to design packaging tailored to holiday seasons. As a result, we may maintain higher
level of inventories for our paper packaging business to satisfy market demand before and during
holiday seasons.
The above occurrences do not result in material seasonal fluctuations in our financial condition
and results of operations.
COMPETITION
Cross-Border Social E-Commerce Business
We operate in the B2C outbound social media e-commerce market strategically focusing on the
Asian market. According to CIC, the size of China’s B2C outbound e-commerce market was
approximately US$29.1 billion in terms of revenue generated in Asia in 2024 through social media
e-commerce business. The total market share of the top five participants in this market was
approximately 6.5% based on revenue generated through social media e-commerce business in Asia in
2024.
According to CIC, we ranked second among China’s B2C outbound e-commerce players based on
revenue generated through social media e-commerce business in Asia in 2024, with a market share of
1.3%. We primarily compete based on a number of factors in this market: (i) digitalization and AI
application capability; (ii) precision targeting capability; (iii) product selection capability; (iv)
localization capability; (v) multi-platform management capability; (vi) supply chain management
capability. We believe we are well positioned to capitalize on the future industry growth, leveraging our
leading market position and extensive market knowledge.
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Paper Packaging Business
We operate in the FMCG paper consumer packaging market in Mainland China. The market size of
FMCG paper consumer packaging market in Mainland China in 2024 was approximately RMB170.3
billion in terms of revenue. The total market share of the top five participants in China’s FMCG paper
consumer packaging industry was approximately 4.5% in 2024. This signifies an upward trend in market
concentration.
According to CIC, in 2024, we ranked first among FMCG paper consumer packaging companies in
Mainland China, in terms of revenue, and our market share of FMCG paper consumer packaging market
in Mainland China was 1.2% in 2024. We primarily compete based on a number of factors in this
market: (i) one-stop service capability; (ii) top-tier client coverage; (iii) process design and technology
planning capability; (iv) adaptability to the policy environment and emphasis on ESG; (v) technology
capability. We believe we can compete effectively by virtue of our advanced technologies, rich market
experience and long-term relationship with leading FMCG enterprises.
A W ARDS AND RECOGNITION
As of the Latest Practicable Date, we had received a number of recognitions for our technologies,
products and services. In addition to those awards and recognitions listed in “History and Corporate
Structure – Business Milestones”, we also received the key awards and recognitions are set out below.
Y ear of
Award Award
Awarding
Organization Related Business
2024 Top 50 Overseas
Service Providers for
Chinese Corporates
Cailian Press and
China Overseas
Development
Association
Cross-border social
e-commerce business
2023 Digital Economy
Enterprise with the
Most Investment
V alue of the Y ear
Cailian Press Cross-border social
e-commerce business
2022 Digital Enterprise with
the Most Investment
V alue of the Y ear
Cailian Press Cross-border social
e-commerce business
2022 Top 100 Paper
Packaging
Companies (ranked
fifth) in China
China Packaging
Federation
Paper packaging
business
BUSINESS
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Y ear of
Award Award
Awarding
Organization Related Business
2022 Excellent Cross-Border
E-Commerce
Technology Service
Provider
Shenzhen Cross-Border
E-Commerce
Association
Cross-border social
e-commerce business
2021 National-Level
Specialized, Special
and New Little Giant
Enterprise
The Ministry of
Industry and
Information
Technology
Our Group
INTELLECTUAL PROPERTY RIGHTS
Intellectual property rights are important to our business. We develop and use a number of
proprietary trademarks, patents, work copyrights and software copyrights during the conduct of our
business. As of the Latest Practicable Date, we had a variety of registered trademarks, trademark
applications, registered patents, patent applications and software copyrights in Mainland China to
protect our intellectual properties. See “Statutory and General Information – B. Further Information
about Our Business – 2. Intellectual Property Rights of Our Group” in Appendix VI to this Prospectus
for further details of our material intellectual property rights.
In order to protect our intellectual property rights, we generally require our employees to enter
into confidentiality agreements. These agreements typically provide that all relevant intellectual
properties developed by our employees during the course of their employment with us become our
intellectual properties. Our employees are contractually required to refrain from disclosing confidential
information to third parties unless authorized in writing by our Company.
During the Track Record Period and up to the Latest Practicable Date, none of our employees
breached the confidentiality obligations under their employment contracts in a material respect; we
were not subject to, nor were we party to, any intellectual property rights infringement claims or
litigations; and we were not aware of any material infringement of our intellectual property rights that
had or could have a material adverse effect on our business. We had complied with all applicable
intellectual property laws and regulations in all material respects during the Track Record Period and up
to the Latest Practicable Date. In addition, during the Track Record Period and up to the Latest
Practicable Date, we had not been the subject of any adverse finding in an investigation or audit by any
governmental authorities in respect of the infringement of any intellectual property of third parties or
sales of counterfeit pharmaceutical products that had a material adverse effect on our business.
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PROPERTIES
We are headquartered in Xiamen, Fujian Province, China. As of the Latest Practicable Date, in
Mainland China, we owned 23 properties with a GFA of approximately 300 thousand sq.m., which were
mainly used for packaging production. In addition, as of the Latest Practicable Date, we had entered
into 40 valid lease and sublease agreements of properties with a GFA of over 139 thousand sq.m., for
packaging production, office use, or research. These lease and sublease agreements had standard terms,
including payment of rent, payment of security deposit, maintenance and repairment, and early
termination upon advance notice and payment of liquidated damages.
As of the Latest Practicable Date, with respect to 9 of our leased properties in Mainland China, the
lessors of such properties had still not provided us valid title certificates, or relevant proofs evidencing
the legality of the construction of the leased properties, despite the proactive requests we previously
made. In addition, as of the Latest Practicable Date, 37 lease agreements of our leased properties had
not been registered and filed with the competent PRC government authorities as required by applicable
PRC laws and regulations. We believe that the defects in leased properties described above will not,
individually or in the aggregate, materially affect our business and results of operations, on the grounds
that (a) we maintain a pool of site candidates for our leased properties, and believe we would be able to
relocate to a different site relatively easily within a short period of time and without incurring
substantial additional costs should we be required to do so; and (b) for the non-registration of leases, (i)
we were advised by our PRC Legal Advisor that failure of registration does not in itself invalidate the
leases and the risk of governmental authorities imposing penalties on us with respect to these leased
properties is relatively low, and (ii) no penalty had been imposed on us for our failure to register and file
the relevant lease agreements during the Track Record Period and up to the Latest Practicable Date. We
will continue to liaise with our lessors to obtain relevant title certificates and lease registrations in the
future. We also highly treasure safety in our business operations and we endeavor to create and maintain
a safe environment in our production facilities and offices by implementing various internal control
measures to prevent accidents, such as fire hazard, including requiring mandatory inspections of
firefighting equipment and trainings on fire safety issues. As advised by our PRC Legal Adviser, we had
not encountered any material fire safety incidents, nor had we been subject to any administrative
penalties by competent regulatory authorities regarding fire safety issues during the Track Record
Period. We have also enhanced our internal control measures and procedures to prevent re-occurrence of
such non-compliance incidents. We will (i) continue to closely monitor the regulatory development
associated with lease registration and filing in Mainland China to ensure compliance with the relevant
laws and regulations; (ii) use reasonable efforts to seek assurances from competent authorities to
confirm that our future new properties chosen will be compliant with applicable laws and regulations;
and (iii) urge the lessors to complete the lease registration for our future new leased properties in
accordance with the applicable laws and regulations. See “Risk Factors – Risks Relating to Our
Business and Industry – There are legal defects regarding some of our leased properties.”
We believe our current facilities are sufficient to meet our near-term needs, and additional space
can be obtained on commercially reasonable terms to meet our future needs. We do not anticipate undue
difficulty in renewing our leases upon their expiration.
DATA COMPLIANCE AND DATA SECURITY
We place great emphasis on data security and personal information protection. We have strictly
implemented various internal policies and procedures to ensure the security of the data we collect,
process, and store during the course of our business.
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We employ a variety of technologies, including encryption, access authentication, log audits, and
security incident monitoring, to prevent and detect risks and vulnerabilities in data security. We
implement firewalls for our cloud-based systems to enhance network security. Regular data backup and
recovery tests are conducted to minimize the risk of data loss, and we have established data disaster
recovery procedures. Furthermore, we closely control and monitor employees’ access to our systems,
ensuring that access to data is limited based on necessity. We grant different levels of data access rights
to employees, which are determined based on their responsibilities. Moreover, we classify the data
stored in our systems according to applicable laws and regulations. We take additional technological
measures, such as encrypting relevant confidential personal information, to ensure the secure
processing, storage, transmission, and usage of data. We also have designated personnel responsible for
data security and personal information protection as part of our internal governance. We also provide
data security and information privacy trainings to relevant employees on a periodic basis to enhance
their data compliance awareness.
We have established the Data Lifecycle Security Management Policy (the “ Data Management
Policy ”), which outlined detailed requirements of data collection, transmission, processing, storage,
application, sharing, archiving, and destruction. We also conduct regular security audits and risk
assessments to ensure the effective implementation of the policy and the confidentiality, integrity, and
availability of data. In addition, we have established the Personal Information Protection Policy (the “ PI
Policy ”) to govern the entire life cycle of personal information we obtained during the provision of our
services. We only collect personal information that is relevant and not excessive for the intended
purpose. In accordance with the PI Policy, for direct personal information collection, we take the
initiative to notify the consumers of the intended purpose and ensure that we obtain valid consents. For
personal information collected through third parties, we constantly verify the data source and include
strict obligations for wrongful data collection in the agreements with third parties. We implemented a
classified and hierarchical storage management system, segregating data based on its type and level of
confidentiality. We have established specific data retention periods based on types of personal
information and ensures the deletion or anonymization of personal information upon the expiration of
data retention periods. To oversee our data protection process, we have established an information
department supervised by a cybersecurity officer.
We place advertisements utilizing the API connection between our Giikin system and the
advertising systems of social media platforms. See “Our Cross-Border Social E-Commerce Business –
Advertisement Placement” in this section for more details. To ensure compliance with applicable laws
and regulations and smooth networking in view of the Internet censorship imposed on certain social
media platforms, we purchased corporate virtual private network (VPN) services from an authorized
agent of a state-owned qualified telecommunication company in Mainland China, enabling our access to
and placing of advertisements on social media platforms which are accessible to our overseas
consumers. As advised by our PRC Legal Advisor, our advertisement placements on overseas social
media platforms are in compliance with applicable PRC laws and regulations, and such practice is also
in line with industry norms according to CIC. After our placements, targeted overseas consumers are
able to view the pop-up advertisements while browsing relevant social media platforms and will be
directed to our landing pages upon their click on the relevant link. See “Business – Our Cross-Border
Social E-Commerce Business – Our Business Process.” Our landing pages are generated from servers
located overseas. During the Track Record Period and up to the Latest Practicable Date, we were not
aware of any issue in accessing our landing pages displayed on social media platforms by overseas
consumers.
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In addition, we have established various policies, such as Data Backup Management Policy,
Classified and Hierarchical Management Policy for Data Assets, Management and Emergency Plan for
Cyber and Data Security Events, Information Security Management Procedures, and Protocol of Data
Security and Personal Information Protection, to ensure proper IT system maintenance, cyber-related
log management, data access control, data backup and recovery, IT device utilization, and data event
response mechanisms. In particular, for the information relating to overseas consumers of our
cross-border social e-commerce business, we have implemented various internal control policies in
place, including (i) collecting personal information to the minimum extent, with the lowest frequency
and the least amount of the collection of personal information, and with requisite consents; (ii)
leveraging the back up services provided by our cloud service providers to keep full back-ups on the
daily basis, with the designated storage amount and period pursuant to the materiality of the data; and
(iii) devising the tiered data management system that the critical and sensitive data, such as the
information relating to orders and logistics, shall be transmitted through encryption methods and be
prevented from illegal distribution, loss or damage during transmission.
Our internal operations do not involve any cross-border transmission of personal data of our
consumers, and we do not transfer consumer data or information to any third party except that we need
to provide necessary details of orders to third-party logistics service providers through encrypted
transmission for logistics distribution and parcel delivery. During the Track Record Period and up to the
Latest Practicable Date, we had not been subject to any material fines, administrative penalties, or other
sanctions by any relevant regulatory authorities in the PRC or any jurisdiction where we sell our
products in relation to violation of cybersecurity and data protection laws and regulations. During the
Track Record Period and up to the Latest Practicable Date, we had not encountered any material data
leakage or loss of user data in all jurisdictions where we have operations. As advised by our PRC Data
Legal Advisor, we are in compliance with all currently effective and applicable PRC laws and
regulations on data privacy and cybersecurity, as applicable, in all material respects during the Track
Record Period and up to the Latest Practicable Date. Moreover, as advised by our Overseas Legal
Advisors, we have complied with applicable laws and regulations on data privacy and cybersecurity in
the jurisdictions where we carry material overseas sales under our cross-border social e-commerce
business in all material respects during the Track Record Period and up to the Latest Practicable Date.
Data Compliance
Recently, regulators in Mainland China have been increasingly focusing on laws and regulations in
the areas of data compliance.
In particular, in recent years, privacy and data protection have become increasing regulatory
focuses of government authorities across the world. The PRC government has enacted a series of laws,
regulations and governmental policies for the protection of personal data, cybersecurity and data
security in the past few years. On December 28, 2021, the Cyberspace Administration of China (the
“CAC”) adopted the updated Cybersecurity Review Measures (), which came into
effect on February 15, 2022. The Cybersecurity Review Measures stipulates the mandatory requirement
of cybersecurity review for companies which hold more than one million users’ personal information
when applying for an overseas listing.
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Article 10 of the Critical Information Infrastructure Security Protection Regulations which came
into force on September 1, 2021 (the “ CII Regulations ”) provides that the protection authorities shall
arrange the identification of critical information infrastructures in each of the sectors or fields overseen
by such authority in accordance with the identification rules, promptly inform the operators of the
results of identification, and report such results to the public security authority of the State Council.
Article 16 of the Cybersecurity Review Measures provides that the cybersecurity review office can
initiate cybersecurity review if it considers that a network product or service or a data processing
activity will or may affect national security. See “Regulatory Overview – PRC Laws and Regulations –
Regulations on Internet Security” for details.
Our PRC Data Legal Advisor is of the view that the Cybersecurity Review Measures have not had
and will not have any material adverse impact on us on the basis that (i) on January 30, 2024, our PRC
Data Legal Advisor conducted a verbal consultation with the China Cybersecurity Review Certification
and Market Regulation Big Data Center (the “ V erbal Consultation ”), the department delegated by the
CAC to accept consultation and applications for cybersecurity review, and were informed that a listing
in Hong Kong SAR is not deemed as a listing abroad within the meaning of the Cybersecurity Review
Measures, therefore we are not required to apply for cybersecurity review according to Article 7 of the
Cybersecurity Review Measures; (ii) as of the Latest Practicable Date, we had not received any
notification or other documentation from any government authority that identifies or may identify us as
a CIIO and hence, pursuant to Article 10 of the Critical Information Infrastructure Security Protection
Regulations as mentioned above, the risk that we will be deemed as CIIO and be subject to the
cybersecurity review under Article 5 of Cybersecurity Review Measures is remote; and (iii) although
pursuant to Article 16 of the Cybersecurity Review Measures, possibilities could not be excluded that
we may be required to conduct the cybersecurity review if the cybersecurity review working mechanism
considers our product, service or data processing activities affect national security, as of the Latest
Practicable Date, we have not received any notification or other documentation from relevant
government authorities in relation to national security, including but not limited to cybersecurity review
initiated by governmental authorities. See “Risk Factors – Risks Relating to Our Business and Industry–
The theft, loss, or misuse of personal information or other data, could increase our expenses, damage
our reputation, or result in legal or regulatory proceedings.”
In addition, on September 24, 2024, the State Council published the Regulations on the
Administration of Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Network Data Security
Regulations ”), which came into effect on January 1, 2025. The Network Data Security Regulations
provide implementing rules that cover various aspects, including personal information, data security,
and network security, largely following the paths set by existing data protection laws. Network data
processors are required to comply with these requirements during their daily operation to ensure the
safety of network data. See “Regulatory Overview – PRC Laws and Regulations – Regulations on
Internet Security” for details.
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The Network Data Security Regulations have not had and will not have any material adverse
impact on us because our PRC Data Legal Advisor is of the view that we are in compliance with the
requirements under the Network Data Security Regulations, as applicable, in all material respects, on
the basis that: (1) we have established an effective internal system in connection with cybersecurity and
data protection; (2) all personal information and other kinds of network data collected and generated
from PRC individuals during the operation of PRC members of the Group in Mainland China are
currently stored within Mainland China, and we have not been informed by any government authorities
that the data we process constitutes important data or core data; and (3) as of the Latest Practicable
Date, we had not been subject to any administrative penalty related to cybersecurity or personal
information protection issued by the PRC authorities. Nevertheless, as the Network Data Security
Regulations only came into effect in early 2025, the Group is unable to rule out the possibilities that we
may be required to enhance our current compliance practices according to the interpretation of
competent authorities regarding the Network Data Security Regulations; see “Risk Factors – Risks
Relating to Our Business and Industry – The theft, loss, or misuse of personal information or other data,
could increase our expenses, damage our reputation, or result in legal or regulatory proceedings.” We
will continue to closely monitor the legislative and regulatory development regarding cybersecurity and
personal information protection to comply with the latest regulatory requirements. As of the Latest
Practicable Date, we had not been involved in any review or investigation by the CAC.
To ensure compliance with these regulations, we have in place a set of comprehensive data
compliance policies to cover various aspects, such as data security, cybersecurity, and information
privacy protection. Our employees are required to strictly follow our detailed internal rules, policies and
protocols to ensure the security of our data. Our internal policies regarding the protection of personal
information establish robust management systems and operating procedures that cover the entire
lifecycle for processing of personal information. Furthermore, these policies require an impact
assessment to be conducted for specific scenarios involving the processing of personal information that
may pose a substantial risk to individuals’ rights and interests.
To ensure the secure operation of our business, our cybersecurity and data security policies outline
the technical and organizational measures that must be implemented. These documents encompass
various areas, including personnel and organizational structure, management of cyber-related logs, data
access control, data backup and recovery, IT device utilization, data event response mechanism, and
education and training programs. Additionally, we have a stringent data classification and hierarchical
protection system in place, which provides clear instructions on how to handle and store different types
of collected data. In order to make our employees better understand and comply with the
above-mentioned policies, we organize data and cybersecurity training to employees on a regular basis.
During the Track Record Period and up to the Latest Practicable Date, to the best of our knowledge and
after due and careful inquiry, we did not experience any material information leakage or loss of user
data in all jurisdictions where we have operations.
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REGULATORY CHANGES ON U.S. TARIFF REGULATIONS
In early 2025, the U.S. government issued multiple executive orders implementing additional tariff
on imports from various jurisdictions, including additional tariff amounting to an aggregate of 145% on
imports from the PRC that took effect on April 10, 2025, and the repeal of duty-free treatment under the
U.S. Tariff Act of 1930 for products imported from the PRC to the U.S. with the aggregated fair retail
value under US$800 per person per day (the “ De Minimis Exemption ”) which took effect from May 2,
2025. On May 12, 2025, the PRC government and U.S. government issued a joint announcement
acknowledging that both parties will take actions to build a sustainable and long-term trade relationship,
and the U.S. government is committed to take actions to (i) reduce the additional tariff rate to 54% on
imports from the PRC and Hong Kong SAR, of which the tariff duty amounting to 24% is subject to
temporary imposition suspension for an initial period of 90 days, and (ii) reduce the tariff rates of the
imports from the PRC that would have been subject to the De Minimis Exemption to 54% or US$100
per item. For each year of the Track Record Period, our revenue generated from exports to the U.S.
accounted for 3.2%, 1.8% and 2.3% of our total revenue, respectively, and our gross profit generated
from exports to the U.S. accounted for 1.1%, 0.8% and 1.3% of our total gross profit, respectively. We
have not considered the U.S. market as our primary focus and we do not expect the changes in U.S.
tariff regulations would result in a material adverse effect on our business and financial conditions.
However, the U.S. tariff and trade policies are subject to constant changes, influenced by evolving
geopolitical dynamics, economic priorities and regulatory agenda, and such policies may be amended,
expanded, or replaced with little or no advance notice. We cannot predict the timing, scope, or severity
of potential changes in tariff and trade policies, which may continue to evolve in the future. The
changes in U.S. tariff regulations may bring various second-order effects, for example, (i) the market
competition of global social e-commerce market with destinations in non-U.S. countries and regions
may be intensified as market players may shift their focus to non-U.S, markets, (ii) other countries may
take similar actions by imposing additional tariffs on products with Chinese origins following the
changes in U.S. tariff regulations, (iii) the demands and purchasing willingness of customers, those who
are price-sensitive in particular, may be bruised as cross-border e-commerce merchants may raise the
selling prices of products in response to the incremental tariff costs, and (iv) the global economy may be
subject to ongoing impact, such as slower growth rates or contractions. We cannot assure you that we
will not be influenced by the second-order effects arising from the changes in U.S. tariff regulations and
the potential impacts on us cannot be quantified. Furthermore, we cannot assure you that we will not be
subject to stricter tariff rules or trade restrictions in the future and we may be subject to various risks
relating to tariff changes. For more details, see “Risk Factors − Risks relating to our Business and
Industry − Our business operations involve multiple jurisdictions and are susceptible to changes in
international trade policies, tariff regulations and geopolitical tensions.”
LICENSES, APPROV ALS AND PERMITS
We are required to obtain various licenses, permits and approvals for our operations. During the
Track Record Period and up to the Latest Practicable Date, we had obtained all licenses and permits
which were material to the operation of our business and such licenses and permits were valid and
remained in effect. We usually apply for renewal of the material permits and licenses prior to their
respective expiry dates. As advised by our PRC Legal Advisers, as of the Latest Practicable Date, there
was no legal impediment for us to renew these licenses, permits and certificates as long as we comply
with the relevant legal requirements. The following table sets forth the licenses, approvals, and permits
that are material to our business operation.
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Licenses, Approvals,
and Permits Holder Date of Grant Date of Expiry
License for printing
operations
(ΙՏ຾ᐄ஢̙ᗇ )
Company October 16, 2024 December 31, 2025
Jihong Packaging March 31, 2023 December 31, 2025
Hohhot Jihong July 6, 2020 December 31, 2025
Ningxia Jihong March 5, 2021 December 31, 2025
Langfang Jihong July 27, 2020 December 31, 2025
Jinan Jilian March 25, 2021 December 31, 2025
Anhui Jihong March 25, 2022 December 31, 2025
Shaanxi Jihong May 23, 2022 December 31, 2025
Luanzhou Jihong August 10, 2020 December 31, 2025
Huanggang Jihong April 1, 2025 March 31, 2028
VStar Packaging January 6, 2022 December 31, 2025
Pollutant discharge
permit ( રϮ஢̙ᗇ )
Company February 22, 2023 February 21, 2028
Jihong Packaging July 13, 2022 July 12, 2027
Hohhot Jihong April 27, 2025 April 26, 2030
Hohhot Jihong December 29, 2023 December 28, 2028
Ningxia Jihong December 28, 2023 December 27, 2028
Anhui Jihong May 9, 2024 May 8, 2029
Shaanxi Jihong July 9, 2024 July 8, 2029
Luanzhou Jihong August 7, 2023 August 6, 2028
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Licenses, Approvals,
and Permits Holder Date of Grant Date of Expiry
National industrial
production permit
(͛ପ
஢̙ᗇ )
Anhui Jihong November 4, 2022 February 15, 2026
Langfang Jihong September 28, 2021 September 27, 2026
VStar Packaging January 27, 2025 April 9, 2030
Sanitation license of
disinfection product
manufacturer (ݭ
͛ପΆุሊ͛
஢̙ᗇ )
Anhui Jihong March 25, 2025 March 24, 2029
Langfang Jihong December 8, 2021 December 7, 2025
EMPLOYEES
We had 4,324 employees as of December 31, 2024. The following table sets forth the number of
our employees as of December 31, 2024:
Function Number
Production (1) 2,256
Sales and marketing 74
Technology (1) 534
Accounting and finance 108
General administrative 513
Operation 839
Total 4,324
Note:
(1) Our research and development personnel are managed under our production department and technology department.
Other than research and development personnel, the remaining employees in our technology department primarily
comprise the design team and information technology support team of our cross-border social e-commerce business.
As required by laws and regulations in the PRC, we participate in various employee social security
plans that are organized by municipal and provincial governments including pensions, medical
insurance, unemployment insurance, maternity insurance, work-related injury insurance, and housing
fund plans through a PRC government-mandated benefit-contribution plan. We are required under PRC
laws to make contributions to employee benefit plans at specified percentages of the salaries, bonuses,
and certain allowances of our employees, up to a maximum amount specified by the local government
from time to time. We provide statutory insurance for our overseas employees. In addition, we provide
pension and defined benefit plans for employees of certain of our overseas subsidiaries, which provide
supplemental retirement benefits in addition to the benefits provided by the state-regulated insurance
system.
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Our employees typically enter into standard employment contracts with us. We place a high value
on recruiting, training, and retaining qualified employees. We maintain high standards on selecting and
recruiting talent worldwide and provide competitive compensation packages. Remuneration packages
for our employees mainly comprise base salary and incentive bonus. We generally grant our employees
year-end bonuses, project bonuses and other miscellaneous bonuses, and we assess eligibility of these
bonuses, as well as salary increases, and promotions for employees based on their seniority and project
performance for the current year. To maintain and enhance the quality, knowledge and skill levels of our
workforce as well as their familiarity with industry quality standards and work safety standards, we
provide our employees with training, including orientation programs for new employees, technical
training, and professional and management training.
Our subsidiaries have set up several labor unions in Mainland China according to the related PRC
labor laws. The labor unions represent the relevant employees with respect to labor disputes and other
employee matters. During the Track Record Period and up to the Latest Practicable Date, our employees
did not negotiate their terms of employment through any labor union or by way of collective bargaining
agreements, and we did not experience any material labor disputes or shortages that may have a material
adverse effect on our business, financial position and results of operations.
During the Track Record Period, certain PRC operating entities in our Group did not make full
contribution to the social insurance and housing provident funds for our employees. During the Track
Record Period, we had not been subject to any administrative penalties in connection with the PRC
labor laws and regulations including regulations in relation to social insurance and housing fund
contributions for our employees. See “Risk Factors – Risks Relating to Our Business and Industry – Our
operations may be affected by laws and regulations of various jurisdictions where we operate or sell
products.” To rectify such deficiencies, we have reviewed and implemented enhanced internal control
measures to prevent future potential non-compliances. We have prepared and distributed internally a
compliance policy with respect to social insurance and housing provident fund contribution in
accordance with the PRC laws and regulations. In addition, we have assigned designated personnel to
monitor the status of payments of social insurance premiums and housing provident funds on a regular
basis in order to ensure that we have made these payments for our employees on time in compliance
with the applicable laws and regulations or in a manner as required by the relevant government
authorities. The designated team includes our human resources staff, who shall prepare the written
records of the relevant payments on a monthly basis and submit the same to the heads of our human
resources and finance departments for review. We also intend to provide compliance trainings to the
responsible administrative staff and employees on the updates of the relevant laws and regulations on an
on-going basis. Our Directors believe that our enhanced internal control measures are sufficient and
effective for our current operations.
INSURANCE
We believe that we are equipped with adequate insurance coverage and that it is consistent with
business practices in the industries in which we operate.
We provide social security insurance, including pension insurance, unemployment insurance, work
injury insurance, maternity insurance and medical insurance, for our employees in Mainland China and
statutory insurance for our overseas employees. In addition, we provide pension and defined benefit
plans for employees of certain of our overseas subsidiaries, which provide supplemental retirement
benefits in addition to the benefits provided by the state-regulated insurance system. Our management
evaluates the adequacy of our insurance coverage from time to time and will purchase additional
policies as needed.
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ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE
Our ESG Governance
We are committed to environmental protection and promoting corporate social responsibility and
best corporate governance practices to create sustainable value for our stakeholders and take up
responsibilities as a corporate citizen. We are subject to regular random ESG inspections from our
customers, especially those renowned FMCG companies. Therefore, we seek to uphold the highest
standard of corporate governance as a means to ensure our sustainable growth and safeguard the
interests of all of our stakeholders, including but without limitation, our shareholders, employees,
suppliers, customers, other business partners and the community at large. We have established various
ESG policies which set forth our environmental protection measures, social responsibility principles
and internal governance.
We have adopted comprehensive ESG policies. Under our ESG policies, our Board of Directors are
responsible for identifying and evaluating ESG risks and opportunities, developing ESG policies and
objectives, and reviewing annual performance based on these objectives. Our Board of Directors
reviews ESG-related policies annually and makes necessary adjustments if significant deviations from
the objectives are identified. We have established an ESG department under our Strategy Committee.
Our ESG department, headed by Mr. Wang Y apeng, consists of members from our senior management
team and employees from various departments who have an in-depth understanding of current and
emerging ESG trends. The ESG department is responsible for: (i) assessing and managing our
ESG-related risks and opportunities, and considering the development of our ESG strategic plan,
management structure, systems, strategies and implementation rules to ensure that our ESG policies are
consistently implemented and enforced; (ii) developing guidelines on key ESG matters, and reviewing
and rating the key matters identified; (iii) identifying key ESG issues; (iv) reviewing our ESG efforts
and internal control systems and making recommendations on their appropriateness and effectiveness;
(v) reviewing our ESG-related disclosure documents, including (but not limited to) the annual ESG
report; (vi) monitoring ESG-related risks, enquiring into and formulating appropriate measures in
respect of material issues affecting our performance in ESG efforts, and reviewing and monitor the
handling of such issues; and (vii) provide ESG-related training and information to the Board.
In addition, we have adopted an Implementation Rules for Special Committees of the Board of
Directors ( ) to ensure board diversity from various perspectives,
including gender, age, cultural and educational background and professional experience.
Environmental Management
We endeavor to minimize potential environmental and climate-related risks and impacts from our
daily operation and to foster our green operations. Our Group strictly abides by the environment-related
laws and regulations involving air emissions, wastewater discharge, and waste disposal of Mainland
China and Hong Kong SAR. We have adopted a “three simultaneities” management policy to control
facility safety, pollutant emission and occupational disease for construction projects.
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Usage of Resources
In terms of electricity and energy usage, we strictly abide by energy-related laws and regulations
in the PRC, and have formulated internal policies, such as the Energy Conservation and Consumption
Reduction Management System () and the Energy Conservation Management
Operation Guide (), striving to achieve maximum production results and
economic benefits with the least energy consumption. We have gradually phased out
high-energy-consuming equipment and adopted measures, such as improving the combustion of
industrial boilers, equipping our factories with natural gas, scheduling the load distribution of each
boiler, and adopting water supply pumps, blowers, fans and water treatment ancillary equipment to
reduce energy consumption. In addition, we set up meters to monitor, control and maintain the energy
consumption level of the boilers. We organize energy-conservation-related training and activities to
enhance the energy conservation awareness of our employees, and formulate evaluation, including
reward and punishment system. In 2023, some of our factories adopted energy-saving equipment to
centralize gas supply with both positive and negative pressure.
As a provider of paper packaging products, we also implemented multiple measures to reduce the
use of paper through utilizing lightweight design in our paper packaging business. For instance, in
2023, we saved the base paper of approximately 1,660 tons and approximately 400 square meters by
employing materials with lower grammage and technique improvements in certain of our products.
However, as our future paper consumption is correlated to demands from our customers, it is not
feasible for us to set a clear target for paper usage in the following years, but we would, to our best
efforts, utilize the base paper and recycle the waste paper generated during the production to the
maximum extent to achieve both high utilization rate and recycling rate of paper resources.
For water usage, all of our factories have adopted reclaimed water reuse and treatment equipment
to realize the recycling of wastewater. In 2023, our factory in Shaanxi achieved an annual water saving
of approximately 1,320 tons through recycling of water purification equipment and our factory in
Ningxia recycled wastewater from the pure water equipment in the boiler room, achieving an annual
water saving of approximately 1,440 tons.
In addition, we attach great importance to the management of emissions and have formulated the
Management Policy for the Prevention and Control of Wastewater, Exhaust Gas, Dust and Solid Waste
( ). We discharge domestic wastewater mainly
generated from production and operation. We treat the wastewater with sewage treatment equipment. We
adopted dust removal and filtration technology to control exhaust gas and dust generated from our
production facilities and apply a unified collection and clearing measure to handle solid waste generated
from production. During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any litigation, violation or punishment relating to waste management.
We have formulated the Environmental Protection Contingency Plan ()t o
regulate the handling of sudden pollution incidents and minimize the losses caused by environmental
pollution and ecological damage incidents. We have established a contingency rescue leading group,
which is responsible for cooperating with relevant departments to analyze the causes and impacts of
incidents and take reasonable contingency response measures.
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The following tables set forth the amount of energy and water usage and waste emission for each
year indicated:
Energy Usage
For the year ended December 31,
2022 2023 2024
Gasoline (ton) 77 37 27
Diesel oil (ton) 103 53 28
Natural gas (m3) 4,086,169 3,468,124 2,863,157
Purchased electricity (kWh) (1) 38,437,591 49,512,481 51,384,764
Purchased heat (2) (GJ) (3) –9 5 (4) 479
Notes:
(1) kWh is a unit of energy representing one thousand watt hours.
(2) The thermal data is derived from externally purchased steam (in tons), with a calculation coefficient of 0.0336 into
GJ.
(3) GJ is a unit of measurement of energy consumption.
(4) We have been using externally supplied steam since November 2023, therefore the data in 2023 only covers usage
for November and December in 2023.
Water Usage
For the year ended December 31,
2022 2023 2024
Purchased water (ton) 190,922 177,534 134,958
Waste Emission
For the year ended December 31,
2022 2023 2024
Exhaust gas emission (ton) 122,978 213,000 86,697 (1)
Domestic sewage (ton) 68,450 67,113 66,269
Note:
(1) The volume of exhaust gas decreased significantly in 2024 as we upgraded the gas supply equipment and utilized
cleaner raw materials in some production facilities.
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In accordance with the Notice of the State Council on Printing and Distributing the Action Plan for
Carbon Peaking by 2030 (Ι೯ 2030 ) and the Opinions of the
Central Committee of the Chinese Communist Party and the State Council on Completely and
Comprehensively Implementing the New Development Concept to Achieve Carbon Peaking and Carbon
Neutrality (จԈ ), we
proactively prepared the Action Plan for Carbon Peaking and Carbon Neutrality of Jihong (΅
), formulating the corresponding carbon emission reduction action plans.
The following table sets forth the amount of greenhouse gas emissions for each year/period
indicated:
For the year ended December 31,
2022 2023 2024
Scope 1 greenhouse gas emission
(tCO 2e)(1) 9,490 7,860 6,362
Scope 2 greenhouse gas emission
(tCO 2e)(1) 21,921 28,237 29,357
Note:
(1) tCO 2e stands for tons of carbon dioxide equivalent.
In respect of reduction in energy consumption and emission, we have set out the following targets:
– Energy Usage : We aim to reduce our electricity consumption per unit of revenue by 5% by
2026 compared to 2022.
– Water Usage : We aim to reduce our water consumption per unit of revenue by 5% by 2026
compared to 2022.
– Waste Emission : We aim to achieve the compliant disposal rate of waste to 100% by 2025.
– Greenhouse Gas Emissions : We plan to reach our peak carbon emission levels within the next
four years (by 2028) and to achieve an annual reduction of about 5% starting from 2029.
To reduce incidental greenhouse gas emission generated from our cross-border social e-commerce
business, we strictly regulate the usage and quantities of plastic packaging, such as bubble bags and
bubble mats, for the products we sell overseas. In addition, to reduce waste and emission from returned
products, we have established the Overseas Warehouse Operation Procedure (೻ ), thriving
to improve the order fulfillment rate and reduce product returns through multiple rounds of product
inspection and timely and accurate delivery.
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Based on our carbon inventory, we formulated a carbon reduction plan. In order to achieve the set
carbon reduction targets, we undertook measures such as energy structure reform, energy-consuming
equipment optimization, and renewable energy utilization. In 2023, four of our factories installed
distributed photovoltaics, with an estimated annual power generation of 6,000,000 kWh. With a
sustainable perspective, we will continue to minimize our environmental impact through monitoring our
resource consumption and pollutant emission levels. We intend to reach peak carbon level within the
next four years and realize carbon reduction of approximately 5% per year going forward. In addition,
we will replace all fuel forklifts in our production facilities and warehouses with electric forklifts by
2030.
We are in the process of developing a robust data collection system to effectively gather the exact
amount of our Scope 3 greenhouse gas emissions. We are committed to improving our understanding of
Scope 3 greenhouse gas emissions and are actively working towards aligning the data collection efforts
with industry best practices and emerging reporting standards. The following table sets forth the
implementation timeline for the collection and disclosure of our Scope 3 greenhouse gas emissions:
2022-2023 – Complete the verification of Scope 3 greenhouse gas emissions in certain of
our production facilities.
– Identify the sources of Scope 3 greenhouse gas emissions.
2024 – Commence preliminary collection and statistical analysis of Scope 3
greenhouse gas emissions and address any related issues.
– Conduct professional training and education for relevant staff.
2025 – Develop the carbon emission inventory system.
– Initiate the collection of Scope 3 greenhouse gas emissions data across the
Group, and finetune the collection system and framework, clarify the scope
of data collection for each category, and calibrate the data.
– Provide training to relevant staff on a regular basis.
2026 – Conduct comprehensive collection and verification of Scope 3 greenhouse
gas emissions data across the Group and prepare for the disclosure of such
data.
2027 – Commence disclosure of the Scope 3 greenhouse gas emissions data on an
annual basis.
Social Responsibility
We attach great importance to the integrity of our business operation. In order to further strengthen
the management of business ethics, we have implemented a commitment system for prevention of
commercial bribery for key personnel in key links of operation, and requires personnel in important
position to sign the Commitment Letter for Honest Management and Compliance (຾ᐄΥ஝၍ଣ
ፕՌ ), and to register gifts and hospitality information. In addition, we attach great importance to
building an integrity culture. In order to maintain the corporate compliance culture and carry out
business ethics training, we carried out eight anti-corruption trainings for employees in 2023.
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Labor Practices
Human capital is valuable for our Group in reaching long-term sustainable development. Our
Group believes that human resource management is of utmost importance to our business, and
understands that well-established employment procedures enable itself to attract and retain talents. We
have formulated internal control policies, such as the Cooperate Social Responsibility (CSR)
Management Manual (ึப΂၍ଣ˓̅) and the Compensation and Management System ( ᑚཇ၅
), to promote fairness and equality in the workplace. Our Group strictly prohibits the
employment of child labor in accordance with the relevant laws and regulations such as the Employment
of Children Regulations of Hong Kong and the Provision on the Prohibition of Using Child Labor of the
PRC. We have implemented measures and procedures that emphasize on strict prohibition of engaging
child labor.
We put a strong emphasis on providing suitable trainings for employees in order to cater for the
requirements of various positions. At the same time, in order to enhance the employees’ sense of
happiness at work, we provide our employees with a variety of benefits, such as labor protection,
holiday benefits, birthday gifts, various subsidies and post-job benefits.
Work safety and personal safety of employees always come first during the business operation of
our Group. Adhering to the concept of “people-oriented, safety first, prevention first and comprehensive
management”, we formulated a series of internal policies, such as the Production Safety Management
System (), and adopted a standardized safety management process during
production. In order to enhance our employees’ ability to response to emergencies, we carried out
various safety drills and trainings. In 2023, we have obtained the ISO 45001 occupational health and
safety management system certification.
Social Welfare
We believe the best approach to corporate social responsibility is embedding elements of social
responsibility in our business. For example, we actively organized visits to retired military personnel,
made donations to charitable organizations, and engaged in public welfare activities related to party
building. During the Track Record Period, we donated a total of approximately RMB195.9 thousand and
a total of approximately 891 hours invested in charitable events.
Supply Chain Management
We attach great importance to supplier management, and have formulated internal systems, such as
Supplier Management Procedures ( ԶᏐਠ၍ଣ೻ҏ), Procurement Management Procedures ( મᒅ
၍ଣ೻ҏ), Centralized Procurement Management Measures (), Procurement
Bidding Management Measures (), and Sunshine Integrity Action Cooperation
Agreement (БਗΥЪ՘ᙄ) to strictly regulate the management of access, cooperation and
withdrawal of suppliers.
We select our third-party logistics providers based on various factors, including good
qualifications and route selection, to ensure the efficiency of product delivery and avoid carbon
emissions caused by secondary transportation. Moreover, we consider the logistics providers’ degree of
digitalization during our selection process, as usage of advanced algorithms and GPS technology can
optimize delivery routes, reduce fuel consumption and emissions.
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We keep our suppliers in compliance with relevant policies by checking the supplier’s business
license, management system certification, production equipment list and various other information.
During our cooperation, we conduct sampling evaluation, trial testing and small batch trial production
to ensure quality of products or raw materials sourced from suppliers. In addition, we regularly conduct
performance appraisal to evaluate our suppliers. For suppliers who fail to meet the assessment
standards, we will issue a corrective and preventive report, requiring them to conduct corrective
measures. We will discontinue our relationship with suppliers who fail to meet our assessment standards
for three consecutive procurement cycles.
COMPLIANCE AND LEGAL PROCEEDINGS
Legal Proceedings
During the Track Record Period and up to the Latest Practicable Date, we had not been involved in
any material legal, arbitration or administrative proceedings and we were not aware of any pending or
potential legal, arbitration or administrative proceedings against us or our Directors that may,
individually or in the aggregate, have a material adverse effect on our business, financial condition and
results of operations.
Compliance
During the Track Record Period and up to the Latest Practicable Date, we had not been involved in
any non-compliance that resulted in fines, enforcement actions or other penalties that could,
individually or in the aggregate, materially adversely affect our business, financial condition and results
of operations.
INTERNAL CONTROL AND RISK MANAGEMENT
We are exposed to various risks in the operations of our business and we believe that risk
management is important to our success. We established and maintain a robust risk management and
internal control system. We have adopted and been continuously improved our internal control
mechanisms to ensure the compliance of our business operations. In particular, in view of our Groups’
geographical reach in respect of our cross-border e-commerce business, we have established a set of
extensive internal policies for our cross-border social e-commerce business. To ensure compliance with
the relevant laws and regulations in different jurisdictions, our internal guidelines required our
employees be familiar with the local laws and regulations relating to the selling and distribution of
consumer goods in the jurisdictions to which we sold products, and that our employees shall at all times
observe such local laws and regulations when selecting the category of products to be sold in a certain
jurisdiction. Our policies also established internal selection procedures for local logistic service
providers (including conducting site visits if necessary) to ensure they are familiar with local laws and
regulations with appropriate capacities and manpower in handling regulatory matters, and to include
provisions in the agreements with logistic service providers that they will be responsible for the
compliance of such local laws and regulations in the jurisdictions to which we sold and deliver
products. We have been committed to promoting a compliance culture and will adopt policies and
procedures on various compliance matters, including the Stock Exchange’s requirements on corporate
governance and environmental, social and governance matters. Our Board will be collectively
responsible for the establishment and operations of mechanisms in relation to corporate governance and
environmental, social and governance. Our Directors are involved in the formulation of such
mechanisms and the related policies.
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We have adopted and implemented risk management policies in various aspects of our business
operations to address various potential risks in relation to aspects, such as operations, compliance,
information security and data privacy, intellectual property and investment.
Operational Risk Management
Operational risk refers to the risk of direct or indirect financial loss resulting from incomplete or
problematic internal processes, personnel mistakes, IT system failures or external events. We have
established a series of internal procedures to manage such risk. We maintain a risk management system
to ensure the independence of different departments and committees in performing their risk
management duties. In particular, as a technology company, we have established strict policies on
information security. See “– Data Compliance and Data Security.” Our information technology, human
resources, finance and operations departments are collectively responsible to ensure the compliance of
our operations with internal procedures. Through effective operational risk management, we expect to
control operational risks within a reasonable range by identifying, measuring, monitoring and
containing operational risks to reduce potential losses.
Compliance Risk Management
Compliance risk refers to the risk of being subject to legal and regulatory sanctions, and the risk of
major financial and reputational losses as a result of our failure to comply with relevant laws,
regulations, rules and guidelines. Compliance management refers to the dynamic managing processes of
our effective identification and management of compliance risks and proactively preventing the
occurrence of risk events. Compliance risk management is the core of our risk management activities,
the foundation for effective internal controls and an important aspect of our corporate culture. We have
established a sound compliance risk management framework as part of our comprehensive risk
management system, to achieve effective identification and management of compliance risk and ensure
that our operations are in compliance with applicable laws and regulations.
Information Security and Data Privacy Risk Management
See “– Data Compliance and Data Security.”
Anti-corruption Risk Management
Anti-corruption risk refers to the risk of use of cheating, bribery or other illegal measures for (i)
the pursuit of improper personal benefits at the expense of our Company’s economic interests and (ii)
the pursuit of improper interests of the Company. We have established our anti-corruption risk
management policies prohibiting any corruption activities by the employees, either for the pursuit of
improper personal benefits or improper interests of the Company. In addition, we have maintained a
whistleblower mechanism encouraging the internal report of suspicious activities. We conduct routine
internal trainings and require all suppliers to execute anti-corruption commitments before engagement.
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Audit Committee Experience and Qualification and Board Oversight
To monitor the ongoing implementation of our risk management policies, we have established an
Audit Committee to review and supervise our financial reporting process and internal control system on
an ongoing basis to ensure that our internal control system is effective in identifying, managing and
mitigating risks involved in our business operations. The Audit Committee comprises three members,
namely Mr. Zhang Guoqing, Ms. Ng Weng Sin and Dr. Y ang Chenhui. Mr. Zhang Guoqing is the
chairperson of the Audit Committee and an independent non-executive Director. Please refer to the
section headed “Directors, Supervisors and Senior Management – Board – Independent Non-executive
Directors” in this document.
In addition to our internal control department, we have also established an internal audit
department which is responsible for reviewing the effectiveness of internal controls and reporting issues
identified and improving our internal control system and procedures by identifying internal control
failures and weaknesses on an ongoing basis. The internal audit department reports any major issues
identified to the Audit Committee and Board of Directors on a timely basis.
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OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
By virtue of the Takeovers Code, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang
Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue are deemed to be parties acting in concert. On February
5, 2024, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai,
Mr. Lu Tashan and Tibet Y ongyue executed the Concert Parties Agreement and pursuant to which they
constitute the Single Largest Group of Shareholders, holding approximately 32.1%
# and approximately
27.3% # of our Shares in aggregate as at the Latest Practicable Date, and immediately upon completion
of the Global Offering, respectively.
Pursuant to the Concert Parties Agreement, all members of the Single Largest Group of
Shareholders agreed that they shall act in concert in respect of each of the members of our Group.
Pursuant to the Concert Parties Agreement, it was confirmed that each of Mr. Zhuang Shu, Ms. He
Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai and Tibet Y ongyue had acted in accordance with Ms.
Zhuang Hao’s instructions prior to the date of the Concert Parties Agreement and from when they each
held voting rights at the meetings of the shareholders of the Company. Furthermore, Ms. Zhuang Hao,
Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Tibet Y ongyue and Mr. Lu
Tashan have undertaken to act in concert directly or indirectly through the companies controlled by
them. They have also agreed to, among others, (i) vote unanimously at all meetings of the shareholders
of each member of our Group, (ii) discuss and reach consensus with each other before proposing to such
meetings, and (iii) act in concert in respect of the business operations, governance and other key matters
of our Group which shall be decided by the shareholders of each of the members of the Group. In the
event that consensus cannot be reached, Ms. Zhuang Hao’s view shall prevail and the Single Largest
Group of Shareholders shall reflect her view in their decisions in such meetings accordingly. As at the
Latest Practicable Date, being the latest practicable date for ascertaining the shareholding information
of our Company, each of Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Tibet
Y ongyue (which is held as to 71.4% by Mr. Zhuang Zhenhai) and Mr. Lu Tashan held 18.1%, 9.0%,
1.7%, 1.6%, 1.4% and 0.2%
# of our Shares, respectively. In addition, as advised by our PRC Legal
Advisor, the members of the Single Largest Group of Shareholders are parties acting in concert pursuant
to PRC laws and regulations and the Concert Parties Agreement, and the Concert Parties Agreement is
valid and in compliance with PRC laws and regulations.
Each of Ms. Zhuang Hao, Mr. Zhuang Shu, Mr. Zhang Heping and Mr. Lu Tashan is a Director of
our Company. Ms. Zhuang Hao is the spouse of Mr. Zhang Heping, and the sister of Mr. Zhuang Shu.
Ms. He Jingying is the spouse of Mr. Zhuang Shu. Mr. Zhuang Zhenhai is the father of Ms. Zhuang Hao
and Mr. Zhuang Shu.
Tibet Y ongyue is a limited company established in the PRC on June 30, 2010 and is principally
engaged in the provision of business management and consultancy services. As at the Latest Practicable
Date, Tibet Y ongyue was owned as to approximately 71.4% by Mr. Zhuang Zhenhai, 15.4% by Ms.
Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.71% by Ms. Xu Ping. Ms. Gong Hongying is a director
of three subsidiaries of our Company and a supervisor of six subsidiaries of our Company. As of Latest
Practicable Date, Mr. Li Jiadong and Ms. Xu Ping were independent third parties.
# Includes 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan which shall only become saleable
upon the expiration of the corresponding lockup periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and General
Information – E. 2023 Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the
performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any conditions or the
lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further
details of the Concert Parties Agreement, please refer to the paragraph headed “– Our Shareholders Acting in Concert” in this
section.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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Immediately after the completion of the Global Offering, our Single Largest Group of
Shareholders will hold approximately 27.3% # in aggregate of the issued share capital of our Company.
Accordingly, our Single Largest Group of Shareholders, will not be regarded as our controlling
Shareholders, but will remain as our Single Largest Group of Shareholders upon completion of the
Global Offering. For details of the shareholding of our Single Largest Group of Shareholders, see the
section headed “Substantial Shareholders” in this Prospectus.
COMPETING INTERESTS
Each of our Single Largest Group of Shareholders and Directors confirms that their respective
close associates do not have any interest in a business, apart from the business of our Group, which
competes or is likely to compete, directly or indirectly, with our business.
In March 2013, each of Ms. Zhuang Hao, Mr. Zhuang Shu and Xiamen Y ongyue Investment
Consulting Co., Limited* (ʮ̡ ) (the predecessor of Tibet Y ongyue) entered
into a non-competition undertaking in favor of our Group, pursuant to which, each of Ms. Zhuang Hao,
Mr. Zhuang Shu and Xiamen Y ongyue Investment Consulting Co., Limited* (ࠢ
ʮ̡) (the predecessor of Tibet Y ongyue) have undertaken respectively that (1) as of the date of the
undertaking, the enterprises in which the undertaking party had invested directly or indirectly were not
engaged in the same or similar business as our Company and our controlled subsidiaries, and the
undertaking party had not operated the same or similar business as our Company and our controlled
subsidiaries for others; and (2) during the period when the undertaking party is the controlling
shareholder (as defined under the Company Law and the Shenzhen Stock Exchange Listing Rules) of
our Company, the undertaking party will not directly or indirectly engage in the same or similar
business activities as our Company and our controlled subsidiaries.
In April 2018, Ms. Zhuang Hao, Mr. Zhang Heping, Ms. He Jingying, Mr. Zhuang Shu and Xiamen
Y ongyue Investment Consulting Co., Limited* (ʮ̡ ) (the predecessor of
Tibet Y ongyue), among others), entered into a non-competition undertaking in favor of our Group,
pursuant to which each of Ms. Zhuang Hao, Mr. Zhang Heping, Ms. He Jingying, Mr. Zhuang Shu and
Xiamen Y ongyue Investment Consulting Co., Limited* have undertaken, among others, (1) as of the
date of the undertaking, the enterprises in which the undertaking parties had invested directly or
indirectly were not engaged in the same or similar business as our Company and our controlled
subsidiaries, and the undertaking parties had not operated the same or similar business as our Company
and our controlled subsidiaries for others; and (2) during the period when the undertaking party is the
controlling shareholder and actual controller (as defined under the Company Law and the Shenzhen
Stock Exchange Listing Rules) of our Company, the undertaking party will not directly or indirectly
engage in the same or similar business activities as our Company and our controlled subsidiaries.
# Includes 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan which shall only become saleable
upon the expiration of the corresponding lock-up periods (the next expiration period being 24 months after October 23, 2023)
with satisfaction of performance targets of the Group and Mr. Lu Tashan. Please refer to “Appendix VI – Statutory and
General Information – E. 2023 Restricted Share Incentive Plan” for details of the 2023 Restricted Share Incentive Plan and the
performance targets. The restricted A Shares carry voting rights the exercise of which is not subject to any conditions or the
lock-up periods, but the exercise of voting rights will be subject to the terms of the Concert Parties Agreement. For further
details of the Concert Parties Agreement, please refer to the paragraph headed “– Our Shareholders Acting in Concert” in this
section.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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INDEPENDENCE FROM OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable of carrying
out our business independently of our Single Largest Group of Shareholders and their close associates
after Listing.
Operational Independence
Despite that our Single Largest Group of Shareholders will continue to hold a substantial interest
in our Company and will be our Single Largest Group of Shareholders after the Listing, we have full
rights to make all decisions regarding, and to carry out, our own business operations independently from
our Single Largest Group of Shareholders. We have established our own organizational structure with
independent departments, and each department is assigned to specific areas of responsibilities. We
maintain a set of comprehensive internal control procedures to facilitate the effective operation of our
business. We have sufficient capital, facilities, premises and employees to operate our business
independently from our Single Largest Group of Shareholders and their close associates. We have
independent access to suppliers and customers and are not dependent on our Single Largest Group of
Shareholders and their close associates with respect to supplies for our business operations. We are also
in possession of all relevant licenses necessary to carry out and operate our business and we have
sufficient operational capacity in terms of capital and employees to operate independently. None of our
joint company secretaries, operational personnel or administrative personnel is under the employment
of our Single Largest Group of Shareholders or their respective close associates.
Although during the Track Record Period, there had been transactions between us and our related
parties, details of which are set out in Note 43 in the Accountants’ Report contained in Appendix IA to
the Prospectus, our Directors have confirmed that these related party transactions, if trade related, were
conducted on normal commercial terms or better to us. None of the historical related party transactions
constitute continuing connected transactions as defined in the Listing Rules.
Accordingly, our Directors are satisfied that we will be able to function and operate independently
from our Single Largest Group of Shareholders and their close associates.
Management Independence
The day-to-day management of the business of our Group rested primarily with our Board and our
senior management as of the Latest Practicable Date. The Board comprises five executive Directors, one
non-executive Director, and five independent non-executive Directors. Save for Ms. Zhuang Hao, Mr.
Zhang Heping, Mr. Zhuang Shu and Mr. Lu Tashan, who are both our executive Directors and also
members of our Single Largest Group of Shareholders, all the other seven Directors and other members
of our senior management are independent from our Single Largest Group of Shareholders. The balance
of power and authority is ensured by the operation of the senior management and our Board. See
“Directors, Supervisors and Senior Management – Board” in this Prospectus for more details of our
Directors and senior management.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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Each Director is aware of his or her fiduciary duties as a Director, which require, among other
things, that he or she acts for the benefit and in the best interests of our Company and does not allow
any conflict between his or her duties as a Director and his or her personal interests. Further, we believe
our independent non-executive Directors have the depth and breadth of experience which will enable
them to bring independent judgment to the decision-making process of our Board. Our independent
non-executive Directors have been appointed in accordance with the requirements of the Listing Rules
to ensure that the decisions of the Board are made only after due consideration of independent and
impartial opinions. In the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Company and our Directors or their respective close associates, in
accordance with the constitutional documents of Company, the interested Director(s) shall abstain from
voting at the relevant Board meetings in respect of such transactions and shall not be counted in the
quorum. We will comply with all the relevant requirements of the Stock Exchange and the SFC. We have
established an internal control mechanism to identify connected transactions to ensure that our
Shareholders or Directors with conflicting interests in a proposed transaction will abstain from voting
on the relevant resolutions.
Based on the above, our Directors are satisfied that the Board as a whole, together with our senior
management team, is able to perform the managerial role in our Group independently.
Financial Independence
Our Group has established an independent finance department with its own internal control,
accounting, funding, reporting and financial systems and a team of independent financial staff, as well
as a sound and independent financial system and makes financial decisions according to our Group’s
own business needs. Our Group has adequate capital to operate our business independently, and has
sufficient internal resources to support our daily operations.
During the Track Record Period, our Group had no trade or non-trade related amounts due to/from
our Single Largest Group of Shareholders and their respective close associates.
During the Track Record Period, none of bank borrowings were guaranteed by our Single Largest
Group of Shareholders and any of their close associates.
Our Group has sufficient capital to operate its business independently, and has adequate internal
resources and a strong credit profile to support its daily operations. There will be no financial
assistance, security and/or guarantee provided by our Single Largest Group of Shareholders or their
close associates in favor of our Group or vice versa upon the Listing. We engaged an independent
internal control consultant to assist us in putting in place controls in relation to transactions with
connected persons and their associates to ensure that any advances to or from such persons are in
compliance with the Listing Rules.
Having considered that our future operations are not expected to be financed by our Single Largest
Group of Shareholders or their close associates, our Directors are of the view that our Group is
financially independent from our Single Largest Group of Shareholders and their close associates.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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CORPORATE GOVERNANCE
Each of the members of our Single Largest Group of Shareholders has confirmed that he or she
fully comprehends his obligations to act in our Shareholders’ and our best interests as a whole. Our
Directors recognize the importance of good corporate governance to protect the interest of our
Shareholders. We would adopt the following corporate governance measures to manage potential
conflict of interests between our Group, the Single Largest Group of Shareholders and/or the Directors:
(i) as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules. In particular, our Articles of Association
provides that, unless otherwise provided, a Director shall not vote on any resolution
approving any contract or arrangement or any other proposal in which such Director or any
of his or her close associates has a material interest nor shall such Director be counted in the
quorum present at the meeting;
(ii) where a Shareholders’ meeting is held for considering proposed transaction in which the
Single Largest Group of Shareholders have a material interest, the Single Largest Group of
Shareholders shall abstain from voting on the resolutions and shall not be counted in the
quorum for the voting;
(iii) any transaction between (or proposed to be made between) our Group and the connected
persons will be subject to the requirements under Chapter 14A of the Listing Rules,
including, where applicable, the announcement, reporting, annual review, circular (including
independent financial advice) and independent Shareholders’ approval requirements and with
those conditions imposed by the Stock Exchange for the granting of waiver from strict
compliance with relevant requirements under the Listing Rules;
(iv) we are committed that our Board should include a balanced composition of executive and
non-executive Directors (including independent non-executive Directors). We have appointed
five independent non-executive Directors and we believe our independent non-executive
Directors possess sufficient experience and they are free of any business and/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 and external opinion to
protect the interests of our public Shareholders. Details of our independent non-executive
Directors, see “Directors, Supervisors and Senior Management – Board – Independent
Non-executive Directors”;
(v) in the event that our independent non-executive Directors are requested to review any
conflict of interests between our Group and the Single Largest Group of Shareholders, the
Single Largest Group of Shareholders shall provide the independent non-executive Directors
with all necessary information and our Company shall disclose the decisions of the
independent non-executive Directors either in its annual report or by way of announcements
in accordance with the Listing Rules; and
(vi) our Company has appointed Fosun International Capital Limited as our compliance adviser,
which will provide advice and guidance to our Group in respect of compliance with the
applicable laws and Listing Rules including various requirements relating to Directors’
duties and corporate governance.
Based on the above, our Directors are satisfied that sufficient corporate governance measures have
been put in place to manage conflicts of interest between our Group and our Single Largest Group of
Shareholders and/or Directors to protect the minority Shareholders’ rights after Listing.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (the “ Cornerstone Investment
Agreements ”) with the cornerstone investors set out below (each a “ Cornerstone Investor ” and
together, the “ Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the Offer Price
for a certain number of Offer Shares (rounded down to the nearest whole board lot of 500 Shares) that
may be purchased for an aggregate amount of US$20,000,000 (approximately HK$155,444,000)
(exclusive of brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee)
(the “ Cornerstone Placing ”).
Assuming an Offer Price of HK$7.48, being the low-end of the indicative Offer Price range set out
in this Prospectus, the total number of Offer Shares to be subscribed by the Cornerstone Investors would
be 20,780,500 Offer Shares, representing approximately 30.6% of the Offer Shares pursuant to the
Global Offering and approximately 4.6% of the total Shares in issue immediately upon completion of
the Global Offering.
Assuming an Offer Price of HK$9.08, being the mid-point of the indicative Offer Price range set
out in this Prospectus, the total number of Offer Shares to be subscribed by the Cornerstone Investors
would be 17,118,500 Offer Shares, representing approximately 25.2% of the Offer Shares pursuant to
the Global Offering and approximately 3.8% of the total Shares in issue immediately upon completion
of the Global Offering.
Assuming an Offer Price of HK$10.68, being the high-end of the indicative Offer Price range set
out in this Prospectus, the total number of Offer Shares to be subscribed by the Cornerstone Investors
would be 14,554,000 Offer Shares, representing approximately 21.4% of the Offer Shares pursuant to
the Global Offering and approximately 3.2% of the total Shares in issue immediately upon completion
of the Global Offering.
Our Company is of the view that, the Cornerstone Placing will help to raise the profile of our
Company and to signify that such investors have confidence in the business and prospect of the Group.
The Cornerstone Placing will form part of the International Offering and the Cornerstone Investors will
not subscribe for any Offer Shares under the Global Offering (other than pursuant to the Cornerstone
Investment Agreements). The Offer Shares to be subscribed by the Cornerstone Investors will rank pari
passu in all respect with the fully paid H Shares in issue and will be counted towards the public float of
our Company under Rule 8.08 of the Listing Rules. Immediately following the completion of the Global
Offering, none of the Cornerstone Investors or their close associates will become a substantial
shareholder of our Company, and the Cornerstone Investors or their close associates will not have any
Board representation in our Company. Other than a guaranteed allocation of the relevant Offer Shares at
the final Offer Price, the Cornerstone Investors do not have any preferential rights under each of their
respective Cornerstone Investment Agreements, as compared with other public Shareholders.
CORNERSTONE INVESTORS
– 296 –


--- page 306 ---
To the best knowledge of our Company and after making reasonable enquiries, (i) each
Cornerstone Investor is independent from our Company, our connected persons and their respective
associates and they are not our existing Shareholders; (ii) the Cornerstone Investors are independent
from each other; (iii) the Cornerstone Investors are not accustomed to taking instructions from our
Company, our Directors, our Supervisors, chief executive of our Company, our Single Largest Group of
Shareholders, our substantial shareholders, our existing Shareholders or any of its respective
subsidiaries or their respective close associates in relation to the acquisition, disposal, voting or other
disposition of the Offer Shares registered in their names or otherwise held by them; and (iv) the
subscription of Offer Shares pursuant to each of the respective Cornerstone Investment Agreements is
not directly or indirectly financed by our Company, our Directors, our Supervisors, chief executive of
our Company, our Single Largest Group of Shareholders, our substantial shareholders, our existing
Shareholders or any of its subsidiaries or their respective close associates.
As confirmed by each of the Cornerstone Investors, their subscription under the Cornerstone
Placing would be financed by their internal resources, and each of the Cornerstone Investors has
sufficient funds to settle its respective investment under the Cornerstone Placing. There are no side
arrangements or agreements between our Company and the Cornerstone Investors or any benefit, direct
or indirect, conferred on the Cornerstone Investors by virtue of or in relation to the Cornerstone Placing,
other than a guaranteed allocation of the relevant Offer Shares at the final Offer Price, following the
principles as set out in Chapter 4.15 of the Guide for New Listing Applicant. Our Company became
acquainted with each of the Cornerstone Investors through the business network of our Group or
through introduction by the Company’s existing shareholder(s) or through introduction by certain
underwriters in the Global Offering. The Cornerstone Investors have agreed to pay for the relevant Offer
Shares that they have subscribed before dealings in the Company’s H Shares commence on the Stock
Exchange. There will be no delayed delivery of the Offer Shares for the Cornerstone Investors and no
deferred settlement arrangement for all of the Cornerstone Investors under the Cornerstone Investment
Agreements.
To the best knowledge of our Company and as confirmed by each of the Cornerstone Investors,
none of the Cornerstone Investors nor their respective shareholders are listed on any stock exchanges.
Each of the Cornerstone Investors has confirmed that all necessary approvals have been obtained with
respect to the Cornerstone Placing and that no specific approval from any stock exchange (if relevant) or
its shareholders is required for the relevant cornerstone investment.
The total number of Offer Shares to be subscribed by the Cornerstone Investors pursuant to the
Cornerstone Placing may be affected by reallocation of the Offer Shares between the International
Offering and the Hong Kong Public Offering in the event of over-subscription under the Hong Kong
Public Offering as described in “Structure of the Global Offering – The Hong Kong Public Offer –
Reallocation”. Each of the Cornerstone Investors has agreed that, in the event that the requirement
pursuant to Rule 8.08(3) of the Listing Rules, which provides that no more than 50% of our Shares in
public hands on the Listing Date can be beneficially owned by the three largest public Shareholders,
cannot be satisfied, the Overall Coordinators, the Joint Global Coordinators, the Joint Sponsors and our
Company have the right to adjust the allocation of the number of Offer Shares to be subscribed by the
Cornerstone Investors in their sole and absolute discretion to satisfy the requirement pursuant to Rule
8.08(3) of the Listing Rules. Details of the actual number of the Offer Shares to be allocated to the
Cornerstone Investors will be disclosed in the allotment results announcement to be issued by the
Company on or around May 26, 2025.
CORNERSTONE INVESTORS
– 297 –


--- page 307 ---
THE CORNERSTONE INVESTORS
Set out below is the aggregate number of Offer Shares, and the corresponding percentage to the
Company’s total Offer Shares and total issued Shares under the Cornerstone Placing.
Based on the Offer Price of HK$7.48 (being the low-end of the Offer Price range)
Cornerstone
Investor Investment Amount*
Number of Offer
Shares (rounded
down to the nearest
whole board lot of
500 Shares)
Approximate % of
total number of
Offer Shares
Approximate % of
the total issued share
capital of our
Company
immediately
following the
completion of Global
Offering
Timber Kangaroo US$3,000,000
(equivalent to
approximately
HK$23,316,600)^
3,117,000 4.6% 0.7%
Y ulong International US$7,000,000
(equivalent to
approximately
HK$54,405,400)^
7,273,000 10.7% 1.6%
Ms. Shen Zhenyu
(ӏጲρ )
US$10,000,000
(equivalent to
approximately
HK$77,722,000)^
10,390,500 15.3% 2.3%
Total US$20,000,000
(equivalent to
approximately
HK$155,444,000)^
20,780,500 30.6% 4.6%
Notes:
# All share numbers and amounts are for illustrative purposes only.
^ Calculated based on an exchange rate of US$1.0000: HK$7.7722 for illustrative purpose. The actual investment amount of
the relevant Cornerstone Investor may and the exact amount of Offer Shares to be subscribed by the relevant Cornerstone
Investor may be subject to adjustment due to the actual exchange rate to be used as prescribed in the Cornerstone
Investment Agreements.
* Exclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy.
CORNERSTONE INVESTORS
– 298 –


--- page 308 ---
Based on the Offer Price of HK$9.08 (being the mid-point of the Offer Price range)
Cornerstone
Investor Investment Amount*
Number of Offer
Shares (rounded
down to the nearest
whole board lot of
500 Shares)
Approximate % of
total number of
Offer Shares
Approximate % of
the total issued share
capital of our
Company
immediately
following the
completion of Global
Offering
Timber Kangaroo US$3,000,000
(equivalent to
approximately
HK$23,316,600)^
2,567,500 3.8% 0.6%
Y ulong International US$7,000,000
(equivalent to
approximately
HK$54,405,400)^
5,991,500 8.8% 1.3%
Ms. Shen Zhenyu
(ӏጲρ )
US$10,000,000
(equivalent to
approximately
HK$77,722,000)^
8,559,500 12.6% 1.9%
Total US$20,000,000
(equivalent to
approximately
HK$155,444,000)^
17,118,500 25.2% 3.8%
Notes:
# All share numbers and amounts are for illustrative purposes only.
^ Calculated based on an exchange rate of US$1.0000: HK$7.7722 for illustrative purpose. The actual investment amount of
the relevant Cornerstone Investor may and the exact amount of Offer Shares to be subscribed by the relevant Cornerstone
Investor may be subject to adjustment due to the actual exchange rate to be used as prescribed in the Cornerstone
Investment Agreements.
* Exclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy.
CORNERSTONE INVESTORS
– 299 –


--- page 309 ---
Based on the Offer Price of HK$10.68 (being the high-end of the Offer Price range)
Cornerstone
Investor Investment Amount*
Number of Offer
Shares (rounded
down to the nearest
whole board lot of
500 Shares)
Approximate % of
total number of
Offer Shares
Approximate % of
the total issued share
capital of our
Company
immediately
following the
completion of Global
Offering
Timber Kangaroo US$3,000,000
(equivalent to
approximately
HK$23,316,600)^
2,183,000 3.2% 0.5%
Y ulong International US$7,000,000
(equivalent to
approximately
HK$54,405,400)^
5,094,000 7.5% 1.1%
Ms. Shen Zhenyu
(ӏጲρ )
US$10,000,000
(equivalent to
approximately
HK$77,722,000)^
7,277,000 10.7% 1.6%
Total US$20,000,000
(equivalent to
approximately
HK$155,444,000)^
14,554,000 21.4% 3.2%
Notes:
# All share numbers and amounts are for illustrative purposes only.
^ Calculated based on an exchange rate of US$1.0000: HK$7.7722 for illustrative purpose. The actual investment amount of
the relevant Cornerstone Investor may and the exact amount of Offer Shares to be subscribed by the relevant Cornerstone
Investor may be subject to adjustment due to the actual exchange rate to be used as prescribed in the Cornerstone
Investment Agreements.
* Exclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy.
The following information about the Cornerstone Investors was provided to the Company by the
Cornerstone Investors in relation to the Cornerstone Placing.
CORNERSTONE INVESTORS
– 300 –


--- page 310 ---
Timber Kangaroo Capital Limited
Timber Kangaroo Capital Limited (“ Timber Kangaroo ”) was incorporated in the British Virgin
Islands on 12 March 2021. Timber Kangaroo is an investment institution and its principal business
activities include investment management and investment advisory services, focusing primarily on
investments in the technology, consumer, healthcare, and financial sectors. As of June 30, 2024, the net
asset value of Timber Kangaroo was approximately HK$308 million.
Timber Kangaroo is wholly owned by Mr. Cheng Sai Kit ( ቍ˰௫ ), an independent third party.
Timber Kangaroo confirmed that all necessary approvals have been obtained with respect to the
Cornerstone Placing and that no specific approval from any stock exchange (if relevant) is required for
the relevant cornerstone investment.
Yulong International Capital Limited
Y ulong International Capital Limited (“ Yulong International ”) was incorporated in the British
Virgin Islands on 26 January 2021. Y ulong International is an investment firm primarily focused on the
domestic and overseas capital markets, with its business centered on secondary market equity
investments and financing advisory services. As of the financial year ended December 31, 2024, the net
asset value of Y ulong International was approximately HK$800 million.
Y ulong International is wholly owned by Ms. Su Shijin (ᎀ ), an independent third party.
Y ulong International confirmed that all necessary approvals have been obtained with respect to the
Cornerstone Placing and that no specific approval from any stock exchange (if relevant) is required for
the relevant cornerstone investment.
Ms. Shen Zhenyu
Ms. Shen Zhenyu is the Chairwoman of Harbin Gloria Pharmaceuticals Co., Ltd. (stock code:
002437), a company listed on the Shenzhen Stock Exchange. Harbin Gloria Pharmaceuticals Co., Ltd. is
principally engaged in the research, development, production, and sale of a broad portfolio of
pharmaceutical products, supported by advanced manufacturing capabilities and recognized industry
certifications. She directly holds approximately 4.92% equity interest in Harbin Gloria Pharmaceuticals
Co. Ltd, marking her the single largest shareholder of the company.
Ms. Shen Zhenyu is an independent third party. She confirmed that no approval, including any
specific approvals from any stock exchange (if relevant), will be required with respect to the
Cornerstone Placing.
CORNERSTONE INVESTORS
– 301 –


--- page 311 ---
CLOSING CONDITIONS
The obligation of the Cornerstone Investors to acquire the Offer Shares under the Cornerstone
Investment Agreements is subject to, among other things, the following closing conditions:
(a) the Hong Kong Underwriting Agreement and the International Underwriting Agreement
being entered into and having become effective and unconditional (in accordance with their
respective original terms or as subsequently waived or varied by agreement of the parties
thereto) by no later than the time and date as specified in the Hong Kong Underwriting
Agreement and the International Underwriting Agreement, and neither the Hong Kong
Underwriting Agreement nor the International Underwriting Agreement having been
terminated;
(b) the Offer Price having been agreed upon between our Company and the Joint Global
Coordinators (on behalf of the Underwriters);
(c) the Listing Committee having granted the listing of, and permission to deal in, the Shares
(including the Shares under the Cornerstone Placing) as well as other applicable waivers and
approvals and such approval, permission or waiver having not been revoked prior to the
commencement of dealings in the Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority which
prohibits the consummation of the transactions contemplated in the Global Offering or the
Cornerstone Investment Agreements and there shall be no orders or injunctions from a court
of competent jurisdiction in effect precluding or prohibiting consummation of such
transactions; and
(e) the respective representations, warranties, undertakings and confirmations of the
Cornerstone Investors under the Cornerstone Investment Agreements are accurate and true in
all respects and not misleading and that there is no breach of the Cornerstone Investment
Agreements on the part of the Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any
time during the period of six months from and inclusive of the Listing Date (the “ Lock-up Period ”),
dispose of any of the Offer Shares it has subscribed pursuant to the Cornerstone Investment Agreements,
save for certain limited circumstances, such as transfers to any of its wholly-owned subsidiaries who
will be bound by the same obligations of such Cornerstone Investors, including the Lock-up Period
restriction.
CORNERSTONE INVESTORS
– 302 –


--- page 312 ---
OVERVIEW
Our Board consists of eleven Directors, including five executive Directors, one non-executive
Director and five independent non-executive Directors. Our Board is responsible, and has general
authority for, the management and operation of our Company.
Our Supervisory Committee consists of three Supervisors, including two employee representative
Supervisors and one Shareholders representative supervisor.
Our senior management is responsible for the daily operations of our Company.
BOARD
Upon Listing, the Board will consist of eleven Directors, comprising five executive Directors, one
non-executive Director and five independent non-executive Directors. The following table sets forth
certain information regarding our Directors:
Name Age Position
Time of joining
our Group
Date of
appointment as
Director Roles and responsibilities
Relationship with
other Directors,
Supervisors and/
or Senior
management
Mr. W ANG Y apeng
(؃)
45 Chairman of the
Board of
Directors and
executive
Director
August 2017 September 2020 Responsible for the overall
management, strategic and
business development, and
overall management of our
Group with a focus on
cross border e-commerce
business
None
Ms. ZHUANG Hao
(୿ख)
55 Executive
Director and
general
manager
December 2003 December 2003 Responsible for the overall
management, strategic and
business development of
our Group
Spouse of Mr. Zhang
Heping; Sister of
Mr. Zhuang Shu;
Member of the
Single Largest
Group of
Shareholders
Mr. ZHANG Heping
(ੵձ̻ )
55 Executive
Director, vice
chairman and
deputy general
manager
February 2006 July 2010 Responsible for the overall
management, strategic and
business development, and
overall management of
packaging business of our
Group
Spouse of Ms.
Zhuang Hao;
Member of the
Single Largest
Group of
Shareholders
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 303 –


--- page 313 ---
Name Age Position
Time of joining
our Group
Date of
appointment as
Director Roles and responsibilities
Relationship with
other Directors,
Supervisors and/
or Senior
management
Mr. ZHUANG Shu
(୿⤳)
53 Executive
Director and
deputy general
manager
December 2003 November 2013 Responsible for the overall
management, strategic and
business development, and
management of packaging
business of our Group
Brother of Ms.
Zhuang Hao;
Member of the
Single Largest
Group of
Shareholders
Mr. LU Tashan
(௔̴ʆ )
27 Executive
Director
April 2023 February 2024 Responsible for the
management of Hong
Kong business of our
Group
Member of the
Single Largest
Group of
Shareholders
Mr. LIAO Shengxing
(࿋͛ጳ )
48 Non-executive
Director
November 2019 November 2019 Providing guidance and
advice on the business
strategies of our Group
None
Dr. ZHANG Guoqing
(ੵ਷૶ )
48 Independent
non-executive
Director
May 2021 May 2021 Responsible for providing
independent opinion and
judgment to our Board
None
Dr. Y ANG Chenhui
(เોฯ )
57 Independent
non-executive
Director
September 2020 September 2020 Responsible for providing
independent opinion and
judgment to our Board
None
Mr. HAN Jianshu
(ࣣܔ)
63 Independent
non-executive
Director
November 2022 November 2022 Responsible for providing
independent opinion and
judgment to our Board
None
Professor Alfred SIT
Wing Hang
(ᑡ͑㛬 ), GBS, JP
63 Independent
non-executive
Director
February 2024 February 2024 Responsible for providing
independent opinion and
judgment to our Board
None
Ms. NG Weng Sin
(ю͑⟂ )
53 Independent
non-executive
Director
February 2024 February 2024 Responsible for providing
independent opinion and
judgment to our Board
None
Executive Directors
Mr . W ANG Yapeng (؃) formerly known as Wang Y apeng ( ˮԭᘄ ), aged 45, is the chairman
and an executive Director of our Company. Mr. Wang joined our Company as head of the cross-border
e-commerce business of our Group in August 2017, was subsequently appointed as the vice chairman
and the chairman of our Company in September 2020 and November 2022 respectively, and is primarily
responsible for the overall management, strategic and business development, and overall management of
our Group with a focus on cross border e-commerce business. Mr. Wang is also the chairperson of the
Strategy Committee of our Company.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 304 –


--- page 314 ---
Mr. Wang has over 20 years of experience in Internet marketing and cross-border e-commerce
business. From June 2003 to December 2015, Mr. Wang worked as an executive director at Beijing
Yisainuo Technology Co., Ltd.* (ʮ̡ ). From January 2013 to November 2014,
Mr. Wang served as an executive director at Shanghai Kugai Information Technology Co., Ltd.* ( ɪऎბ
ʮ̡ ), a company principally engaged in the online advertisement business. From
November 2015 to February 2018, Mr. Wang served as an executive director and the general manager at
Guangzhou Nuorui Information Technology Co., Ltd.* (ʮ̡ ). From May 2016
to February 2017, Mr. Wang served as an executive director and the general manager at Zhengzhou
Yisainuo Advertisement Co., Ltd.* (ʮ̡ ), a company principally engaged in the
online advertisement business. From May 2016 to August 2017, Mr. Wang served as an executive
director and the general manager at Zhengzhou Yisainuo Information Technology Co., Ltd.* (ᒄ
ʮ̡ ), a company principally engaged in the online advertisement business. From June
2016 to August 2017, Mr. Wang served as a supervisor at Yisainuo (Qingdao) Networking Technology
Co., Ltd.* (ᒄፕ (ࢥڡ)ʮ̡ ). Mr. Wang ceased his duties and obligations in his relevant
positions at Zhengzhou Yisainuo Information Technology Co., Ltd.* and Yisainuo (Qingdao)
Networking Technology Co., Ltd.* when he joined our Group in August 2017, despite the fact that both
companies had delayed in updating their corporate filings and therefore resulted in Mr. Wang’s official
cessation date with Zhengzhou Yisainuo Information Technology Co., Ltd.* being January 25, 2018 and
that with Yisainuo (Qingdao) Networking Technology Co., Ltd.* being December 15, 2020, when the
relevant corporate filings were finally completed by the relevant company. Mr. Wang Y apeng had held
40% shares in Yisainuo Information Technology. On January 23, 2018, Mr. Wang disposed of the
relevant 40% shares in Yisainuo Information Technology to an independent third party at nil
consideration due to the fact that the said company was still at an early stage since incorporation with
low registered capital and low profitability at the material time.
Mr. Wang graduated from Changge No.1 High School (໤̹ୋɓ৷ॴʕኪ ) in the PRC in July
1998.
Ms. ZHUANG Hao ( ୿ख), aged 55, is our founder, an executive Director and the general
manager of our Company, and is primarily responsible for the overall management, strategic and
business development of our Group. Ms. Zhuang served as a manager of our Company upon
establishment and was subsequently appointed as a Director in 2003, after which she has continued to
serve as a Director and was also appointed as the general manager of our Company in 2022. Ms. Zhuang
is also a member of the Strategy Committee of our Company. Ms. Zhuang currently serves key positions
in a number of our subsidiaries. She is a director of Hongkong Gat Wang Technology Limited (ಥΛ҃
ʮ̡ ) (formerly known as Hong Kong Jihong Technology Co., Limited (ʮ
̡)) and Fujian Strait Copyright Operation Co., Ltd.* (ʮ̡ ), the director of
Guizhou Jihong Brand Planning Management Co, Ltd.* (ʮ̡ ), Xiamen
Haisheng Rongchuang Information Technology Co., Ltd.* (ʮ̡ ) and
Jiangxi Weizhi Supply Chain Management Co., Ltd* (ʮ̡ ). She also serves
as an executive director of Stork Paper (Shanghai) Co., Ltd (෫дॷุ (ɪऎ)ʮ̡ ). She is also an
executive director and the general manager of Jiangxi Jihong Supply Chain Management Co., Ltd* ( Ϫ
ʮ̡ ) and Xiamen Jikeyin E-Commerce Co., Ltd.* (ΙཥɿਠਕϞ
ʮ̡ ), the supervisor of Hangzhou GiiMall Internet Technology Co., Ltd. (ࠢ
ʮ̡), all of which are our subsidiaries.
Ms. Zhuang has over 25 years of experience in the packaging and advertisement industry. From
December 1996 to February 2021, Ms. Zhuang served as an executive director and the general manager
at Xiamen Zhengqi Information Technology Co., Limited* (ʮ̡ ), a former
subsidiary of the Company, a company principally engaged in the advertisement designing and plate
making business.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 305 –


--- page 315 ---
Ms. Zhuang obtained her bachelor’s degree in printing engineering from the Beijing Institute of
Graphic Communication ( ̏ԯΙՏኪ৫ ) in June 1992.
Ms. Zhuang is the spouse of Mr. Zhang Heping, our executive Director, and the sister of Mr.
Zhuang Shu, our executive Director.
Mr . ZHANG Heping ( ੵձ̻ ), aged 55, is the vice chairman, an executive Director and a deputy
general manager of our Company, and is primarily responsible for the overall management, strategic and
business development, and overall management of packaging business of our Group. Mr. Zhang is also a
member of the Nomination Committee of our Company. Mr. Zhang served as a director of our Company
from July 2010 to November 2016. From November 2016 to November 2022, he served as a director and
general manager of our Company. Mr. Zhang was appointed as a director, vice chairman and deputy
general manager of our Company in November 2022. Mr. Zhang currently holds various roles in our
subsidiaries. He serves as an executive director and general manager of Xiamen Jihong Packaging
Industry Co., Limited* (ʮ̡ ), Hohhot Jihong Printing & Packaging Co.,
Limited* (ʮ̡ ), Jinan Jihong Packaging Limited* (ࠢ
ʮ̡), VStar Packaging (China) Limited* (ʮ̡ ) and Shaanxi Y ongxin Paper
Packaging Co.* (ʮ̡ ), the chairman of Luanzhou Jihong Packaging Limited*
(ʮ̡ ), an executive director of Langfang Jihong Packaging Limited* ( ఼ѥ̹Λ҃̍
ʮ̡ ), Huanggang Jihong Packaging Limited* (ʮ̡ ) and Shaanxi Jihong
Packaging Limited* (ʮ̡ ), and he also serves as an executive director and financial
principal of Ningxia Jihong Environmental Protection Packaging Technology Co., Limited* (Λ҃
ʮ̡ ).
Mr. Zhang has over 24 years of experience in the printing and packaging business. From December
1996 to February 2006, Mr. Zhang served as the vice general manager of Xiamen Zhengqi Information
Technology Co., Limited* (ʮ̡ ), a former subsidiary of the Company, a
company principally engaged in advertisement designing and plate making business.
Mr. Zhang obtained his bachelor’s degree in printing engineering from Beijing Institute of Graphic
Communication ( ̏ԯΙՏኪ৫ ) in June 1992.
Mr. Zhang is the spouse of Ms. Zhuang Hao, our executive Director.
Mr . ZHUANG Shu ( ୿⤳), aged 53, is an executive Director and a deputy general manager of our
Company, and is responsible for the overall management, strategic and business development, and
management of packaging business of our Group. Mr. Zhuang was appointed as a Director and the
deputy general manager of our Company in November 2013. Mr. Zhuang is also a member of the
Remuneration and Appraisal Committee of our Company. Mr. Zhuang currently serves as an executive
director and manager of Xiamen 3060 Carbon Reduction Technology Co., Limited* (ɧཧʬཧ၁ಯ
ʮ̡ ), a director of Shaanxi Y ongxin Paper Industry Packing Co., Limited ( ৯Г͑㒥ॷุ̍ༀ
ʮ̡ ) and Luanzhou Jihong Packaging Limited* (ʮ̡ ), and a supervisor of
Hohhot Jihong Printing & Packaging Co., Limited* (ʮ̡ ), Ningxia
Jihong Environmental Protection Packaging Technology Co., Limited* (ʮ
̡), and Shaanxi Jihong Packaging Limited* (ʮ̡ ), all of which are our
subsidiaries.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 306 –


--- page 316 ---
From September 1994 to February 2006, Mr. Zhuang worked at China Telecommunications
Corporation Limited Xiamen Branch (ʱʮ̡ ), a company principally
engaged in the telecommunication business. From February 2006 to October 2013, Mr. Zhuang served
as the vice general manager at Langfang Branch of Xiamen Jihong Technology Co., Limited* (Λ҃
ʮ఼̡ѥʱʮ̡ ), a company principally engaged in the packaging business and a
subsidiary of our Company.
Mr. Zhuang graduated from the Southwest Jiaotong University (ʹஷɽኪ ) in the PRC with a
bachelor’s degree in mechanical engineering in June 1994. He further obtained a master’s degree in
business administration from Xiamen University (ɽኪ ) in the PRC in January 2005.
Mr. Zhuang is the brother of Ms. Zhuang Hao, our executive Director.
Mr . LU Tashan ( ௔̴ʆ ), aged 27, was appointed as our executive Director in February 2, 2024
and assistant to the general manager of our Company since 2023, and is responsible for the Hong Kong
business of our Group. Since April 2023, Mr. Lu has served as the general manager’s assistant of our
Company and a director of Hongkong Gat Wang Technology Limited (formerly known as Hong Kong
Jihong Technology Co., Limited), our wholly-owned subsidiary.
Prior to joining our Group, Mr. Lu worked as a technology product specialist at Apple Trading
(Shanghai) Co., Limited* (׸( ɪऎ)ʮ̡ ), a company engaged in the technology and retail
businesses, from May 2021 to March 2022. Mr. Lu then worked at Ningbo Goldbrick Trading Co. Ltd
(ʮ̡ ) until November 2022.
Mr. Lu graduated from Ritsumeikan University in Japan with a bachelor’s degree in civil
engineering in March 2021.
Non-executive Director
Mr . LIAO Shengxing ( ࿋͛ጳ ), aged 48, has served as our Director since November 2019, and is
responsible for providing guidance and advice on the business strategies of our Group.
Prior to joining our Company, Mr. Liao served as the secretary to the board of Ganzhou
Development and Investment Holding (Group) Co., Limited* (ப΂ʮ̡ )
from June 2009, and took up the role as the vice general manager of Ganzhou Development and
Investment Holding (Group) Co., Limited* (ப΂ʮ̡ ) from February 2019
to March 2021. From June 2019 to April 2021, Mr. Liao served as the director of Ganzhou Guangwei
Development Industrial Co., Limited* (ʮ̡ ). Since December 2019, Mr. Liao
has served as the director of Kingsignal Technology Co., Limited* (ʮ
̡). From December 2020 to March 2022, Mr. Liao served as the chairman of Ganzhou Investment
Development Fund Management Co., Limited* (ʮ̡ ), where he was
responsible for investment strategies and decisions.
Mr. Liao graduated from the bachelor's degree program in the Jiangxi University of Finance and
Economics ( ϪГৌ຾ɽኪ ) in the PRC majoring in accounting in December 2005 through higher
education self-taught examination, and a master’s degree in business administration from the Jiangxi
University of Science and Technology ( ϪГଣʈɽኪ ) in the PRC in June 2014.
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Independent Non-executive Directors
Dr . ZHANG Guoqing ( ੵ਷૶ ), aged 48, was appointed as our independent Director in May
2021. Dr. Zhang is the chairman of the Audit Committee and a member of the Remuneration and
Appraisal Committee of our Company. He is responsible for supervising and providing independent
judgment and opinion to our Board on issues material to our Group and where otherwise required.
Dr. Zhang has more than 15 years of experience in academia, financial reporting, management and
services. Dr. Zhang joined Xiamen University (ɽኪ ) in the PRC in July 2005 and is currently a
professor at the business management school of the university. Since October 2019, Dr. Zhang has
served as an independent director of Kehua Data Co., Ltd. (ʮ̡ ), a company listed
on the SZSE (stock code: 002335) and primarily engaged in the supply of integrated solutions for power
protection and energy conservation. Since February 2023, Dr. Zhang has served as an independent
director of Guangzhou Baiyun Electric Equipment Co., Ltd. (ʮ̡ ), a
company listed on the Shanghai Stock Exchange (Stock Code: 603861) and primarily engaged in the
research and development, manufacturing, sale and services of complete switchgear control equipment.
Dr. Zhang graduated from the Nanchang University (ɽኪ ) in the PRC with a bachelor’s
degree in marketing in July 1998. He further obtained a master’s degree in accounting from the Xiamen
University (ɽኪ ) in the PRC in July 2002, and a doctor’s degree in accounting from the Shanghai
University of Finance and Economics ( ɪऎৌ຾ɽኪ ) in the PRC in July 2005.
Dr . Y ANG Chenhui ( เોฯ ), aged 57, was appointed as our independent director in September
2020. Dr. Y ang is also the chairman of the Nomination Committee and a member of the Audit
Committee of our Company. He is responsible for supervising and providing independent judgment and
opinion to our Board on issues material to our Group and where otherwise required.
Since June 1995, Dr. Y ang has taken up academic roles in Xiamen University (ɽኪ )i nt h e
PRC and is currently a professor of the Department of Computer Science and Technology. Dr. Y ang is
currently also the executive dean of Y ongtai Institute of Artificial Intelligence* (Ӻ৫ )
of Xiamen University.
Dr. Y ang graduated from the National University of Defense Technology (Ҧɽኪ )i nt h e
PRC with a bachelor’s degree in automatic control in July 1989. He further obtained a master’s degree
from National University of Defense Technology (Ҧɽኪ ) in the PRC in February 1992, and a
doctor’s degree in mechanical manufacturing and automation from the Zhejiang University ( एϪɽኪ )
in the PRC in May 1995. Dr. Y ang obtained his independent director qualification certificate in
September 2020.
Mr . HAN Jianshu (ࣣܔ) aged 63, was appointed as our independent director in November
2022. Mr. Han is also a member of the Strategy Committee of our Company. He is responsible for
supervising and providing independent judgment and opinion to our Board on issues material to our
Group and where otherwise required.
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Prior to joining our group, Mr. Han has served various positions in Shanxi Xinghuacun Fen Wine
Factory Co., Limited* (ʮ̡ )( “ Shanxi Xinghuachun ”), a company whose
shares are listed on the Shanghai Stock Exchange (stock code: 600809), from October 1983 to January
2019 with his last position as a director. From February 2016 to January 2019, Mr. Han served as a
director, member of the party committee and the head engineer of Shanxi Xinghua Village Fenjiu Group
Co., Limited* (ப΂ʮ̡ ), the holding company of Shanxi Xinghuacun. From
January 2019 to December 2021, Mr. Han served as a director of the Shanxi Coal Import & Export
Group Co., Limited* (ʮ̡ ).
Mr. Han completed a four-year bachelor degree program in Shanxi University ( ʆГɽኪ )i nt h e
PRC majoring in microbiology in August 1983. He then completed a three-year postgraduate degree
program majoring in economics in the Party School of the Central Committee of the Chinese
Communist Party (ࣧthe PRC in July 2010.
Professor Alfred SIT Wing Hang ( ᑡ͑㛬 ), GBS, JP , aged 63, was appointed as our independent
non-executive Director on February 2, 2024. Professor Sit is also a member of the Nomination
Committee of our Company. He is responsible for supervising and providing independent judgment and
opinion to our Board on issues material to our Group and where otherwise required.
Professor Sit joined the Electrical and Mechanical Services Department (EMSD) in 1984 and was
subsequently promoted to the director in 2017. From April 2020 to June 2022, Professor Sit served as
the Secretary for Innovation and Technology of the Hong Kong SAR Government. Since July 2023,
Professor Sit served as an independent non-executive director of Morris Home Holdings Limited (࢙
ʮ̡ ), a company listed on the Main Board of the Stock Exchange (Stock Code: 1575)
and primarily engaged in in the manufacturing of sofas and sofa covers in Mainland China with an
integrated design, manufacturing, sales and marketing operation. Since October 2023, Professor Sit
served as an independent non-executive director of Envision Greenwise Holdings Limited (౻อঐછ
ʮ̡ ) (formerly known as Golden Ponder Holdings Limited, a company listed on the Main Board
of the Stock Exchange (Stock Code: 1783) and primarily engaged in the residential and commercial
buildings construction business as well as environmental conservation business. Since January 2024,
Professor Sit served as an independent non-executive director of Wai Y uen Tong Medicine Holdings
Limited (ʮ̡ ), a company listed on the Main Board of the Stock Exchange (stock
code: 897) and primarily engaged in the manufacturing and sales of medicine.
Professor Sit received the Higher Diploma in Electrical Engineering in 1981 and the Associateship
in Electrical Engineering in November 1982 at The Hong Kong Polytechnic (currently known as the
Hong Kong Polytechnic University). Professor Sit obtained his master of business administration at The
Chinese University of Hong Kong in October 1992. Professor Sit is a fellow member of the Hong Kong
Institution of Engineers, and is currently an honorary fellow of the Hong Kong Institute of Facility
Management and a Professor of Practice of the Department of Electrical and Electronic Engineering at
the Hong Kong Polytechnic University. Professor Sit is also the Chief Executive and Secretary of the
Hong Kong Institution of Engineers, a Senior Advisor to the President and Vice-Chancellor and
Honorary Professor of the Hong Kong Baptist University.
Ms. NG Weng Sin ( ю͑⟂ ), aged 53, was appointed as our independent non-executive Director
on February 2, 2024. Ms. Ng is also the chairman of the Remuneration and Appraisal Committee and a
member of the Audit Committee of our Company. She is responsible for supervising and providing
independent judgment and opinion to our Board on issues material to our Group and where otherwise
required.
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Ms. Ng has more than 25 years of experience in financial reporting, management and services. Ms.
Ng worked at Deloitte Touche Tohmatsu from August 1997 to September 2001. From September 2001 to
May 2003, she worked at Hong Kong Wing On Travel Service Limited. From November 2003 to
November 2004, she worked at Hua Y ang Printing Holdings Co., Ltd. From November 2004 to May
2006, she worked at Norstar Automobile Industrial Holding Limited. From May 2006 to February 2010,
she was the financial controller, the company secretary and authorized representative of China
Information Technology Development Limited (ʮ̡ ), a company listed on the
Stock Exchange (Stock Code: 8178). From August 2010 to October 2013, she served as the chief
financial officer, and from February 2011 to October 2013, she served as the company secretary and the
authorized representative of Billion Industrial Holdings Limited (ʮ̡ ), a company
listed on the Main Board of the Stock Exchange (Stock Code: 2299). From May 2014 to December
2015, Ms. Ng served as the chief financial officer, and from July 2014 to November 2015, she served as
the company secretary and authorized representative of Xiwang Special Steel Company Limited ( Гˮ
ʮ̡ ) (stock code: 1266) and Xiwang Property Holdings Company Limited (Ϟ
ʮ̡ ) (stock code: 2088), both companies of which were listed on the Main Board of the Stock
Exchange. From December 2016 to November 2021, Ms. Ng successively served as a consultant, an
executive director, the chief financial officer, the company secretary and an authorized representative of
China Public Procurement Ltd (ʮ̡ ) (now known as Cherish Sunshine International
Ltd (ʮ̡ )), a company listed on the Main Board of the Stock Exchange (Stock Code:
1094). Since December 2024, Ms. Ng has served as an independent non-executive director of New
Gonow Recreational V ehicles Inc. (ʮ̡ ), a company listed on the Stock Exchange
(stock code: 0805).
Ms. Ng obtained her bachelor’s degree of arts in accountancy in 1996, a master’s degree of
professional accounting in 2010, a master’s degree of corporate finance in 2013 from the Hong Kong
Polytechnic University. She further obtained a master of business administration degree (Executive
MBA program) from the Chinese University of Hong Kong in 2015. She is also a fellow member of the
Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified
Accountants, and The Hong Kong Chartered Governance Institute.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SUPERVISORY COMMITTEE
Our Supervisory Committee consists of three members. The following sets forth the biographies of
our Supervisors.
Name Age Position
Time of joining
our Group
Date of
appointment as
supervisor Roles and responsibilities
Relationship with
other Directors,
Supervisors and/
or Senior
management
Ms. BAI Xueting
(ͣ௛ణ )
45 Chairlady of our
Supervisory
Committee,
Supervisor
December 2003 November 2011 Responsible for the overall
operation of the
Supervisory Committee
and the supervision of
the Board, senior
management and the
business operations of
our Group
None
Mr. HE Zhuokai
(Оՙ⺍ )
48 Supervisor May 2008 November 2013 Responsible for the
supervision of the
Board, senior
management, the
business operations and
strategic management of
our Group
None
Mr. HU Guanhong
(҃ )
33 Supervisor September 2017 November 2022 Responsible for the
supervision of the
Board, senior
management, the
business operations and
financial management of
our Group
None
The PRC Company Law requires a joint stock company with limited liability to establish a
supervisory committee. Pursuant to our Articles, our Supervisory Committee consists of three members,
including one Shareholders representative and two employee representatives. Employee representatives
will be appointed and replaced via election by the employees and Shareholders representative will be
appointed and replaced via election at a Shareholders’ meeting. The appointment of the Supervisors is
for a term of three years, which is renewable upon re-election and re-appointment.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Ms. BAI Xueting ( ͣ௛ణ ), aged 45, was appointed as the Chairlady of the Supervisory
Committee in November 2011, and is primarily responsible for the overall operation of the Supervisory
Committee and the supervision of the Board, senior management and the business operations of our
Group.
Since December 2003, Ms. Bai has served as the head of the business department of our Company,
and is primarily responsible for supervision of the our Group’s business operations. Since September
2021, Ms. Bai has served as a supervisor of Stork Paper (Shanghai) Co., Ltd. (෫дॷุ (ɪऎ)ʮ
̡), and is primarily responsible for supervision of its board, senior management and the business
operations.
Ms. Bai graduated from Quanzhou Agricultural and Engineering School (ࣧi n
June 1998.
Mr . HE Zhuokai ( Оՙ⺍ ), aged 48, was appointed as a Supervisor of our Company in November
2013, and is primarily responsible for the supervision of the Board, senior management, the business
operations and strategic management of our Group.
From May 2008 to September 2022, Mr. He served as the head of the procurement department of
Langfang Jihong Packaging Limited* (ʮ̡ ). Since October 2022, Mr. He has
served as the manager of the procurement department of our Company, and has been primarily
responsible for procurement management. Mr. He currently serves as a supervisor of Langfang Jihong
Packaging Limited* (ʮ̡ ), Luanzhou Jihong Packaging Co., Limited* ( ᝒψΛ҃
ʮ̡ ), and Vstar Packaging (China) Limited* (ʮ̡ ).
Mr. He obtained a bachelor’s degree in Chinese from Sichuan Normal College (ᇍኪ৫ )i n
June 1997.
Mr . HU Guanhong (҃ ), aged 33, was appointed as a Supervisor of our Company in
November 2022, and is primarily responsible for the supervision of the Board, senior management, the
business operations and financial management of our Group.
From July 2014 to January 2016, Mr. Hu served as an accountant of Xinjiang Jiuding
Jinshengxiang Agricultural Products Development Co., Limited* (ʮ
̡). From February 2016 to August 2017, Mr. Hu worked as the finance manager of Shaanxi Hongtai
Furniture Co., Limited* (ʮ̡ ), and is primarily responsible for its internal audit and
budgeting. Since September 2017, Mr. Hu has served as the finance manager of Giikin (Xi’an) Digital
Technology Co., Limited* (Ι (Гτ)ʮ̡ ), and is primarily responsible for its
internal audit and budgeting.
Mr. Hu obtained a bachelor’s degree in accounting from Shangluo University (ኪ৫ )i nJ u n e
2014.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management and operation of our
business. The following sets forth the biographies of the members of our senior management.
Name Age Position
Time of joining
our Group
Date of
appointment as
senior
management Roles and responsibilities
Relationship with
other Directors,
Supervisors and/
or Senior
management
Ms. ZHUANG Hao
(୿ख)
55 General manager December 2003 December 2003 Responsible for the overall
management, strategic
and business
development of our
Group
Spouse of Mr.
Zhang Heping,
Sister of Mr.
Zhuang Shu;
Member of the
Single Largest
Group of
Shareholders
Mr. ZHANG Heping
(ੵձ̻ )
55 Deputy general
manager
February 2006 July 2010 Responsible for the overall
management, strategic
and business
development, and overall
management of
packaging business of
our Group
Spouse of Ms.
Zhuang Hao;
Member of the
Single Largest
Group of
Shareholders
Mr. ZHUANG Shu
(୿⤳)
53 Deputy general
manager
February 2006 November 2013 Responsible for the overall
management, strategic
and business
development, and
management of
packaging business of
our Group
Brother of
Ms. Zhuang
Hao; Member of
the Single
Largest Group of
Shareholders
Mr. ZHANG Luping
(ੵ༩̻ )
35 Secretary to
Board
December 2023 December 2023 Responsible for our
Group’s communication
with securities
regulatory authorities,
information disclosure,
operation of the
committees, investor
relations management,
and foreign investment
None
Mr. WU Minggui
(൮ )
53 Finance director April 2011 April 2013 Responsible for the
financial management
of our Group
None
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Ms. ZHUANG Hao ( ୿ख), is an executive Director and the general manager of our Company. For
her biographical details, please refer to “– Board – Executive Directors” in this section.
Mr . ZHANG Heping ( ੵձ̻ ), is an executive Director, the vice chairman and a vice general
manager of our Company. For his biographical details, please refer to “– Board – Executive Directors”
in this section.
Mr . ZHUANG Shu ( ୿⤳), is an executive Director and a vice general manager of our Company.
For his biographical details, please refer to “– Board – Non-executive Director” in this section.
Mr . ZHANG Luping ( ੵ༩̻ ), aged 35, has served as the Secretary to the Board of our Company
since December 2023, and is primarily responsible for our Group’s communication with securities
regulatory authorities, information disclosure, operation of the committees, investor relations
management, and foreign investment.
From July 2013 to May 2015, Mr. Zhang worked at Beijing Zhongmin Gas Co., Ltd. ( ̏ԯʕ͏ዷ
ʮ̡ ), a company principally engaged in gas production and supply. From July 2015 to April
2017, Mr. Zhang worked at Dalian Zeus Entertainment Co. Ltd. (ʮ̡ ) (now
known as Tianyu Digital Technology Co., Ltd. (Ҧ (ɽஹ)ʮ̡ ), a company
whose shares are listed on the SZSE (stock code: 002354), a digital technology company principally
engaged in e-games and data traffic. From April 2017 to January 2023, Mr. Zhang worked in PIESA T
Information Technology Co., Ltd. (ʮ̡ ), a company whose shares are
listed on the Shanghai Stock Exchange (stock code: 688066), where he served as a director from
January 2023 to November 2023.
Mr. Zhang obtained his bachelor’s degree in management from the Qingdao University (ɽኪ )
in the PRC in June 2013. He obtained his board secretary qualification certificate from the SZSE in
August 2016.
Mr . WU Minggui (൮ ), aged 53, joined our Company as a finance manager in April 2011, has
served as the finance director of our Company since April 2013, and is primarily responsible for the
financial management of our Company.
Prior to joining our Company, Mr. Wu worked at Xiamen Weilian Software Development Co.,
Limited* (ʮ̡ ), and from January 2008 to April 2011, Mr. Wu worked at
Xiamen Jinlian Logistics Co., Limited* (ʮ̡ ) as the manager of the planning and
finance department.
Mr. Wu obtained his college degree in accounting from Xiamen University (ɽኪ ) in the PRC
in June 2002. Mr. Wu has been a certified intermediate accountant in the PRC since May 2005.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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OTHER INFORMATION IN RELATION TO OUR DIRECTORS, SUPERVISORS AND SENIOR
MANAGEMENT
For details of our Directors’ respective interests or short positions (if any) in our Shares,
particulars of our Directors’ service agreements and Directors’ remuneration, please see “Appendix VI –
Statutory and General Information – C. Further Information about Our Directors and Substantial
Shareholders” in this Prospectus.
Save as disclosed herein, each of our Directors and Supervisors confirms with respect to himself
or herself, to the best of his or her knowledge, information and belief, that he or she (1) did not hold
other long positions or short positions in the Shares, underlying Shares, debentures of our Company or
any associated corporation (within the meaning of Part XV of the SFO) as of the Latest Practicable
Date; (2) had no other relationship with any Directors, Supervisors, senior management or substantial
shareholders of our Company as at the Latest Practicable Date; (3) did not hold any other directorships
in the three years prior to the Latest Practicable Date in any public companies of which the securities
are listed on any securities market in Hong Kong SAR and/or overseas; and (4) there are no other
matters concerning our Director’s appointment that need to be brought to the attention of our
Shareholders and the Stock Exchange or shall be disclosed pursuant to Rule 13.51(2)(h) to (v) of the
Listing Rules as of the Latest Practicable Date.
JOINT COMPANY SECRETARIES
Mr . LU Tashan ( ௔̴ʆ ), is an executive Director and a joint company secretary of our Company.
For his biographical details, please refer to “Board – Executive Directors” in this section.
Mr . LEE Chung Shing (ϓ ) is our joint company secretary. Mr. Lee has over 20 years of
experience in providing auditing, financial management, company secretarial and investor relations
services to listed companies in Hong Kong SAR. He is currently an assistant vice president of
Governance Services of Computershare Hong Kong Investor Services Limited and the joint company
secretary and the company secretary of various companies listed on the Stock Exchange.
Mr. Lee obtained his bachelor’s degree in accountancy from City University of Hong Kong in
December 1994 and a master’s degree in business administration (financial services) from The Hong
Kong Polytechnic University in November 2002. Mr. Lee is a member of the Hong Kong Institute of
Certified Public Accountants and a fellow member of the Association of Chartered Certified
Accountants.
BOARD COMMITTEES
Strategy Committee
The Strategy Committee of our Company consists of three Directors, namely Mr. Wang Y apeng,
Ms. Zhuang Hao and Mr. Han Jianshu. The chairperson of the Strategy Committee is Mr. Wang Y apeng.
The primary duties of the Strategy Committee of our Company include (but are not limited to):
• studying and regularly advising on our business objectives and medium- to long-term
development strategy in accordance with operation and the changes in the market;
• reviewing annual business plans and any material change or adjustment in implementation
and advise the Board accordingly;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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• regularly assessing and inspecting the implementation of the above issues after they have
been approved by the Board and report back to the Board; and
• handling other matters required by laws, regulations, rules, normative documents, regulatory
rules of the jurisdictions where the Shares of our Company are listed, the Articles of
Association or as authorized by the Board.
Audit Committee
Our Company has established an Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and paragraph C.3 of the Corporate Governance Code as set out in
Appendix C1 to the Listing Rules. The Audit Committee consists of three members, being Dr. Zhang
Guoqing, Ms. Ng Weng Sin and Dr. Y ang Chenhui. The chairperson of the Audit Committee is Dr. Zhang
Guoqing, who is an independent non-executive Director and Ms. Ng Weng Sin is an independent
non-executive Director with the appropriate accounting and related financial management expertise.
The primary duties of the Audit Committee include, among others:
• reviewing our compliance, accounting policies and financial reporting procedures;
• supervising the implementation of our internal audit system;
• advising on the appointment or replacement of external auditors;
• liaising between our internal audit department and external auditors; and
• other responsibilities as authorized by our Board.
Remuneration and Appraisal Committee
Our Company has established a Remuneration and Appraisal Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and paragraph B.1 of the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules. The Remuneration and Appraisal
Committee consists of three members, being Ms. Ng Weng Sin, Dr. Zhang Guoqing and Mr. Zhuang
Shu. The chairperson of the Remuneration and Appraisal Committee is Ms. Ng Weng Sin. The primary
duties of the Remuneration and Appraisal Committee include, among others:
• making recommendations to the Board on our policy and structure concerning remuneration
of our Directors and members of the senior management;
• making recommendations to the Board on the specific remuneration package of each Director
and members of the senior management;
• reviewing and approving compensations payable to executive Directors and members of
senior management for any loss or termination of office or appointment to ensure that it is
consistent with contractual terms and is otherwise fair and not excessive;
• reviewing and approving compensation arrangements relating to dismissal or removal of any
Director for his or her misconduct to ensure that such arrangements are consistent with
contractual terms and are otherwise reasonable and appropriate; and
• other responsibilities as authorized by our Board.
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Nomination Committee
Our Company has established a Nomination Committee with written terms of reference in
accordance with Rule 3.27A of the Listing Rules and paragraph A.5 of the Corporate Governance Code
as set out in Appendix C1 to the Listing Rules. The Nomination Committee consists of three members,
being Dr. Y ang Chenhui, Professor Alfred Sit Wing Hang and Mr. Zhang Heping. The chairperson of the
Nomination Committee is Dr. Y ang Chenhui. The primary duties of the Nomination Committee include,
among others:
• reviewing the structure, size and composition of the Board annually, and advising on any
changes of the Board proposed in accordance with the strategies of our Company;
• identifying, selecting or making recommendations to our Board on the selection of
individuals nominated for directorships;
• making recommendations to the Board on relevant matters relating to the appointment and
re-appointment of our Directors;
• assessing the independence of independent non-executive Directors; and
• other responsibilities as authorized by our Board.
CORPORATE GOVERNANCE
As of the Latest Practicable date and to the best of the knowledge, information and belief of our
Directors, having made all reasonable enquiries, the Directors are not aware of any deviation from
provisions in the Corporate Governance Code as set out in Appendix C1 to the Listing Rules.
BOARD DIVERSITY
We have adopted a board diversity policy which sets out the approach to achieve and maintain an
appropriate balance of diversity perspectives of our Board that are relevant to our business growth.
Selection of candidates will be based on a range of diversity perspectives, including but not limited to
gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge
and length of service. The ultimate decision will be based on merits and contribution that the selected
candidates will bring to the Board.
Our Directors have a balanced mix of knowledge and skills, including overall management and
strategic development, information technology, accounting and financial management. We have also
taken and will continue to take steps to promote gender diversity at all levels of our Company, including
but without limitation at the Board and senior management levels. In particular, two of our Directors
and one of our Supervisors are female. Taking into account our existing business modes and specific
needs as well as the different background of our Directors, we are of the view that the composition of
our Board satisfies our board diversity policy.
Our Nomination committee is responsible for ensuring the diversity of our Board. After the
Listing, our Nomination committee will review the board diversity policy from time to time to ensure its
continued effectiveness and we will disclose in our corporate governance report about the
implementation of the board diversity policy on annual basis.
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COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors, supervisors and senior management members receive compensation from our
Company in the form of salaries, bonuses, and other benefits in kind such as contributions to pension
plans.
For each year of the Track Record Period, the aggregate amounts of remuneration (including fees,
salaries, contributions to pension schemes, housing allowances and other allowances and benefits in
kind and discretionary bonuses) paid to our Directors and Supervisors, were approximately RMB8.14
million, RMB11.94 million and RMB19.04 million, respectively.
For each year of the Track Record Period, the five highest paid individuals, included nil, one and
one Director(s), respectively, whose remunerations are included in the aggregate amount of
remuneration set out above. For each year of the Track Record Period, the aggregate amount of
remuneration (including fees, salaries, contributions to pension schemes, housing allowances and other
allowances and benefits in kind and discretionary bonuses) for the remaining five, four and four highest
paid individuals who are not Directors of our Group were approximately RMB12.80 million, RMB16.30
million and RMB25.74 million, respectively.
It is estimated that remuneration equivalent to approximately RMB16.3 million in aggregate will
be paid to the Directors and Supervisors (inclusive of benefits in kind but exclusive of any discretionary
bonuses) by our Company for the year ending December 31, 2025 based on the arrangements currently
in force.
No remuneration was paid by our Company to the Directors or the five highest paid individuals as
inducement to join or upon joining our Company or as a compensation for loss of office during the
Track Record Period. Furthermore, none of the Directors had waived or agreed to waive any
remuneration during the Track Record Period.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not have any
interest in a business which competes or is likely to compete, either directly or indirectly, with our
Company’s business which would require disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to under
Rule 3.09D of the Listing Rules in January 2024, and (ii) understands his or her obligations as a director
of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his/her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he/she has no past
or present financial or other interest in the business of the Company or its subsidiaries or any
connection with any core connected person of the Company under the Listing Rules as of the Latest
Practicable Date, and (iii) that there are no other factors that may affect his/her independence at the
time of his/her appointments.
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COMPLIANCE ADVISER
We have appointed Fosun International Capital Limited as the compliance adviser pursuant to Rule
3A.19 of the Listing Rules, and the compliance advisor will advise our Company in the following
circumstances.
• before the publication of any regulatory announcement, circular or financial report;
• where a transaction, which might be a notifiable or connected transaction under the Listing
Rules, is contemplated, including share issues and share repurchases;
• where our Company proposes to use the proceeds of the Global Offering in a manner that is
different from that detailed in this Prospectus or where our business activities, developments
or results deviate from any forecasts, estimates or other information in this Prospectus; and
• where the Stock Exchange makes an inquiry of our Company regarding unusual movements
in the price or trading volume of the Shares or any other matters under Rule 13.10 of the
Listing Rules a false market in the Shares.
The terms of the appointment of the compliance adviser will commence on the Listing Date and is
expected to end on the date when our Company distributes the annual report of its financial results for
the first full financial year commencing after the Listing Date.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SUBSTANTIAL SHAREHOLDERS AS OF THE LATEST PRACTICABLE DATE
As at the Latest Practicable Date, our total share capital was RMB384,769,288 comprising
384,769,288 A Shares and the following persons directly or indirectly control, or are entitled to exercise
the control of, 5% or more of our A Shares:
Name of Shareholder Nature of interest Class
Number of
Shares
directly or
indirectly held
Approximate
percentage
of shareholding
in the relevant
class of Shares
Ms. Zhuang Hao Beneficial interest A Shares 69,623,082 18.09
Interest of person acting
in concert (1)
A Shares 53,866,003 14.00
Mr. Zhuang Shu Beneficial interest A Shares 34,671,025 9.01
Interest of person acting
in concert (1)
A Shares 88,818,060 23.08
Ms. He Jingying Beneficial interest A Shares 6,638,925 1.73
Interest of person acting
in concert (1)
A Shares 116,850,160 30.36
Mr. Zhang Heping Beneficial interest A Shares 6,236,125 1.62
Interest of person acting
in concert (1)
A Shares 117,252,960 30.47
Tibet Y ongyue (2) Beneficial interest A Shares 5,444,928 1.42
Interest of person acting
in concert (1)
A Shares 118,044,157 30.67
Mr. Zhuang Zhenhai Interest in a controlled
corporation (3)
A Shares 5,444,928 1.42
Interest of person acting
in concert (1)
A Shares 118,044,157 30.67
Mr. Lu Tashan Beneficial interest A Shares 875,000 (4) 0.23
Interest of person acting
in concert (1)
A Shares 122,614,085 31.86
SUBSTANTIAL SHAREHOLDERS
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Notes:
(1) Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and
Tibet Y ongyue are parties acting in concert. Please refer to “History and Corporate Structure – Our Shareholders
Acting in Concert” for further details.
(2) As of the Latest Practicable Date, Tibet Y ongyue was owned as to approximately 71.4% by Mr. Zhuang Zhenhai,
15.4% by Ms. Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.7% by Ms. Xu Ping.
(3) As of the Latest Practicable Date, Mr. Zhuang Zhenhai owned approximately 71.4% of the shares in Tibet Y ongyue.
Therefore, Mr. Zhuang Zhenhai was deemed to be interested in the Shares held by Tibet Y ongyue under the SFO.
(4) The relevant Shares held by Mr. Lu Tashan consisted of (i) 306,250 A Shares granted under the 2023 Restricted
Share Incentive Plan which were released from lock-up in accordance with the 2023 Release Mechanism on October
23, 2024; and (ii) 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan. Please refer
to “History and Corporate Structure – Our Corporate History – Adoption of the 2023 Restricted Share Incentive
Plan” for further details.
SUBSTANTIAL SHAREHOLDERS UPON LISTING
Immediately following the completion of the Global Offering, our share capital will comprise
384,769,288 A Shares and 67,910,000 H Shares, representing approximately 85% and 15% of the total
issued share capital of our Company, respectively.
So far as our Directors are aware, immediately following the completion of the Global Offering,
the following persons are expected to have an interest and/or short positions (as applicable) in the
Shares or the underlying Shares of our Company which would fall to be disclosed to our Company and
the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or will be, directly
or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights
to vote in all circumstances at general meetings our Company:
Name of Shareholder Nature of interest Class
Number of
Shares directly
and indirectly
held
immediately
following the
completion of
the Global
Offering
Approximate
percentage of
shareholding
in the relevant
class of Shares
immediately
following the
completion of
the Global
Offering (1)
Approximate
percentage of
shareholding
in the
total issued
share capital
immediately
following the
completion of
the Global
Offering (1)
Ms. Zhuang Hao Beneficial interest A Shares 69,623,082 18.09 15.38
Interest of person acting
in concert (2)
A Shares 53,866,003 14.00 11.89
Mr. Zhuang Shu Beneficial interest A Shares 34,671,025 9.01 7.66
Interest of person acting
in concert (2)
A Shares 88,818,060 23.08 19.61
SUBSTANTIAL SHAREHOLDERS
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Name of Shareholder Nature of interest Class
Number of
Shares directly
and indirectly
held
immediately
following the
completion of
the Global
Offering
Approximate
percentage of
shareholding
in the relevant
class of Shares
immediately
following the
completion of
the Global
Offering (1)
Approximate
percentage of
shareholding
in the
total issued
share capital
immediately
following the
completion of
the Global
Offering (1)
Ms. He Jingying Beneficial interest A Shares 6,638,925 1.73 1.47
Interest of person acting
in concert (2)
A Shares 116,850,160 30.36 25.80
Mr. Zhang Heping Beneficial interest A Shares 6,236,125 1.62 1.38
Interest of person acting
in concert (2)
A Shares 117,252,960 30.47 25.89
Tibet Y ongyue (3) Beneficial interest A Shares 5,444,928 1.42 1.20
Interest of person acting
in concert (1)
A Shares 118,044,157 30.67 26.07
Mr. Zhuang Zhenhai (4) Interest in a controlled
corporation (4)
A Shares 5,444,928 1.42 1.20
Interest of person acting
in concert (2)
A Shares 118,044,157 30.67 26.07
Mr. Lu Tashan Beneficial interest A Shares 875,000 (5) 0.23 0.19
Interest of person acting
in concert (2)
A Shares 122,614,085 31.86 27.08
Notes:
(1) The calculation is based on the total number of 384,769,288 A Shares and 452,679,288 Shares in issue immediately
following the completion of the Global Offering.
(2) Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and
Tibet Y ongyue are parties acting in concert and are our Single Largest Group of Shareholders. Please refer to
“History and Corporate Structure – Our Shareholders Acting in Concert” for further details.
(3) As of the Latest Practicable Date, Tibet Y ongyue was owned as to approximately 71.4% by Mr. Zhuang Zhenhai,
15.4% by Ms. Gong Hongying, 11.4% by Mr. Li Jiadong, and 1.7% by Ms. Xu Ping.
(4) As of the Latest Practicable Date, Mr. Zhuang Zhenhai owned approximately 71.43% of the shares in Tibet Y ongyue.
Therefore, Mr. Zhuang Zhenhai was deemed to be interested in the Shares held by Tibet Y ongyue under the SFO.
SUBSTANTIAL SHAREHOLDERS
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(5) The relevant Shares held by Mr. Lu Tashan consisted of (i) 306,250 A Shares granted under the 2023 Restricted
Share Incentive Plan which were released from lock-up in accordance with the 2023 Release Mechanism on October
23, 2024; and (ii) 568,750 restricted A Shares granted under the 2023 Restricted Share Incentive Plan. Please refer
to “History and Corporate Structure – Our Corporate History – Adoption of the 2023 Restricted Share Incentive
Plan” for further details.
Save as disclosed above and in “Statutory and General Information – C. Further Information about
our Directors and Substantial Shareholders” in Appendix VI to this Prospectus, our Directors are not
aware of any person who will, immediately following the completion of the Global Offering, have an
interest or short position in the Shares or underlying Shares which will be required to be disclosed to
our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO
or will be, directly or indirectly, interested in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of our Company.
As at the Latest Practicable Date, we are not aware of any arrangement which may result in any
change of control in our Company at any subsequent date.
SUBSTANTIAL SHAREHOLDERS
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This section presents certain information regarding our share capital prior to and following the
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, our registered and issued share capital was RMB384,769,288
comprising 384,769,288 A Shares at the nominal value of RMB1.00 each, all of which are listed on the
SZSE.
Number of
Shares
Issued share
capital
(%)
A Shares in issue 384,769,288 100
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Global Offering, our registered and issued share capital
will be as follows:
Number of
Shares
Approximate
percentage of
issued share
capital
(%)
A Shares in issue 384,769,288 85
H Shares in issue 67,910,000 15
Total 452,679,288 100
SHARE CLASSES
Upon completion of the Global Offering, we will have two classes of Shares: (i) domestic Shares,
namely A Shares (PRC listed Shares issued and subscribed for in RMB within the PRC); and (ii)
overseas listed Shares, namely H Shares (overseas listed foreign invested Shares listed in Hong Kong).
A Shares and H Shares are all ordinary Shares in the share capital of our Company. However, apart from
certain qualified domestic institutional investors in the PRC and the qualified PRC investors under the
Shenzhen-Hong Kong Stock Connect, H Shares generally cannot be subscribed for by or traded between
legal or natural persons of the PRC. On the other hand, A Shares can only be subscribed for by and
traded between legal or natural persons of the PRC, qualified foreign institutional investors or qualified
foreign strategic investors approved by the CSRC or the Hong Kong and overseas investors under the
Shenzhen-Hong Kong Stock Connect and must be subscribed for and traded in RMB. A Shares and H
Shares are regarded as different classes of shares under our Articles of Association. The rights conferred
on any class of Shareholders may not be varied or abrogated unless approved by a special resolution of
the general meeting of Shareholders. The circumstances which shall be deemed to be a variation or
abrogation of the rights of a class are listed in “Summary of the Articles of Association of the
Company” in Appendix V to this Prospectus.
SHARE CAPITAL
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The difference between the two classes of shares and provisions on class rights, the dispatch of
notices and financial reports to Shareholders, dispute, resolution, registration of Shares on different
registers of Shareholders, the method of share transfer and appointment of dividend receiving agents are
set out in the Articles of Association and summarized in “Summary of the Articles of Association of the
Company” in Appendix V to this Prospectus.
Except for the differences above, A Shares and H Shares will however rank pari passu with each
other in all other respects and, in particular, will rank equally for all dividends or distributions declared,
paid or made after the date in this Prospectus. All dividends in respect of the H Shares are to be
calculated in RMB and paid by us in Hong Kong dollars whereas all dividends in respect of A Shares are
to be paid by us in RMB. In addition to cash, dividends may be distributed in the form of Shares. For
holders of H Shares, dividends in the form of Shares will be distributed in the form of additional H
Shares. For holders of A Shares, dividends in the form of Shares will be distributed in the form of
additional A Shares.
APPROV AL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL OFFERING
We have obtained approval from our holders of A Shares to issue H Shares and seek the listing of
H Shares on the Stock Exchange. Such approval was obtained at the general meetings of our Company
held on February 2, 2024 upon, among other things, the following major terms:
(1) Size of the offer
The proposed number of H Shares to be offered initially shall not exceed 67,910,000 H Shares,
representing approximately 15% of the total issued number of shares as enlarged by the H Shares to be
issued pursuant to the Global Offering.
(2) Method of offering
The method of offering shall be by way of a public offer for subscription in Hong Kong SAR and
an international offering to institutional and professional investors.
(3) Target investors
The H Shares shall be issued to professional organizations, institutions individual investors and
the public.
(4) Price determination basis
The issue price of the H Shares will be determined after due consideration of the interests of
existing Shareholders, the acceptance of investors and issuance risks and in accordance with
international practices through the demands for orders and book building process, subject to the
domestic and overseas capital market conditions and by reference to the valuation level of comparable
companies in domestic and overseas markets.
SHARE CAPITAL
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(5) Validity period
The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange shall be
completed within 18 months from the date when the Shareholders’ meeting was held on February 2,
2024.
There is no other approved offering plans for our Shares except the Global Offering.
2023 RESTRICTED SHARE INCENTIVE PLAN
On August 30, 2023, we adopted the 2023 Restricted Share Incentive Plan. Please see “Statutory
and General Information – E. 2023 Restricted Share Incentive Plan” in Appendix VI to this Prospectus
for further details.
SHAREHOLDERS’ GENERAL MEETINGS AND CLASS MEETINGS
For details of circumstances under which our general Shareholders’ meeting and classified
Shareholders’ meeting are required, see “Summary of the Articles of Association of the Company” in
Appendix V to this Prospectus and “Summary of Principal PRC and Hong Kong SAR Legal and
Regulatory Provisions” in Appendix IV to this Prospectus.
SHARE CAPITAL
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You should read the following discussion and analysis in conjunction with our consolidated
financial information as of and for the three financial years ended December 31, 2022, 2023 and
2024 included in the Accountants’ Report set out in Appendix IA to this Prospectus, together with the
accompanying notes. Our consolidated financial information has been prepared in accordance with
the IFRS Accounting Standards (“ IFRS ”) issued by the International Accounting Standards Board
(“IASB ”).
The following discussion and analysis contain forward-looking statements that reflect our
current views with respect to future events and financial performance that involve risks and
uncertainties. These statements are based on assumptions and analysis made by us in light of our
experience and perception of historical events, current conditions and expected future developments,
as well as other factors we believe are appropriate under the circumstances. In evaluating our
business, you should carefully consider the information provided in this Prospectus including but not
limited to the sections headed “Risk Factors” and “Business” in this Prospectus.
OVERVIEW
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. After our listing on the SZSE in 2016, supported by the leadership and industry
experience of our management team, we successfully transformed and diversified our business while
attaining achievements from both business and financial perspectives. As a leading cross-border social
e-commerce company strategically focusing on the Asian market, we ranked second among China’s B2C
outbound e-commerce players based on revenue generated through social media e-commerce business in
Asia in 2024, with a market share of 1.3%, according to CIC. Furthermore, we are a leading FMCG
paper packaging company in Mainland China, and ranked first among FMCG paper consumer packaging
companies in Mainland China based on revenue in 2024, with a market share of 1.2%, according to CIC.
Founded in 2003, we set out on providing one-stop paper packaging products and services to
FMCG enterprise customers, focusing on providing marketing strategies, product design, process
design, technology planning, transportation and logistics. As the core of our paper packaging business is
essentially grounded in product design and marketing that ultimately center around addressing end
consumers’ needs and spur their purchase desires, we have accumulated deep understanding and
experience in both product marketing and discerning consumer demands. Seeking to expand our
business beyond our decades-long paper packaging business, we seized the business opportunities from
the burgeoning of cross-border e-commerce driven by the development of the mobile Internet by
building our cross-border social e-commerce business in 2017, which has become our major source of
revenue. For each year of the Track Record Period, our total revenue amounted to RMB5,375.9 million,
RMB6,694.7 million and RMB5,529.3 million, respectively. During the same periods, our profit
amounted to RMB171.6 million, RMB332.1 million and RMB184.5 million, respectively.
BASIS OF PRESENTATION
The historical financial information has been prepared in accordance with IFRS, which comprise
all standards and interpretations approved by the IASB.
All IFRSs effective for the accounting period commencing from January 1, 2024, together with the
relevant transitional provisions, have been consistently applied by us in the preparation of the historical
financial information throughout the Track Record Period.
FINANCIAL INFORMA TION
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The historical financial information has been prepared under the historical cost convention, except
for certain trade and bills receivables at fair value through other comprehensive income, certain time
deposits at fair value through profit or loss, certain financial assets at fair value through profit or loss,
financial assets at fair value through other comprehensive income and equity investments designated at
fair value through other comprehensive income which have been measured at fair value.
We have prepared the historical financial information on the basis that we will continue to operate
as a going concern.
For more information on the basis of preparation of the financial information included herein,
please refer to Note 2.1 of the Accountants’ Report in Appendix IA to this Prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, affected by a number of
factors. The following are the principal factors that have affected, and we expect will continue to affect,
our business, financial condition, results of operations and prospects.
Global Macro Environment and Consumer and Business Spending
We operate a cross-border social e-commerce business which sells products to consumers around
the world, with a strategic focus on Asia, and an FMCG paper packaging business which provides
one-stop paper packaging products and services to leading FMCG companies in Mainland China as well
as abroad. Our business and operating results are therefore affected by global economic conditions,
including overall global economic growth and the level of per capita disposable income, growth of
end-markets, international trade policies and tariffs, among other things. Unfavorable changes in the
global economic conditions and consumer and business spending could negatively affect demand for our
products and services and materially and adversely affect our results of operations.
Our two businesses are also particularly affected by factors that affect their respective industries,
namely the global cross-border social e-commerce industry and the packaging industry in Mainland
China:
Our cross-border social e-commerce business. We are a leading China’s cross-border social
e-commerce company strategically focusing on the Asian market. As a result, the results of our
cross-border social e-commerce business are affected by changes in the global B2C cross-border social
e-commerce industry in general and in the Asian market specifically. For details, see “Industry
Overview – Overview of China’s B2C Outbound Social Media E-commerce Business in the Asian
Market”.
The global B2C cross-border social e-commerce industry is driven by the increase in the Internet
and mobile penetration rate, which has led to an increasing number of consumers around the world
becoming accustomed to a digital purchasing experience, including receiving and responding to
advertising through social media platforms. Riding on the above trends, our revenue from our
cross-border social e-commerce business experienced remarkable growth from 2022 to 2023, increasing
by 37.0% from RMB3,106.6 million in 2022 to RMB4,256.6 million in 2023. Our revenue from our
cross-border social e-commerce business decreased by 20.9% from RMB4,256.6 million in 2023 to
RMB3,365.9 million in 2024, which is primarily resulted from intensified market competition and
exchange rate fluctuations in certain regions.
FINANCIAL INFORMA TION
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We expect that the continued growth in the B2C cross-border social e-commerce industry both in
Asia and globally will continue to spur our future growth. From 2024 to 2029, the size of China’s B2C
outbound social media e-commerce business in the Asian market, as measured by revenue, is expected
to grow at a CAGR of 19.0%, according to CIC. As a leading China’s cross-border social e-commerce
company in the Asian market, we believe we are well positioned to capture this significant growth.
Our paper packaging business. We were the leading FMCG paper consumer packaging company
in Mainland China based on revenue in 2024, according to CIC. Therefore, the results of our paper
packaging business are affected by the FMCG paper consumer packaging industry in Mainland China.
For details, see “Industry Overview – Overview of FMCG Paper Consumer Packaging Market in
Mainland China.”
The FMCG paper consumer packaging industry in Mainland China is driven by acceleration in the
introduction of new product releases, environmental policies expanding the utilization of paper
packaging and enhanced added value of packaging. As a result, the utilization of paper packaging
products has steadily increased in recent years and is expected to continue to rise. According to CIC, the
market size of FMCG paper consumer packaging business in Mainland China is expected to experience
sustained expansion, reaching RMB222.7 billion by 2029.
Furthermore, processing fee of FMCG paper consumer packaging in Mainland China is expected
to contribute a greater percentage of the selling price moving forward. As our focus is on providing
one-stop paper packaging products and services covering marketing strategies, product design, process
design and technology planning, production, to transportation and logistics, we believe we are well
positioned to capture a greater proportion of the growth in FMCG paper consumer packaging in
Mainland China.
Discovery and Pricing of Products
We sell a broad range of products worldwide under both businesses. Under our cross-border social
e-commerce business, leveraging data analysis capabilities empowered by AI technologies, our product
discovery team is able to continuously test the waters and discover the best matching SKUs to achieve a
higher gross profit margin. Therefore, our ability to discover and price popular products and accurately
identify, anticipate consumer trends and adapt to any changes in a timely manner is of great importance
to our market performance. For more details on how we apply our data analytical capabilities in product
discovery, see “Business – Our Cross-border Social E-commerce Business – Product Discovery.” By
strategically targeting consumers, we seek to implement an optimized price strategy to achieve a higher
gross profit margin. For each year of the Track Record Period, the gross profit margin of our
cross-border social e-commerce business was 59.1%, 63.1% and 60.5%, respectively. Our ability to
timely respond to consumer preferences could affect the efficacy of our advertising spending for our
cross-border social e-commerce business, which could affect our ability to attract and maintain
enterprise customers and our business profitability, which may in turn affect our business, financial
condition and results of operations. See “Risk Factors – Risks Relating to Our Business and Industry –
We may not be able to identify and respond to changes in consumption trends and consumer preferences
and market demand in a timely manner.”
FINANCIAL INFORMA TION
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Relationship with Our Strategic FMCG Customers
We have been in the paper packaging business since our inception for more than 20 years. As we
have grown our paper packaging business, we have established and maintained long-term relationships
with our packaging enterprise customers. Our historical growth was mainly driven by our ability to
deepen our relationships with existing enterprise customers and grow our strategic enterprise customer
base.
Future growth in our paper packaging business will depend on our ability to maintain and deepen
relationships with our enterprise customers. Our enterprise customers primarily include FMCG
companies in Mainland China and overseas. Substantially all of our five largest customers for each year
during the Track Record Period were customers for our paper packaging business. Accordingly, changes
in relationship with our FMCG enterprise customers may affect our results of operation and financial
condition.
We are committed to expanding our cooperation with enterprise customers. We are among a
limited number of FMCG paper packaging companies that have the capability to provide one-stop paper
packaging products and services covering marketing strategies, product design, process design,
technology planning, transportation and logistics. We continuously pre-empt enterprise customer needs
by innovating in materials, designs, process and products. Exemplifying our commitment to
environmental protection and ESG, we prospectively invested in developing environmentally friendly
packaging, following the increasing global prevalence of restrictions on plastic use, allowing us to
expand our product portfolio to better cater to the needs of our enterprise customers. We expect to
continue to innovate and develop new paper packaging products that address and adapt to our enterprise
customers’ needs, while also taking into consideration their budgets. Our ability to continue to perform
the foregoing will affect our relationship with our enterprise customers, and in turn affect our results of
operations and financial performance.
Ability to Control Costs and Expenses
Our ability to control costs and expenses in both our cross-border social e-commerce business and
paper packaging business has been affected by recent inflationary trends. According to CIC, a
worldwide increase in inflation began in mid-2021, with many countries seeing their highest inflation
rates in decades. It has been attributed to various causes, including pandemic-related economic
dislocation, supply chain problems, the fiscal and monetary stimuli provided in 2020 and 2021 by
governments and central banks around the world in response to the pandemic, and price gouging. In
countries and regions in Asia excluding Mainland China, the Consumer Price Index increased by 7.7%
between 2021 and 2022, driven by price increases for gasoline, food, and housing. These general
inflationary pressures could impact the operational and procurement costs of our businesses.
Our cross-border social e-commerce business. During the Track Record Period, we incurred cost
of sales associated with our cross-border social e-commerce business as well as advertising costs as part
of selling our e-commerce products. Our ability to control such costs and expenses may significantly
affect our profitability.
FINANCIAL INFORMA TION
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Cost of sales associated with cross-border social e-commerce business refers to the cost to
purchase products from our suppliers for cross-border social e-commerce business. For each year of the
Track Record Period, cost of sales associated with cross-border social e-commerce business amounted
to RMB1,269.8 million, RMB1,571.7 million and RMB1,329.1 million, representing 39.7%, 43.8% and
42.8% of our total cost of sales, respectively. We manage our supply chain for our cross-border social
e-commerce business through maintaining a certain level of inventory for specific products and
purchasing products from suppliers after we receive orders form our customers if the ordered product is
not available in our warehouses. As testament to the efficacy of our supply chain management
capabilities, for each year of the Track Record Period, for our cross-border social e-commerce business,
our inventory to sales ratio ranges between 3.2% to 4.0%, which was below the industry average,
according to CIC.
In addition, our advertising costs, which mainly consist of costs associated with placing
advertisement on social media platforms, increased by 50.3% from RMB1,491.4 million in 2022 to
RMB2,242.2 million in 2023, and decreased by 21.5% from RMB2,242.2 million in 2023 to
RMB1,761.1 million in 2024. For each year of the Track Record Period, advertising costs accounted for
94.7%, 95.7% and 95.2% of our total selling and marketing expenses, respectively, and 48.0%, 52.7%
and 52.3% of our total revenue of our cross-border social e-commerce business, respectively. We expect
advertising cost will continue to contribute a vast majority of our total selling and marketing costs in the
foreseeable future. The effectiveness of our marketing activities largely depends on our analytical
capabilities to select relevant products for our consumers and to accurately target our advertisement on
the social media platforms. If these marketing activities prove ineffective or if the policies of the social
media platforms shift unfavorably affecting the effectiveness of our marketing activities, it could affect
our ability to reach and engage our target consumers effectively and affect our ability to implement our
business model and strategies. Our profitability, performance and financial results will depend on,
among other things, the strong and stable business relationship between us and digital marketing service
providers as well as social media platforms.
Our paper packaging business. For each year of the Track Record Period, raw material costs
associated with our paper packaging business amounted to RMB1,309.9 million, RMB1,326.4 million
and RMB1,312.5 million, representing 77.9%, 77.9% and 76.1% of our total cost of sales of our paper
packaging business, respectively. The manufacture of our packaging products requires the use of raw
paper and other auxiliary raw materials, as a result, our cost of sales may be affected by fluctuations in
the price of raw paper. Due to macroeconomic conditions, supply and demand, as well as changes in
global pulp future market, the price of white cardboard underwent substantial fluctuations from 2020 to
2024. Particularly in 2021, the price of white cardboard surged to its highest level in nearly five years,
driven by the upward movement in pulp prices upstream, which exerted a pronounced influence on both
costs and pricing dynamics within the FMCG paper consumer packaging industry. For further details,
see “Industry Overview – Overview of FMCG Paper Consumer Packaging Market in Mainland China –
Historical Trends of Prices on Major Raw Materials of FMCG Paper Consumer Packaging Industry in
Mainland China.” During the Track Record Period, in general, we were able to pass on most of the
changes in raw paper prices to our enterprise customers and our gross profit margins had not been
materially adversely affected by the fluctuation of raw paper prices during the Track Record Period.
FINANCIAL INFORMA TION
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A sensitivity analysis on the fluctuation of the raw paper costs included in our cost of sales during
the Track Record Period is set forth below, which illustrates the hypothetical effects on our gross profit
with 5%, 10% and 15% increase or decrease in raw paper costs:
For the year ended December 31,
2022 2023 2024
Change
in gross
profit
% change in
gross profit
Change
in gross
profit
% change in
gross profit
Change
in gross
profit
% change in
gross profit
In RMB in millions, except for percentages
% change in raw paper costs
+15% -196.5 -9.0% -199.0 -6.4% -196.7 -8.1%
+10% -131.0 -6.0% -132.7 -4.3% -131.1 -5.4%
+5% -65.5 -3.0% -66.3 -2.1% -65.6 -2.7%
-5% 65.5 3.0% 66.3 2.1% 65.6 2.7%
-10% 131.0 6.0% 132.7 4.3% 131.1 5.4%
-15% 196.5 9.0% 199.0 6.4% 196.7 8.1%
Foreign Exchange Rate Fluctuation
Our sales to consumers in our cross-border social e-commerce business are denominated and
settled in currencies of the countries to which we sell our products, primarily Japan, South Korea,
Thailand and Saudi Arabia and, from time to time, such amounts are converted into U.S. dollars. We
mainly pay our suppliers for our cross-border social e-commerce business in Renminbi. For our paper
packaging business, our sales are denominated and settled in Renminbi, and we pay our suppliers in
Renminbi. As a result, changes in the exchange rates between the foreign currencies, in particular the
U.S. dollar and Renminbi, and between the U.S. dollar and Renminbi, could affect our results of
operations and competitiveness against overseas sellers. We recorded foreign exchange gains of
RMB10.7 million and RMB1.0 million in 2022 and 2023, respectively. We recorded foreign exchange
losses of RMB3.5 million in 2024.
The value of the Renminbi against the U.S. dollar and other foreign currencies may fluctuate due
to a number of factors, all of which are beyond our control. Any depreciation of the foreign currencies
against Renminbi may have a negative impact on our gross profit while any appreciation of the foreign
currencies may have a positive impact on our gross profit. We may choose to mitigate the impact of a
depreciation of the foreign currencies by increasing our products’ selling prices after taking the
competitive landscape of our products into consideration. To mitigate our foreign exchange risk, we
have adopted a prudent foreign exchange hedging policy. See “– Market Risks – Foreign Currency
Risk”. However, we may not be able to effectively mitigate the impact of foreign exchange rate
fluctuation, and even if we are able to mitigate such impact, the price competitiveness of our products
may be affected. See “Risk Factors – Risks Relating to Our Business and Industry in the Principal Place
of Our Business – We are subject to risks associated with foreign exchange rate fluctuations.”
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HISTORICAL IMPACTS OF THE COVID-19 PANDEMIC
Since the end of December 2019, the outbreak of a novel strain of coronavirus, or COVID-19, has
affected the global economy. In response to the COVID-19 pandemic, including the recurrence of the
Omicron variant of COVID-19 since the end of 2021 across the world, governments had implemented
numerous measures to contain the spread of the virus, including mandatory quarantine, closure of
workplaces and facilities, travel bans and restrictions and stay-at-home orders.
We encountered various challenges due to the impact of COVID-19. For instance, certain of our
employees were subject to quarantine requirements imposed on particular areas and were not allowed to
work onsite. Furthermore, we have incurred additional costs as a result of implementing various actions
to alleviate the impact of COVID-19, such as offering accommodation and food and disseminating
personal protective equipment to our employees.
Despite the impact mentioned above, neither our operations nor our financial performance were
materially and adversely affected by the COVID-19 pandemic during the Track Record Period. Our
revenue generated from cross-border social e-commerce business increased by 37.0% from RMB3,106.6
million in 2022 to RMB4,256.6 million in 2023. In 2024, our revenue of cross-border social
e-commerce business was RMB3,365.9 million. For each year of the Track Record Period, our
cross-border social e-commerce business had a gross profit of RMB1,836.8 million, RMB2,684.9
million and RMB2,036.8 million, respectively, with a gross profit margin of 59.1%, 63.1% and 60.5%
during the same periods.
In terms of our paper packaging business, our revenue increased by 5.8% from RMB1,982.6
million in 2022 to RMB2,096.6 million in 2023, and remained relatively stable at RMB2,099.5 million
in 2024. For each year of the Track Record Period, our paper packaging business had a gross profit of
RMB300.5 million, RMB393.2 million and RMB375.2 million, respectively, with a gross profit margin
of 15.2%, 18.8% and 17.9% during the same periods.
Additionally, the outbreak of the pandemic impacted consumption patterns to gradually move from
offline to online, especially in 2022, being the peak periods of the pandemic. Such trend boosted the
growth of e-commerce players, including us. We have seen increasing user acceptance of online
purchase, which positively affected the number of fulfilled orders under our cross-border social
e-commerce business. In line with this trend, the number of our fulfilled orders increased from 11.7
million in 2022 to 16.4 million in 2023. Furthermore, in 2024, the number of our fulfilled orders
amounted to 13.8 million. Our paper packaging business has also achieved steady business growth, as
evidenced by the growth of production volume during the Track Record Period. The production volume
of our paper packaging business increased from 846.7 million sq.m. in 2022 to 925.3 million sq.m. in
2023, and further to 1,026.1 million sq.m. in 2024.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We prepare our consolidated financial information in accordance with IFRS, which requires us to
make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities on
the date of the consolidated financial information and the reported amounts of revenue and expenses
during the financial reporting period. We continuously evaluate these estimates and assumptions based
on the most recently available information, our own historical experiences and on various other
assumptions that are believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. As the use of estimates is an integral component of the financial reporting
process, actual results in subsequent financial reporting that differ from estimates could result in
deviations from previous financial reporting. We consider the policies and estimates discussed below to
be critical to an understanding of our consolidated financial information as their application places the
most significant demands on our management’s judgment. For details of our material accounting policy
information and estimates, see Notes 2 and 3 to the Accountants’ Report in Appendix IA to this
Prospectus.
Material Accounting Policy Information
Revenue Recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which we expect to be
entitled in exchange for those goods or services.
Based on historical experiences, we estimate the amount of variable consideration including sales
return using the expected value method. The amounts relating to the unconditional sales return are
insignificant to our total revenue for each of the periods in the Track Record Period. We primarily
generate our revenue from the operation of cross border social e-commerce as well as production and
sales of packaging products. Further details of our revenue recognition policy are as follows:
(a) Cross-border social e-commerce
Revenue from cross border social e-commerce is recognized at a point in time when control
of the products is transferred to the customer, generally on delivery and acceptance of the products
by the customers.
(b) Sale of packaging products
Revenue from the sale of packaging products is recognized at a point in time when control of
the asset is transferred to the customer, generally on delivery and acceptance of the packaging
products by the customers.
(c) Services
Revenue from services is recognized at the point in time, when the services are provided and
accepted by customers.
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Other income
Interest income is recognized on an accrual basis using the effective interest method by applying
the rate that exactly discounts the estimated future cash receipts over the expected life of the financial
instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Dividend income is recognized when the shareholders' right to receive payment has been
established, it is probable that the economic benefits associated with the dividend will flow to us and the
amount of the dividend can be measured reliably.
Property, Plant and Equipment and Depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset to its
working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation,
such as repairs and maintenance, is normally charged to profit or loss in the period in which it is
incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection
is capitalized in the carrying amount of the asset as a replacement. Where significant parts of property,
plant and equipment are required to be replaced at intervals, we recognize such parts as individual
assets with specific useful lives and depreciate them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property,
plant and equipment to its residual value over its estimated useful life. The principal annual rates used
for this purpose are as follows:
Category Principal annual rates (%)
Buildings 3.17-9.50
Leasehold improvements 8.33-50.00
Machinery 9.50-19.00
Motor vehicles 19.00
Other equipment 19.00
Where parts of an item of property, plant and equipment have different useful lives, the cost of that
item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual
values, useful lives and the depreciation methods are reviewed, and adjusted if appropriate, at least at
each financial year end.
An item of property, plant and equipment including any significant part initially recognized is
derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss on disposal or retirement recognized in profit or loss in the year the asset is
derecognised is the difference between the net sales proceeds and the carrying amount of the relevant
asset.
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Construction in progress represents a building under construction, which is stated at cost less any
impairment losses, and is not depreciated. Cost comprises the direct costs of construction and
capitalized borrowing costs on related borrowed funds during the period of construction. Construction
in progress is reclassified to the appropriate category of property, plant and equipment when completed
and ready for use.
Intangible Assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value at the date of acquisition. The
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are subsequently amortized over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for an intangible asset with a finite useful life are reviewed at least at each
financial year end.
Patents and licenses
Purchased patents and licenses are stated at cost less any impairment losses and are amortized on
the straight-line basis over their estimated useful lives of 5 to 20 years.
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only when
we can demonstrate the technical feasibility of completing the intangible asset so that it will be
available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset
will generate future economic benefits, the availability of resources to complete the project and the
ability to measure reliably the expenditure during the development. Product development expenditure
which does not meet these criteria is expensed when incurred.
Deferred development costs are stated at cost less any impairment losses and are amortized using
the straight-line basis over the commercial lives of the underlying products not exceeding five to seven
years, commencing from the date when the products are put into commercial production.
Software
Software is stated at cost less any impairment losses and is amortized on the straight-line basis
over its estimated useful life of 5 to 10 years based on our past experiences and different purposes on
usages of the software and the authorized period for such uses.
The estimated useful life of other intangible assets is determined by considering the period of the
economic benefits to us or the periods of validity of intangible assets protected by the relevant laws, as
well as by referring to the industry practice.
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Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on the
weighted average basis and, in the case of work in progress and finished goods, comprises direct
materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on
estimated selling prices less any estimated costs to be incurred to completion and disposal.
Leases
We assess at contract inception whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
Our Group as a lessee
We apply a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. We recognize lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognized at the commencement date of the lease (that is the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized,
initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the
shorter of the lease terms and the estimated useful lives of the assets as follows:
Properties 2 to 10 years
Land use rights 44 to 50 years
If ownership of the leased asset transfers to us by the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the
asset.
(b) Lease liabilities
Lease liabilities are recognized at the commencement date of the lease at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by us and payments of penalties for termination of the lease, if the lease
term reflects us exercising the option to terminate the lease. The variable lease payments that do
not depend on an index or a rate are recognized as an expense in the period in which the event or
condition that triggers the payment occurs.
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In calculating the present value of lease payments, we use our incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in lease payments (e.g., a change to future lease payments resulting from a change in an
index or rate) or a change in assessment of an option to purchase the underlying asset.
(c) Short-term leases
We apply the short-term lease recognition exemption to its short-term leases of properties
and machinery (that is those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option).
Lease payments on short-term leases are recognized as an expense on a straight-line basis
over the lease term.
Investments in Associates
An associate is an entity in which we have a long term interest of generally not necessary not less
than 20% of the equity voting rights and over which we have significant influence. Significant influence
is the power to participate in the financial and operating policy decisions of the investee, but is not
control over those policies.
Our investments in associates are stated in the consolidated statement of financial position at our
share of net assets under the equity method of accounting, less any impairment losses.
Our share of the post-acquisition results and other comprehensive income of associates is included
in the consolidated statement of profit or loss and consolidated other comprehensive income,
respectively. In addition, when there has been a change recognized directly in the equity of the
associate, we recognize our share of any changes, when applicable, in the consolidated statement of
changes in equity. Unrealised gains and losses resulting from transactions between us and our associates
are eliminated to the extent of our investments in the associates, except where unrealised losses provide
evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of associates
is included as part of our investments in associates.
If an investment in an associate becomes an investment in a joint venture or vice versa, the
retained interest is not remeasured. Instead, the investment continues to be accounted for under the
equity method. In all other cases, upon loss of significant influence over the associate or joint control
over the joint venture, we measure and recognize any retained investment at its fair value. Any
difference between the carrying amount of the associate or joint venture upon loss of significant
influence or joint control and the fair value of the retained investment and proceeds from disposal is
recognized in profit or loss.
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Business Combinations and Goodwill
Business combinations are accounted for using the acquisition method. The consideration
transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair
values of assets transferred by us, liabilities assumed by us to the former owners of the acquiree and the
equity interests issued by us in exchange for control of the acquiree. For each business combination, we
elect whether to measure the non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree’s identifiable net assets. All other components of non-controlling
interests are measured at fair value. Acquisition-related costs are expensed as incurred.
We determine that we have acquired a business when the acquired set of activities and assets
includes an input and a substantive process that together significantly contribute to the ability to create
outputs.
When we acquire a business, we assess the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
host contracts of the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured
at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss.
Any contingent consideration to be transferred by the acquirer is recognized at fair value at the
acquisition date. Contingent consideration classified as an asset or liability is measured at fair value
with changes in fair value recognized in profit or loss. Contingent consideration that is classified as
equity is not remeasured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred, the amount recognized for non-controlling interests and any fair value of our previously
held equity interests in the acquiree over the identifiable assets acquired and liabilities assumed. If the
sum of this consideration and other items is lower than the fair value of the net assets acquired, the
difference is, after reassessment, recognized in profit or loss as a gain on bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. We perform its annual impairment test of goodwill as
at December 31. For the purpose of impairment testing, goodwill acquired in a business combination is,
from the acquisition date, allocated to each of our cash-generating units, or groups of cash-generating
units, that are expected to benefit from the synergies of the combination, irrespective of whether other
assets or liabilities of our Group are assigned to those units or groups of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group
of cash generating units) to which the goodwill relates. Where the recoverable amount of the
cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment
loss is recognized. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units)
and part of the operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the gain or loss on the
disposal. Goodwill disposed of in these circumstances is measured based on the relative value of the
operation disposed of and the portion of the cash-generating unit retained.
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Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the following cash-generating
units (“ CGUs ”) for impairment testing:
• SENADA BIKES CGU; and
• Jinan Jilian packaging products CGU.
The carrying amount of goodwill allocated to each of the CGUs is as follows:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
SENADA BIKES CGU 7,920 7,920 7,920
Jinan Jilian packaging products CGU 1,665 1,665 1,665
9,585 9,585 9,585
SENADA BIKES CGU
Our management engaged an independent external valuer to assess the recoverable amounts of the
goodwill as of December 31, 2022, 2023 and 2024. The recoverable amount of SENADA BIKES CGU
has been determined based on a value-in-use calculation using cash flow projections based on financial
budgets covering a five-year period approved by our management. The discount rate applied to the cash
flow projections is 13.17%, 13.92% and 15.17% as of December 31, 2022, 2023 and 2024, respectively.
The cash flows beyond the five-year period are extrapolated using zero growth rate and the business is
assumed that it would operate perpetually.
The following table sets out the key assumptions adopted by management in the impairment
assessment:
As of December 31,
2022 2023 2024
Revenue annual growth rate – average
of the forecast period 14.25% 13.25% 11.37%
Average gross margins 22.97% 24.32% 26.40%
Pre-tax discount rate 13.17% 13.92% 15.17%
As of December 31, 2022, 2023 and 2024, based on the value-in-use calculations, the recoverable
amount exceeded the carrying amount of SENADA BIKES CGU by RMB1,390,000, RMB12,010,000
and RMB8,747,000, respectively.
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Key assumptions for value-in-use calculations
Assumptions were used in the value-in-use calculation of the CGUs for the Track Record Period.
The key assumptions used in the value-in-use calculations reflect a combination of internal and external
factors impacting budgeted sales and gross margins and discount rates. The following describes each
key assumption on which management has based its cash flow projections to undertake impairment
testing of goodwill:
Budgeted sales and gross margins – The basis used to determine the value assigned to the
budgeted sales and gross margins is the average results achieved in the year immediately before the
budget year, increasing for expected efficiency improvements and expected market development.
Discount rate – The cash flow projections are discounted using a discount rate of 13.17%, 13.92%
and 15.17% as of December 31, 2022, 2023 and 2024, respectively. The discount rate reflects the
current market assessments of the time value of money and is based on the estimated cost of capital.
The value assigned to the key assumptions on the market development of SENADA BIKES and
discount rate are consistent with external information sources.
Sensitivity analysis for SENADA BIKES CGU valuation
We have performed sensitivity test by decreasing 0.3% of budgeted sales, decreasing 0.3% of
gross margins or increasing 0.3% of discount rate, with all other key assumptions held constant. The
impacts on the amount by which SENADA BIKES CGU recoverable amount exceed its carrying amount
(“headroom ”) are as below:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Budgeted sales decreased by 0.3% (1,114) (1,374) (1,129)
Gross margins decreased by 0.3% (1,351) (1,650) (1,215)
Discount rate increased by 0.3% (1,121) (1,381) (913)
The headroom corresponding to the impact of the above key assumptions are as follows:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Headroom – decreasing budgeted sales
by 0.3% 276 10,636 7,618
Headroom – decreasing gross margins
by 0.3% 39 10,360 7,532
Headroom – increasing discount rate
by 0.3% 269 10,629 7,834
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After a reasonably possible change for the budgeted sales, gross margins and discount rate, the
carrying amount of the CGU would not exceed its recoverable amount for the year ended December 31,
2023 and 2024. Due to the proximity of the acquisition date of SENADA BIKES CGU to December 31,
2022, the appraised value of SENADA BIKES CGU as of December 31, 2022 is close to the
consideration for acquisition of SENADA BIKES CGU, with a small headroom.
Based on the results of the aforementioned assessments as conducted by us and the independent
external valuer, our Directors conclude that no impairment loss on the aforementioned goodwill is
required to be recognized as of the end of each year during the Track Record Period.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost,
fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and our business model for managing them. With the exception of
trade and bills receivables that do not contain a significant financing component or for which we have
applied the practical expedient of not adjusting the effect of a significant financing component, we
initially measure a financial asset at its fair value, plus in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade and bills receivables that do not contain a significant
financing component or for which we have applied the practical expedient are measured at the
transaction price determined under IFRS 15 in accordance with the policies set out for revenue
recognition.
In order for a financial asset to be classified and measured at amortized cost or fair value through
other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and
interest (“ SPPI ”) on the principal amount outstanding. Financial assets with cash flows that are not
SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.
Our business model for managing financial assets refers to how we manage our financial assets in
order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and
measured at amortized cost are held within a business model with the objective to hold financial assets
in order to collect contractual cash flows, while financial assets classified and measured at fair value
through other comprehensive income are held within a business model with the objective of both
holding to collect contractual cash flows and selling. Financial assets which are not held within the
aforementioned business models are classified and measured at fair value through profit or loss.
All regular way purchases and sales of financial assets are recognized on the trade date, that is, the
date that we commit to purchase or sell the asset. Regular way purchases or sales are purchases or sales
of financial assets that require delivery of assets within the period generally established by regulation or
convention in the marketplace.
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Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subsequently measured using the effective interest method
and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is
derecognized, modified or impaired.
Financial assets designated at fair value through other comprehensive income (equity investments)
Upon initial recognition, we can elect to classify irrevocably its equity investments as equity
investments designated at fair value through other comprehensive income when they meet the definition
of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The
classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to the statement of profit or loss.
Dividends are recognized as other income in the statement of profit or loss when the right of payment
has been established, except when we benefit from such proceeds as a recovery of part of the cost of the
financial asset, in which case, such gains are recorded in other comprehensive income. Equity
investments designated at fair value through other comprehensive income are not subject to impairment
assessment.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position
at fair value with net changes in fair value recognized in the statement of profit or loss.
This category includes derivative instruments and equity investments which we had not
irrevocably elected to classify at fair value through other comprehensive income. Dividends on the
equity investments are also recognized as other income in the statement of profit or loss when the right
of payment has been established.
Impairment of Financial Assets
We recognize an allowance for expected credit losses (“ ECLs ”) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that we expect to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures
for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of
the default (a lifetime ECL).
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At each reporting date, we assess whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, we compare the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the
financial instrument as at the date of initial recognition and considers reasonable and supportable
information that is available without undue cost or effort, including historical and forward-looking
information. We consider that there has been a significant increase in credit risk when contractual
payments are more than 30 days past due.
We consider a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, we may also consider a financial asset to be in default when internal or external
information indicates that we are unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by us.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Financial assets at amortized cost are subject to impairment under the general approach and they
are classified within the following stages for measurement of ECLs except for trade and bills
receivables which apply the simplified approach as detailed below.
Stag e 1 – Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stag e 2 – Financial instruments for which credit risk has increased significantly since initial
recognition but that are not credit-impaired financial assets and for which the loss allowance is
measured at an amount equal to lifetime ECLs
Stag e 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased
or originated credit-impaired) and for which the loss allowance is measured at an amount equal to
lifetime ECLs
Simplified approach
For trade and bills receivables that do not contain a significant financing component or when we
apply the practical expedient of not adjusting the effect of a significant financing component, we apply
the simplified approach in calculating ECLs. Under the simplified approach, we do not track changes in
credit risk, but instead recognize a loss allowance based on lifetime ECLs at each reporting date. We
have established a provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
Foreign Currencies
The historical financial information is presented in RMB, which is our Company’s functional
currency. Each entity in our Group determines its own functional currency and items included in the
historical financial information of each entity are measured using that functional currency. Foreign
currency transactions recorded by the entities in our Group are initially recorded using their respective
functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency rates of exchange ruling at
the end of each of the Track Record Period. Differences arising on settlement or translation of monetary
items are recognized in the statements of profit or loss.
FINANCIAL INFORMA TION
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Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured
at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
was measured. The gain or loss arising on translation of a non-monetary item measured at fair value is
treated in line with the recognition of the gain or loss on change in fair value of the item (i.e.,
translation difference on the item whose fair value gain or loss is recognized in other comprehensive
income or profit or loss is also recognized in other comprehensive income or profit or loss,
respectively).
The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at
the end of the reporting period, the assets and liabilities of these entities are translated into RMB at the
exchange rates prevailing at the end of the reporting period and their statements of profit or loss are
translated into RMB at the exchange rates that approximate to those prevailing at the dates of the
transactions.
The resulting exchange differences are recognized in other comprehensive income and
accumulated in the exchange fluctuation reserve, except to the extent that the differences are
attributable to non-controlling interests. On disposal of a foreign operation, the cumulative amount in
the reserve relating to that particular foreign operation is recognized in the statement of profit or loss.
Material Accounting Judgments and Estimates
Recognition of Share-Based Payment Expenses
We grant restricted shares to certain management and employees under share award plans for
incentives. The vest of restricted shares is conditional upon the satisfaction of specified vesting
conditions, including service periods and/or performance conditions. Judgment is required to take into
account the vesting conditions to determine the number of the restricted shares to be included in the
measurement of equity-settled share-based payment expenses. The cumulative expense recognized for
share-based payments at the end of each period of the Track Record Period until the vesting date reflects
the extent to which the vesting period has expired and our best estimate of the number of restricted
shares that will ultimately vest. The charge or credit to the consolidated statement of profit or loss for a
period represents the movement in the cumulative expense recognized as at the beginning and end of
that period.
Provision for Expected Credit Losses on Trade and Other Receivables
Except for certain trade and bills receivables, other receivables that the ECLs are individually
assessed based on estimated cash flows, considering historical and forward-looking information, we use
a provision matrix to calculate ECLs for trade and bills receivables and other receivables. The provision
rates are based on days past due for groupings of various counterparties that have similar loss patterns.
The provision rates are initially based on our historical observed default rates. We will adjust the
historical credit loss experience with forward-looking information. For instance, if forecast economic
conditions are expected to deteriorate over the next year which can lead to an increased number of
defaults, the historical default rates are adjusted. At each reporting date, the historical observed default
rates are updated and changes in the forward-looking estimates are analyzed.
FINANCIAL INFORMA TION
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The assessment of the correlation among historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in
circumstances and forecast economic conditions. Our historical credit loss experience and forecast of
economic conditions may also not be representative of an actual default in the future. The information
about the ECLs on our trade and bills receivables and other receivables are disclosed in Notes 24 and 25
to the Accountants' Report set out in Appendix IA to this Prospectus.
Deferred Tax Assets
Deferred tax assets are recognized for unused tax losses and deductible temporary differences to
the extent that it is probable that taxable profit will be available against which the losses and deductible
temporary difference can be utilized. Significant management judgment is required to determine the
amount of deferred tax assets that can be recognized, based upon the likely timing and level of future
taxable profits together with future tax planning strategies. The carrying values of deferred tax assets
relating to recognized tax losses at December 31, 2022, 2023 and 2024 were nil. The amounts of
unrecognized tax losses at December 31, 2022, 2023 and 2024 were RMB308.8 million, RMB394.8
million and RMB466.3 million, respectively. Further details are contained in Note 32 to the
Accountants’ Report set out in Appendix IA to this Prospectus.
Leases – Estimating the Incremental Borrowing Rate
We cannot readily determine the interest rate implicit in a lease, and therefore, it uses an
incremental borrowing rate (“ IBR ”) to measure lease liabilities. The IBR is the rate of interest that we
would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what we “would have to pay”, which requires estimation when no observable rates are
available (such as for subsidiaries that do not enter into financing transactions) or when it needs to be
adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). We estimate the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s
stand-alone credit rating).
Impairment of Non-Financial Assets (Other than Goodwill)
We assess whether there are any indicators of impairment for all non-financial assets (including
the right-of-use assets) at the end of each of the Track Record Period. Indefinite life intangible assets
are tested for impairment annually and at other times when such an indicator exists. Other non-financial
assets are tested for impairment when there are indicators that the carrying amounts may not be
recoverable. An impairment exists when the carrying value of an asset or a cash-generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The calculation of the fair value less costs of disposal is based on available data from binding sales
transactions in an arm’s length transaction of similar assets or observable market prices less incremental
costs for disposing of the asset. When value-in-use calculations are undertaken, management must
estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable
discount rate in order to calculate the present value of those cash flows.
FINANCIAL INFORMA TION
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Write-Down of Inventories
Our inventories are stated at the lower of cost and net realizable value. We write down our
inventories based on estimates of the realizable value with reference to the aging and conditions of the
inventories, together with the economic circumstances on the marketability of such inventories.
Inventories will be reviewed quarterly for write-down, if appropriate.
Useful Lives and Residual V alues of Items of Property, Plant and Equipment
In determining the useful lives and residual values of items of property, plant and equipment, we
have to consider various factors, such as technical or commercial obsolescence arising from changes or
improvements in the production and provision of services, or from a change in the market demand for
the product or service output of the asset, expected usage of the asset, expected physical wear and tear,
care and maintenance of the asset, and legal or similar limits on the use of the asset. The estimation of
the useful life of the asset is based on our experience with similar assets that are used in a similar way.
Additional depreciation is made if the estimated useful lives and/or residual values of items of property,
plant and equipment are different from previous estimation. Useful lives and residual values are
reviewed at the end of each of the years based on changes in circumstances. Further details of the
property, plant and equipment are set out in Note 14 to the Accountants’ Report set out in Appendix IA
to this Prospectus.
FINANCIAL INFORMA TION
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RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statement of profit or loss with line
items in actual terms and as a percentage of our total revenue for the periods indicated derived from our
consolidated statements of profit or loss and comprehensive income set out in the Accountants’ Report
included in Appendix IA to this Prospectus:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
REVENUE 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Cost of sales (3,197,031) (59.5) (3,590,378) (53.6) (3,109,944) (56.2)
GROSS PROFIT 2,178,853 40.5 3,104,303 46.4 2,419,315 43.8
Other income and gains 36,214 0.7 53,381 0.8 61,114 1.1
Selling and marketing
expenses (1,575,180) (29.3) (2,342,146) (35.0) (1,849,611) (33.5)
Administrative expenses (170,652) (3.2) (240,642) (3.6) (264,591) (4.8)
Research and development
expenses (148,512) (2.8) (141,980) (2.1) (124,429) (2.3)
Impairment losses on
financial assets (76,680) (1.4) (25,367) (0.4) (9,037) (0.2)
Share of (losses)/profits of
associates (4,865) (0.1) 1,854 0.0 3,584 0.1
Foreign exchange
gains/(losses), net 10,736 0.2 975 0.0 (3,512) (0.1)
Finance costs (21,627) (0.4) (13,412) (0.2) (12,250) (0.2)
Other expenses and losses (14,397) (0.2) (10,500) (0.2) (2,443) (0.0)
PROFIT BEFORE TAX 213,890 4.0 386,466 5.8 218,140 3.9
Income tax expenses (42,311) (0.8) (54,344) (0.8) (33,690) (0.6)
PROFIT FOR THE YEAR 171,579 3.2 332,122 5.0 184,450 3.3
Attributable to:
Owners of the parent 183,980 345,099 181,931
Non-controlling interest (12,401) (12,977) 2,519
171,579 332,122 184,450
Earnings per share
Basic and diluted (RMB) 0.48 0.92 0.49
FINANCIAL INFORMA TION
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NON-IFRS MEASURES
To supplement our consolidated financial statements which are presented in accordance with
IFRS, we also use adjusted profit (non-IFRS measure) as an additional financial measure, which are not
required by, or presented in accordance with, IFRS. We believe that such non-IFRS measure facilitate
comparisons of operating performance from period to period and company to company by eliminating
potential impacts of items.
We believe that adjusted profit (non-IFRS measure) provides useful information to investors and
others in understanding and evaluating our consolidated statements of comprehensive income in the
same manner as they help our management. However, our presentation of adjusted profit (non-IFRS
measure) may not be comparable to similarly titled measures presented by other companies. The use of
adjusted profit (non-IFRS measure) has limitations as an analytical tool, and you should not consider it
in isolation from, or as a substitute of, our consolidated statements of comprehensive income or
financial condition as reported under IFRS.
We define adjusted profit (non-IFRS measure) as profit for the year, adjusted by adding back
equity-settled share-based payment expenses.
The following table reconciles our adjusted profit for the year (non-IFRS measure) to profit for the
year presented in accordance with IFRS:
For the year ended December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Reconciliation of profit to adjusted
profit (non-IFRS measure):
Profit for the year 171,579 332,122 184,450
Add back:
Equity-settled share-based payment
expenses
(Note) 3,126 26,379 17,332
Adjusted profit for the year
(non-IFRS measure) 174,705 358,501 201,782
Note: Equity-settled share-based payment expenses mainly represent the arrangement that we receive services from
employees as consideration for our equity instruments and were non-cash in nature.
FINANCIAL INFORMA TION
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KEY COMPONENTS OF OUR CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Revenue
We derive revenue from (i) our cross-border social e-commerce business, (ii) our paper packaging
business and (iii) others.
Revenue breakdown by business segment
The following table sets forth the breakdown of revenue by business segment for the periods
indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Revenue
Cross-border social
e-commerce
business 3,106,601 57.8 4,256,637 63.6 3,365,903 60.9
Paper packaging business 1,982,591 36.9 2,096,606 31.3 2,099,461 38.0
Others
(1) 286,692 5.3 341,438 5.1 63,895 1.1
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Note:
(1) Others mainly comprise our marketing and advertising business and incidental trading business. For further details,
see “Business – Our Other Businesses”.
FINANCIAL INFORMA TION
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Revenue breakdown by geographical market
The following table sets forth the breakdown of our total revenue by geographical market for the
periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Revenue
Northeast Asia (1) 1,794,364 33.4 2,541,774 38.0 1,738,742 31.4
Mainland China (2) 2,190,291 40.7 2,309,038 34.5 2,037,028 36.8
Southeast Asia (3) 677,902 12.6 846,808 12.6 661,433 12.0
Middle East (4) 409,467 7.6 385,919 5.8 341,777 6.2
Europe (5) and
North America (6) :
− U.S. 171,880 3.2 121,008 1.8 126,935 2.3
− Europe and
other countries in
North America 83,819 1.6 388,533 5.8 520,899 9.4
Others
(7) 48,161 0.9 101,601 1.5 102,445 1.9
Total 5,375,884 100.0 6,694,681 100.0 5,529,259 100.0
Notes:
(1) Northeast Asia primarily includes Japan, South Korea, Hong Kong SAR and Taiwan.
(2) Includes our paper packaging business and other businesses in Mainland China only. For details, see “Business –
Our Paper Packaging Business” and “Business – Our Other Businesses”.
(3) Southeast Asia primarily includes Thailand, Malaysia, Singapore and the Philippines.
(4) Middle East primarily includes Saudi Arabia and United Arab Emirates.
(5) Europe primarily includes Italy, Germany and Poland.
(6) North America primarily includes Canada and the United States.
(7) Includes revenues primarily generated from our paper packaging business in other countries or regions, such as
Australia and New Zealand.
FINANCIAL INFORMA TION
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Cost of Sales
Our cost of sales primarily consists of (i) costs of raw materials and goods, (ii) labor costs and (iii)
logistics costs and (iv) others which primarily included cost of sales related to our other businesses.
The following table sets forth the breakdown of our cost of sales by business segment for the
periods indicated, both in actual terms and as a percentage of our total cost of sales:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Cost of sales
Cross-border social
e-commerce business 1,269,838 39.7 1,571,742 43.8 1,329,134 42.8
Paper packaging business 1,682,064 52.6 1,703,450 47.4 1,724,280 55.4
Others 245,129 7.7 315,186 8.8 56,530 1.8
Total 3,197,031 100.0 3,590,378 100.0 3,109,944 100.0
The following table sets forth the breakdown of our cost of sales by nature for the periods
indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Cost of sales
Costs of raw materials and
goods 1,796,722 56.2 1,953,046 54.4 1,769,816 56.9
Labor costs 307,045 9.6 347,104 9.6 381,572 12.3
Logistics costs 733,995 23.0 852,973 23.8 741,598 23.8
Others 359,269 11.2 437,255 12.2 216,958 7.0
Total 3,197,031 100.0 3,590,378 100.0 3,109,944 100.0
FINANCIAL INFORMA TION
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Gross Profit and Gross Profit Margin
Our gross profit represents our revenue less our cost of sales, and our gross profit margin
represents our gross profit as a percentage of our revenue. For each year of the Track Record Period, our
gross profit was RMB2,178.9 million, RMB3,104.3 million and RMB2,419.3 million, respectively, and
our gross profit margin was 40.5%, 46.4% and 43.8%, respectively.
The following table sets forth the breakdown of our gross profit and gross profit margin by
business segment for the periods indicated:
For the year ended December 31,
2022 2023 2024
Gross
profit
Gross profit
margin
Gross
profit
Gross profit
margin
Gross
profit
Gross profit
margin
RMB’000 % RMB’000 % RMB’000 %
Cross-border social
e-commerce business 1,836,763 59.1 2,684,895 63.1 2,036,769 60.5
Paper packaging business 300,527 15.2 393,156 18.8 375,181 17.9
Other 41,563 14.5 26,252 7.7 7,365 11.5
Total 2,178,853 40.5 3,104,303 46.4 2,419,315 43.8
Other Income and Gains
Our other income and gains primarily consist of government grants and bank interest income. For
each year of the Track Record Period, our other income and gains were RMB36.2 million, RMB53.4
million, and RMB61.1 million, respectively.
FINANCIAL INFORMA TION
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The following table sets forth the breakdown of other income and gains for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Other income
Government grants (1) 26,879 74.2 35,243 66.0 39,034 63.9
Bank interest income 7,303 20.2 14,057 26.3 13,087 21.3
Gains
Gains on disposal of items of
property, plant and
equipment, net 1,508 4. 2––––
Gains on financial assets at
fair value through profit or
loss – – 2,453 4.6 4,338 7.1
Gains from deregistration of a
subsidiary –––– 1,261 2.1
Gains from foreign exchange
forward arrangements −−−− 2 2 1 0 . 4
Fair value gains on financial
assets at fair value through
profit or loss – – 231 0.4 88 0.1
Gains on disposal of
subsidiaries 56 0.2 515 1.0 – –
Gains on disposal of an
associate –––– 6 4 6 1 . 1
Others
(2) 468 1.2 882 1.7 2,439 4.0
Total 36,214 100.0 53,381 100.0 61,114 100.0
Notes:
(1) Government grants represent subsidies and benefits received from local governments in Mainland China.
(2) Others primarily represent write-offs of certain trade payables as the relevant payees did not require payment from
us and our payment obligations under the relevant agreements had passed the statute of limitations under applicable
laws and regulations.
Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of (i) advertising expenses in connection
with placing advertisement on social media platforms for our cross-border social e-commerce business,
(ii) staff costs for sales and marketing staff and (iii) service expenses mainly relating to platform
technology service fees in connection with our cross-border social e-commerce business. For each year
of the Track Record Period, our selling and marketing expenses were RMB1,575.2 million, RMB2,342.1
million and RMB1,849.6 million, amounting to 29.3%, 35.0%, and 33.5% of our total revenue,
respectively.
FINANCIAL INFORMA TION
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The following table sets forth a breakdown of our selling and marketing expenses for the periods
indicated, both in actual terms and as a percentage of our total selling and marketing expenses:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Selling and marketing
expenses
Advertising expenses 1,491,367 94.7 2,242,166 95.7 1,761,136 95.2
Staff costs 25,519 1.6 33,280 1.4 26,167 1.4
Service expenses 20,665 1.3 19,302 0.8 17,700 1.0
Others
(1) 37,629 2.4 47,398 2.1 44,608 2.4
Total 1,575,180 100.0 2,342,146 100.0 1,849,611 100.0
Note:
(1) Others primarily represent our rental expenses and office expenses.
Administrative Expenses
Our administrative expenses primarily consist of (i) staff costs, (ii) office expenses, (iii) rental
expenses, (iv) tax and surcharges and (v) professional fees. For each year of the Track Record Period,
our administrative expenses were RMB170.7 million, RMB240.6 million and RMB264.6 million,
amounting to 3.2%, 3.6%, and 4.8% of our total revenue, respectively.
The following table sets forth a breakdown of our administrative expenses for the periods
indicated, both in actual terms and as a percentage of our total administrative expenses:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Administrative expenses
Staff costs 96,739 56.7 145,303 60.4 161,829 61.1
Office expenses 16,066 9.4 20,217 8.4 23,765 9.0
Rental expenses 8,444 4.9 13,120 5.5 13,765 5.2
Professional fees
(1) 12,180 7.1 13,213 5.5 11,935 4.5
Tax and surcharges 13,608 8.0 14,325 6.0 16,063 6.1
Depreciation and amortization 9,453 5.5 11,770 4.9 13,148 5.0
Share-based compensation 3,126 1.8 7,323 3.0 7,193 2.7
Others
(2) 11,036 6.6 15,371 6.3 16,893 6.4
Total 170,652 100.0 240,642 100.0 264,591 100.0
FINANCIAL INFORMA TION
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Notes:
(1) Professional fees primarily represent the fees paid to legal advisers, auditors, consultants, valuers and other
professional advisers for their services rendered in relation to our ordinary course of business.
(2) Others primarily represent technical service fees.
Research and Development Expenses
Our research and development expenses primarily consist of (i) staff costs for research and
development staff and (ii) materials costs (primarily for raw materials) for product research and
technology development for our paper packaging business. For each year of the Track Record Period,
our research and development expenses were RMB148.5 million, RMB142.0 million and RMB124.4
million, amounting to 2.8%, 2.1%, and 2.3% of our total revenue, respectively.
The following table sets forth a breakdown of our research and development expenses for the
periods indicated, both in actual terms and as a percentage of our total research and development
expenses:
For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Research and
development expenses
Staff costs 74,529 50.2 61,503 43.3 57,084 45.9
Materials 61,465 41.3 58,247 41.0 48,985 39.4
Depreciation 5,285 3.6 6,210 4.4 5,455 4.4
Utilities expenses 3,587 2.4 5,245 3.7 4,920 4.0
Others
(1) 3,646 2.5 10,775 7.6 7,985 6.3
Total 148,512 100.0 141,980 100.0 124,429 100.0
Note:
(1) Others primarily represent the expenses incurred for our R&D projects with a leading cloud-based technology
company and the dividends paid to our research and development staff according to the 2022 Employee Share
Ownership Plan and the 2023 Restricted Share Incentive Plan.
Impairment Losses on Financial Assets
Impairment losses on financial assets related to (i) impairment of trade and bills receivables and
(ii) impairment of deposits and other receivable mainly due from an acquiror of equity interests from us
(the “ Relevant Receivable ”). For each year of the Track Record Period, our impairment losses on
financial assets were RMB76.7 million, RMB25.4 million, and RMB9.0 million, respectively.
FINANCIAL INFORMA TION
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For each year of the Track Record Period, we recorded impairment losses on the Relevant
Receivable of RMB62.4 million, RMB17.8 million and nil, respectively. The Relevant Receivable
relates to the last installment payment of RMB89.1 million under an equity purchase agreement that we
entered into with the acquiror, which was due before December 31, 2021. In February 2023, we initiated
proceedings against the acquiror in Haicang District People’s Court in Xiamen for such last installment
payment, and received a judgment in our favor in May 2023. As of the Latest Practicable Date, we do
not have any business relationships with the acquiror and Relevant Receivable had been fully impaired.
For further details, see “History and Corporate Structure – Major Disposal and Deregistration of
Subsidiaries During the Track Record Period.”
We recognize an allowance for expected credit losses (“ ECLs ”) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that we expect to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures
for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of
the default (a lifetime ECL).
At the end of each year during the Track Record Period, we assess whether the credit risk on a
financial instrument has increased significantly since initial recognition. When making the assessment,
we compare the risk of a default occurring on the financial instrument at the end of each year during the
Track Record Period with the risk of a default occurring on the financial instrument as of the date of
initial recognition and consider reasonable and supportable information that is available without undue
cost or effort, including historical and forward-looking information. We consider that there has been a
significant increase in credit risk when contractual payments are more than 30 days past due.
We consider a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, we may also consider a financial asset to be in default when internal or external
information indicates that we are unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by us.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Financial assets at amortized cost are subject to impairment under the general approach and they
are classified within the following stages for measurement of ECLs except for trade and bills
receivables which apply the simplified approach as detailed below.
Stag e 1 – Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stag e 2 – Financial instruments for which credit risk has increased significantly since initial
recognition but that are not credit-impaired financial assets and for which the loss allowance is
measured at an amount equal to lifetime ECLs
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Stag e 3 – Financial assets that are credit-impaired at the end of each year during the Track Record
Period (but that are not purchased or originated credit-impaired) and for which the loss allowance is
measured at an amount equal to lifetime ECLs
Simplified approach
For trade and bills receivables that do not contain a significant financing component or when we
apply the practical expedient of not adjusting the effect of a significant financing component, we apply
the simplified approach in calculating ECLs. Under the simplified approach, we do not track changes in
credit risk, but instead recognize a loss allowance based on lifetime ECLs at the end of each year during
the Track Record Period. We have established a provision matrix that is based on the historical credit
loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
Share of Losses/Profits of Associates
Our share of losses/profits of associates mainly represents our share in the losses or profits of
Xiamen Haisheng Rong Chuang Information Technology Co., Ltd. (ʮ̡ )
(“Xiamen Haisheng ”). For the year ended December 31, 2022, our share of losses of associates was
RMB4.9 million. For the year ended December 31, 2023, our share of profits of associates was RMB1.9
million. We had share of profits of associates of RMB3.6 million for the year ended December 31, 2024.
Finance Costs
Our finance costs consist of (i) interest on bank borrowings, (ii) interest on lease liabilities and
(iii) factoring charges. For each year of the Track Record Period, our finance costs were RMB21.6
million, RMB13.4 million and RMB12.3 million, respectively.
The following table sets forth a breakdown of our finance costs for the periods indicate:
For the year ended December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest on bank borrowings 13,534 5,756 6,083
Interest on lease liabilities 4,562 4,514 4,850
Factoring charges 3,531 3,142 1,317
21,627 13,412 12,250
FINANCIAL INFORMA TION
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Factoring arrangement
We entered into a factoring arrangement in March 2020 with a factoring company, which is an
affiliate of Customer Group A, in respect of the trade receivables of Customer Group A. Incorporated in
Shenzhen, China in 2015, the factoring company is an independent third party and is controlled by the
listed entity of Customer Group A on the Shanghai Stock Exchange. As advised by our PRC Legal
Advisor, there are no explicit national or local regulations in Shenzhen mandating specific licenses or
permits for factoring business. To the best knowledge of our Company, the registered business scope of
the factoring company includes factoring business, and as of the Latest Practicable Date, the factoring
company was under its ordinary operation. As of December 31, 2024, all of the trade receivables which
have been factored and are outstanding are non-recourse. Our sales to Customer Group A are not
conditional on this arrangement. We entered into the arrangement to improve our liquidity by shortening
the receivables collection duration and accelerating the availability of working capital. For each year of
the Track Record Period, the amount of factoring charges incurred under the arrangement were RMB3.5
million, RMB3.1 million, and RMB1.3 million respectively.
As of December 31, 2022, 2023 and 2024, the amount of trade receivables from Customer Group A
that were factored to the factoring company was RMB21.0 million, RMB9.5 million and RMB2.4
million, respectively. As of December 31, 2024 and the Latest Practicable Date, the outstanding amount
of trade receivables from Customer Group A factored to the factoring company was RMB2.4 million and
RMB0.4 million, respectively.
Foreign Exchange Gains/(Losses), Net
Our net foreign exchange gains amounted to RMB10.7 million and RMB1.0 million for the two
years ended December 31, 2022 and 2023, respectively. We had net foreign exchange losses of RMB3.5
million for the year ended December 31, 2024.
Other Expenses and Losses
Our other expenses and losses primarily consist of (i) impairment of property, plant and
equipment, (ii) gain/loss for foreign exchange forward arrangements, (iii) losses on disposal of an
associate and (iv) investment loss from deregistration of subsidiaries. For each year of the Track Record
Period, our other expenses and losses were RMB14.4 million, RMB10.5 million, and RMB2.4 million,
respectively.
FINANCIAL INFORMA TION
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For the year ended December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Other expenses and losses
Losses on early termination
of leases –––– 4 0 5 16.6
Losses on disposal of items of
other intangible assets ––––1 0 . 0
Losses on disposal of items of
property, plant and
equipment, net – – 3,551 33.8 301 12.3
Impairment of property, plant
and equipment 2,291 15. 9––––
(Gain)/Loss for foreign
exchange forward
arrangements 3,743 26.0 1,984 18.9 – –
Remeasurement loss of an
associate in step acquisition ––––––
Losses on disposal of an
associate – – 1,968 18.7 27 1.1
Investment loss from
deregistration of
subsidiaries
(1) 7,364 51.1 1,823 17.4 12 0.5
Losses on disposal of
subsidiaries –––– 5 5 3 22.7
Others 999 7.0 1,174 11.2 1,144 46.8
Total 14,397 100.0 10,500 100.0 2,443 100.0
Note:
(1) Investment loss from deregistration of subsidiaries for 2023 represents the investment loss associated with the
deregistration of Xinlongyue on July 29, 2022. For further details of this deregistration, see “History and Corporate
Structure–Major Disposal and Deregistration of Subsidiaries During the Track Record Period–Deregistration of
Xiamen Xinlongyue Recycled Paper Bag Co., Ltd.* (ʮ̡ )( “ Xinlongyue ”).”
Income Tax Expenses
For each year of the Track Record Period, we recorded income tax expenses of RMB42.3 million,
RMB54.3 million and RMB33.7 million, respectively. The following summarizes certain tax laws and
regulations applicable to us in the PRC and Hong Kong SAR.
FINANCIAL INFORMA TION
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Mainland China
Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law ”) and Implementation
Regulation of the EIT Law, the EIT rate of the Group’s PRC subsidiaries is 25% unless subject to
preferential tax as set out below.
The Company was qualified as High and New Technology Enterprises (“ HNTE ”) on October 21,
2020 and was entitled to a preferential tax rate of 15% in 2022. This qualification is subject to review by
the relevant tax authority in Mainland China for every three years. The tax rate applicable to the
Company was 25% since 2023 as the Company was not qualified for the HNTE.
Certain of the Group’s PRC subsidiaries are accredited as High and New Technology Enterprises
and were therefore entitled to a preferential income tax rate of 15% during the Track Record Period.
Such qualifications are subject to review by the relevant tax authority in Mainland China for every three
years.
Certain subsidiaries that are engaged in the “Encouraged Industries in the Western Region” and
eligible for the preferential EIT rate of 15%.
One of the Group’s PRC subsidiaries is qualified as a “Double Soft Enterprise” (“ DSE ”) under the
Corporate Income Tax Law during the Track Record Period. According to the relevant tax regulations,
the qualified subsidiary was exempted from CIT for two years, followed by a 50% reduction in the
applicable tax rates for the next three years if the criteria of DSE are met each year, commencing from
2019, the first year of profitable operation.
Certain subsidiaries were in line with the policies in the Notice on Preferential Corporate Income
Tax Policies for Kashgar and Khorgos Special Economic Development Zones in Xinjiang. The corporate
income tax shall be exempted within five years from the tax year to which the first production and
operation income belongs.
For each year of the Track Record Period, certain subsidiaries were qualified as small and micro
enterprises and were entitled to preferential corporate income tax rates of 5%, respectively.
Hong Kong SAR
Hong Kong SAR profits tax is calculated at 16.5% on the estimated assessable profits for the Track
Record Period. However, one subsidiary of the Group which is qualifying corporation can elect for the
two-tiered profits tax rates regime. Under the two-tiered profits tax rate regime, the first HK$2,000,000
of assessable profits of the qualifying Group entity established in Hong Kong SAR are taxed at 8.25%
and the remaining profits are taxed at 16.5%.
During the Track Record Period and up to the Latest Practicable Date, our Directors were not
aware of any outstanding enquiry, audit, investigation, challenge or penalty from tax authorities in
relation to our tax filings.
Profit for the Y ear
For each year of the Track Record Period, we recorded profit for the year of RMB171.6 million,
RMB332.1 million and RMB184.5 million, respectively.
FINANCIAL INFORMA TION
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REVIEW OF HISTORICAL RESULTS OF OPERATIONS
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our total revenue decreased by RMB1,165.4 million, or 17.4%, from RMB6,694.7 million in 2023
to RMB5,529.3 million in 2024, primarily due to a decrease in the revenue derived from our
cross-border social e-commerce business.
Our revenue derived from our cross-border social e-commerce business decreased by RMB890.7
million, or 20.9%, from RMB4,256.6 million in 2023 to RMB3,365.9 million in 2024, primarily due to
(i) the decrease in our average selling price per order in certain areas within Northeast Asia, particularly
in Japan and South Korea, due to intensified market competition in the cross-border social e-commerce
business, (ii) the decreases in the number of total fulfilled orders and revenue in certain key markets,
particularly in Japan and South Korea, as we reduced advertising expenses in such markets in response
to the unpredictability of exchange rate fluctuations, and (iii) our adjustments in strategic resource
allocation to implement our sales expansion within Europe and to develop and promote our brands.
Specifically, foreign exchange rate fluctuations in certain key markets, particularly in Japan and
South Korea, adversely affected our revenue. In 2024, the depreciation of Japanese yen and South
Korean won against Renminbi, and our reduced selling prices for certain products in such areas, led to
our lower average selling price per order recognized in Renminbi in such markets. Furthermore, as a
result of the unpredictability of exchange rate fluctuations, we strategically reduced the advertising
expenses in these markets with significant exchange rate fluctuations in 2024, which also led to the
decreases in our number of fulfilled orders and revenue in such markets.
Overall, our adjustments in resource allocation, including the strategic reduction in advertising
expenses in certain markets with significant exchange rate fluctuations had a more significant impact on
the revenue decline in such markets compared to the exchange rate fluctuations. We believe that the
recent decline in the revenue derived from our cross-border social e-commerce business reflects a
short-term adjustment in our strategic resource allocation, and anticipate that this will not have any
adverse or material impact on our future growth prospect.
Our revenue derived from our paper packaging business remained relatively stable at RMB2,099.5
million in 2024 compared with RMB2,096.6 million in 2023.
The decline of our total revenue from 2023 to 2024 was also partially attributable to the decrease
of our revenue from our other businesses. Our revenue from other businesses decreased by RMB277.5
million, or 81.3%, from RMB341.4 million in 2023 to RMB63.9 million in 2024, which was primarily
because we ceased the operation of our precision marketing and advertising business in March 2024, to
focus on our cross-border social e-commerce business and paper packaging business.
FINANCIAL INFORMA TION
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Cost of Sales
Our cost of sales decreased from RMB3,590.4 million in 2023 to RMB3,109.9 million in 2024,
primarily due to a corresponding reduction in cost of sales such as procurement costs and costs of
logistics services resulting from the decline in revenue from our cross-border social e-commerce
business and the cessation of our precision marketing and advertising business in March 2024, partially
offset by an increase in labor costs due to the bonuses to incentivise and reward our business operation
team considering the positive operating results in expanding our cross-border social e-commerce
business in under-penetrated areas within Europe.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our total gross profit decreased by 22.1% from RMB3,104.3 million
in 2023 to RMB2,419.3 million in 2024. Our overall gross profit margin decreased from 46.4% in 2023
to 43.8% in 2024, primarily as a result of the decrease in the revenue contribution of our cross-border
social e-commerce business, which has a higher gross profit margin compared to that of our paper
packaging business.
Our gross profit for our cross-border social e-commerce business decreased by RMB648.1 million,
or 24.1%, from RMB2,684.9 million in 2023 to RMB2,036.8 million in 2024. The gross profit margin
for our cross-border social e-commerce business decreased from 63.1% in 2023 to 60.5% in 2024,
primarily because the revenue for our cross-border social e-commerce business decreased by 20.9%
from 2023 to 2024, and our labor costs for such business increased due to the bonuses to incentivise and
reward our business operation team considering the positive operating results in expanding our
cross-border social e-commerce business in under-penetrated areas within Europe.
Our gross profit for our paper packaging business decreased from RMB393.2 million in 2023 to
RMB375.2 million in 2024. The gross profit margin for our paper packaging business remained
relatively stable at 17.9% in 2024, compared with 18.8% in 2023.
Other Income and Gains
Our other income and gains increased by RMB7.7 million, or 14.5%, from RMB53.4 million
in 2023 to RMB61.1 million in 2024, primarily because we received more government grants,
generated more gains on financial assets at fair value through profits or loss, and generated gains
from the deregistration of a subsidiary in the PRC engaging in the paper packaging business.
Selling and Marketing Expenses
Our selling and marketing expenses decreased by RMB492.5 million, or 21.0%, from RMB2,342.1
million in 2023 to RMB1,849.6 million in 2024, primarily due to the decrease in advertising expenses,
which is primarily attributable to our reduced advertising efforts in certain markets, such as Japan and
South Korea, in response to the unpredictability of exchange rate fluctuations.
Administrative Expenses
Our administrative expenses increased by RMB23.9 million, or 10.0%, from RMB240.6 million in
2023 to RMB264.6 million in 2024, primarily due to an increase in staff costs due to the bonuses to
incentivise and reward our management members considering the positive operating results in
expanding our cross-border social e-commerce business in under-penetrated areas within Europe, and an
increase in office expenses in the ordinary course of business.
FINANCIAL INFORMA TION
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Research and Development Expenses
Our research and development expenses decreased by RMB17.6 million, or 12.4%, from
RMB142.0 million in 2023 to RMB124.4 million in 2024, primarily because several of our research and
development projects were completed in 2024.
Impairment Losses on Financial Assets
Our impairment losses on financial assets decreased by RMB16.3 million, or 64.4%, from
RMB25.4 million in 2023 to RMB9.0 million in 2024, primarily due to the decrease in impairment of
deposits and other receivables.
Share of Profits of Associates
We recorded share of profits of associates of RMB1.9 million and RMB3.6 million in 2023 and
2024, respectively, which was primarily related to the operations and financial performance of our
associates in each year.
Foreign Exchange Gains/(Losses), net
We had net foreign exchange gains of RMB1.0 million in 2023 and net foreign exchange losses of
RMB3.5 million in 2024, which was primarily due to fluctuations of foreign exchange rates of certain
currencies such as Japanese yen during such year.
Finance Costs
Our finance costs decreased by RMB1.1 million, or 8.7%, from RMB13.4 million in 2023 to
RMB12.3 million in 2024, primarily due to the decrease in factoring charges in respect of the trade
receivables of Customer Group A. See “– Key Components of our Consolidated Statement of Profit or
Loss – Finance Costs – Factoring arrangement.”
Other Expenses and Losses
Our other expenses and losses decreased by RMB8.1 million from RMB10.5 million in 2023 to
RMB2.4 million in 2024, primarily due to decreases in (i) net losses on disposal of items of property,
plant and equipment, (ii) loss from foreign exchange forward arrangements, (iii) losses on disposal of
associates, and (iv) investment loss from deregistration of subsidiaries.
Income Tax Expense
Our income tax expense decreased by RMB20.7 million, or 38.0%, from RMB54.3 million in 2023
to RMB33.7 million in 2024, primarily due to a relatively lower profit before tax in 2024.
Profit for the Y ear and Net Profit Margin
As a result of the foregoing, our profit for the year decreased by 44.5% from RMB332.1 million in
2023 to RMB184.5 million in 2024, with a decrease in our net profit margin from 5.0% in 2023 to 3.3%
in 2024.
FINANCIAL INFORMA TION
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Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our total revenue increased by RMB1,318.8 million, or 24.5%, from RMB5,375.9 million in 2022
to RMB6,694.7 million in 2023, primarily as a result of an increase in revenue derived from our
cross-border social e-commerce business.
Our revenue derived from our cross-border social e-commerce business increased by RMB1,150.0
million, or 37.0%, from RMB3,106.6 million in 2022 to RMB4,256.6 million in 2023, primarily as a
result of the increase in the number of fulfilled orders placed from approximately 11.7 million to
approximately 16.4 million, driven by our continuous expansion in Northeast Asia, and Europe and
North America.
Our revenue derived from our paper packaging business increased by RMB114.0 million, or 5.8%,
from RMB1,982.6 million in 2022 to RMB2,096.6 million in 2023, primarily as a result of the increase
in total volume from 846.7 million sq.m. in 2022 to 925.3 million sq.m. in 2023, partially offset by the
decrease in average selling price which was mainly due to the decrease in the price of raw paper.
Cost of Sales
Our total cost of sales increased by RMB393.4 million, or 12.3%, from RMB3,197.0 million in
2022 to RMB3,590.4 million in 2023, primarily as a result of an increase in cost of sales for our
cross-border social e-commerce business, in line with its revenue growth.
Our cost of sales for our cross-border social e-commerce business increased by RMB301.9
million, or 23.8%, from RMB1,269.8 million in 2022 to RMB1,571.7 million in 2023, due to the
continuous expansion of our cross-border social e-commerce business.
Our cost of sales for our paper packaging business remained relatively stable at RMB1,682.1
million in 2022 and RMB1,703.5 million in 2023.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our total gross profit increased by RMB925.4 million, or 42.5%, from
RMB2,178.9 million in 2022 to RMB3,104.3 million for the same period in 2023. Our overall gross
profit margin increased from 40.5% in 2022 to 46.4% in 2023, primarily as a result of the increase in the
revenue contribution of our cross-border social e-commerce business, which has a higher gross profit
margin compared to that of our paper packaging business.
As a result of the foregoing, our gross profit for our cross-border social e-commerce business
increased by RMB848.1 million, or 46.2%, from RMB1,836.8 million in 2022 to RMB2,684.9 million
in 2023. The gross profit margin for our cross-border social e-commerce business increased from 59.1%
in 2022 to 63.1% in 2023, primarily as a result of our expansion into Northeast Asia where we enjoy a
higher profit margin driven by (i) a comparatively higher average selling price per order, in line with the
stronger purchasing power exhibited by the population in the regional market, and (ii) a relatively
higher order fulfillment rate in the region, according to CIC.
FINANCIAL INFORMA TION
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As a result of the foregoing, our gross profit for our paper packaging business increased by
RMB92.7 million, or 30.8%, from RMB300.5 million in 2022 to RMB393.2 million in 2023. The gross
profit margin for our paper packaging business increased from 15.2% in 2022 to 18.8% in 2023,
primarily as a result of the larger decrease in the price of raw paper compared to the average selling
price of our packaging products.
Other Income and Gains
Our other income and gains increased by RMB17.2 million, or 47.4%, from RMB36.2 million in
2022 to RMB53.4 million in 2023, primarily as a result of an increase in government grants of RMB8.4
million that we received and an increase in bank interest income by RMB6.8 million due to the increase
in time deposits.
Selling and Marketing Expenses
Our selling and marketing expenses increased by RMB767.0 million, or 48.7%, from RMB1,575.2
million in 2022 to RMB2,342.1 million in 2023, primarily as a result of an increase of advertising
expenses by RMB750.8 million. In 2023, we experienced a reduction in the advertisement rebates
provided by social media platforms as a percentage of advertising spend, leading to the increase in our
advertising expenses.
Administrative Expenses
Our administrative expenses increased by RMB70.0 million, or 41.0%, from RMB170.7 million in
2022 to RMB240.6 million in 2023, primarily due to the increased employee benefits expenses as a
result of the expansion of our administrative personnel headcount in 2023.
Research and Development Expenses
Our research and development expenses remained relatively stable at RMB148.5 million in 2022
and RMB142.0 million in 2023.
Impairment Losses on Financial Assets
Our impairment losses on financial assets decreased by RMB51.3 million, or 66.9%, from
RMB76.7 million in 2022 to RMB25.4 million in 2023, primarily because we recorded impairment
losses on the Relevant Receivable of RMB17.8 million in 2023, substantially lower than the RMB62.4
million recorded in 2022. For further details, see “– Key Components of Our Consolidated Statement of
Profit or Loss – Impairment Losses on Financial Assets” in this Prospectus.
Share of (Losses)/Profits of Associates
We recorded share of profits of associates of RMB1.9 million in 2023, as compared to our share of
losses of associates of RMB4.9 million in 2022, primarily as a result of the improvement in operations
of our associates in 2023.
Foreign Exchange Gains/(Losses), net
Our net foreign exchange gain decreased from RMB10.7 million in 2022, to RMB1.0 million in
2023, primarily because the percentage of depreciation of RMB against U.S. dollars in 2022 was higher
than that of 2023.
FINANCIAL INFORMA TION
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Finance Costs
Our finance costs decreased by RMB8.2 million, or 38.0%, from RMB21.6 million in 2022 to
RMB13.4 million in 2023, primarily as a result of the decrease in interest on bank borrowings of
RMB7.8 million, which was in line with the decrease in our average level of bank borrowings and the
overall lower interest rate applicable to our bank borrowings.
Other Expenses and Losses
Our other expenses and losses decreased by RMB3.9 million, or 27.1%, from RMB14.4 million in
2022 to RMB10.5 million in 2023, primarily as we recorded an investment loss from deregistration of
subsidiaries of RMB7.4 million in 2022.
Income Tax Expense
Our income tax expense increased by RMB12.0 million, from RMB42.3 million in 2022 to
RMB54.3 million in 2023, primarily due to a relatively higher profit before tax in 2023 compared to
2022. However, our effective income tax rate decreased from 19.8% in 2022 to 14.1% in 2023, primarily
due to a reduction in tax losses and deductible temporary differences that were not recognized as
deferred tax expense, despite a relatively higher profit before tax in 2023 compared to 2022.
Profit for the Y ear and Net Profit Margin
As a result of the foregoing, our profit for the year increased by RMB160.5 million, or 93.6%,
from RMB171.6 million in 2022 to RMB332.1 million in 2023. Our net profit margin was 3.2% and
5.0% in 2022 and 2023, respectively.
FINANCIAL INFORMA TION
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SELECTED ITEMS FROM THE CONSOLIDATED BALANCE SHEETS
The following table sets forth our financial position as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and equipment 803,669 916,633 930,436
Right-of-use assets 172,457 187,461 176,350
Goodwill 9,585 9,585 9,585
Other intangible assets 14,451 23,377 19,910
Investments in associates 67,815 82.439 107,477
Equity investments designated at fair
value through other comprehensive
income 18,500 19,500 8,254
Financial assets at fair value through
profit or loss – – 130,863
Deferred tax assets 13,526 12,231 11,147
Pledged deposits 35,000 15,000 –
Time deposits – 52,055 133,791
Other non-current assets 994 12,593 1,188
Total non-current assets 1,135,997 1,330,874 1,529,001
Current assets
Inventories 483,669 456,076 447,889
Trade and bills receivables 474,731 488,624 553,885
Prepayments, other receivables and
other assets 199,929 162,818 141,874
Amounts due from related parties – 1,453 1,243
Pledged deposits 94,971 41,390 67,971
Time deposits 1,018 43,231 50,169
Cash and cash equivalents 852,071 1,062,110 711,062
Total current assets 2,106,389 2,255,702 1,974,093
TOTAL ASSETS 3,242,386 3,586,576 3,503,094
FINANCIAL INFORMA TION
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--- page 378 ---
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
LIABILITIES
Current liabilities
Trade and bills payables 512,500 640,520 716,560
Other payables and accruals 115,442 188,349 181,321
Contract liabilities 12,949 14,829 17,858
Interest-bearing bank borrowings 295,644 103,042 121,126
Lease liabilities 23,948 25,012 34,678
Tax payables 30,817 40,225 8,645
Amounts due to related parties 3,117 1,364 972
Other current liabilities 944 3,663 3,227
Total current liabilities 995,361 1,017,004 1,084,387
Non-current liabilities
Interest-bearing bank borrowings 16,549 155,575 127,067
Lease liabilities 53,490 63,373 49,465
Deferred income 32,387 34,023 30,945
Deferred tax liabilities 7,434 3,747 2,715
Total non-current liabilities 109,860 256,718 210,192
Total liabilities 1,105,221 1,273,722 1,294,579
EQUITY
Equity attributable to owners of the
Company
Share capital 378,409 385,009 384,769
Reserves 1,716,807 1,895,389 1,817,255
Equity attributable to owners of the
parent 2,095,216 2,280,398 2,202,024
Non-controlling interests 41,949 32,456 6,491
TOTAL EQUITY 2,137,165 2,312,854 2,208,515
TOTAL EQUITY AND LIABILITIES 3,242,386 3,586,576 3,503,094
FINANCIAL INFORMA TION
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Property, Plant and Equipment
Our property, plant and equipment primarily consist of (i) machinery, (ii) buildings, (iii)
construction in progress and (iv) other equipment. Our property, plant and equipment increased from
RMB803.7 million as of December 31, 2022 to RMB916.6 million as of December 31, 2023, primarily
due to the aforementioned construction in progress and the additions of machinery in Hohhot, as well as
the renovations and additions of machinery in certain other factories for our paper packaging business.
Our property, plant and equipment increased to RMB930.4 million as of December 31, 2024, primarily
due to that we purchased new machinery for promoting production capacities of our paper packaging
business.
Right-of-use Assets
Our right-of-use assets are in relation to (i) warehouses and office premises and (ii) land use
rights. Our right-of-use assets slightly increased from RMB172.5 million as of December 31, 2022 to
RMB187.5 million as of December 31, 2023, primarily due to the additions of our warehouses and
office premises. Our right-of-use assets decreased to RMB176.4 million as of December 31, 2024,
primarily due to the depreciation of right-of-use assets in the ordinary course of business.
Goodwill
Our goodwill remained stable at RMB9.6 million as of December 31, 2022, 2023 and 2024.
Other Intangible Assets
Our other intangible assets primarily consist of (i) patent and (ii) software. Our other intangible
assets increased from RMB14.5 million as of December 31, 2022 to RMB23.4 million as of December
31, 2023, primarily due to other intangible assets we acquired as part of our acquisition of the Konciwa
automatic UV umbrella business in September 2023. Our other intangible assets decreased from
RMB23.4 million as of December 31, 2023 to RMB19.9 million as of December 31, 2024, primarily due
to the amortisation recorded of other intangible assets in the usual and ordinary course of business.
Investments in Associates
Our investments in associates primarily represent our share of net assets in Xiamen Haisheng,
Shenzhen Jiashe Network Technology Co., Ltd.* (ʮ̡ ,“ Shenzhen Jiashe ”),
Fujian Strait Copyright Operation Co., Ltd.* (ʮ̡ ) and Tianjin Masterwork
Health Technology Co., Ltd.* (ʮ̡ ). Our investments in associates increased
from RMB67.8 million as of December 31, 2022 to RMB82.4 million as of December 31, 2023,
primarily due to share of profits of associates of RMB1.9 million we recorded in 2023. Our investments
in associates increased to RMB107.5 million as of December 31, 2024, primarily due to our investment
in Shenzhen Jiashe in 2024.
FINANCIAL INFORMA TION
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Equity Investment Designated at Fair Value through Other Comprehensive Income
Our equity investment designated at fair value through other comprehensive income primarily
represents our strategic equity investments. Our equity investment designated at fair value through other
comprehensive income increased from RMB18.5 million as of December 31, 2022 to RMB19.5 million
as of December 31, 2023, primarily due to our investments in Zhejiang Leadinsight Digital Intelligence
Technology Co., Ltd* (ʮ̡ ), partially offset by the withdrawal of investment in
Fujian Xingsheng Tongxian Brand Operation Co., Ltd.* (ʮ̡ )a st h e
investment did not realize our expected synergies and returns. Our equity investment designated at fair
value through other comprehensive income decreased from RMB19.5 million as of December 31, 2023
to RMB8.3 million as of December 31, 2024, primarily because we sold our equity interests in
Chongqing Fanjiao Network Technology Co., Ltd.* (ʮ̡ ) as the investment did
not realize our expected synergies and returns.
Financial Assets at Fair Value Through Profit or Loss
Our financial assets at fair value through profit or loss (“ FVTPL ”) represent unlisted investments
issued by equity fund in Hong Kong. We manage our investments on a fair value basis pursuant to our
investment management policy. The investment in financial assets at FVTPL after the Listing will be
subject to the compliance with Chapter 14 of the Listing Rules.
As part of our investment strategy, we will make investments in equity interests, debts, funds and
wealth management products in accordance with applicable laws and regulations and our development
strategies, and at the same time carefully control investment risks. According to our internal control
policies for investment activities, our general manager and investment department are responsible for
proposing, analyzing, advising and formulating investment proposals. The investment proposals should
be subject to approvals of the general meeting or the Board of Directors, as applicable, if the investment
amounts exceed the prescribed threshold. If (i) the transaction amount or total net assets of the relevant
investment subject accounted for over 50% of our latest audited total net assets, or the revenue of the
investment subject accounted for over 50% of our latest audited total revenue, or the amount of which
exceeds RMB50 million, or (ii) the profit generated from the investment or the net profit of the
investment subject accounted for over 50% of our latest audited net profit, or the amount of which
exceeds RMB5 million, the investment proposals should be subject to approvals by Shareholders at
relevant general meeting. If (i) the transaction amount or total net assets of the relevant investment
subject accounted for over 10% of our latest audited total net assets, or the revenue of the investment
subject accounted for over 10% of our latest audited total revenue, or the amount of which exceeds
RMB10 million, or (ii) the profit generated from the investment or the net profit of the investment
subject accounted for over 10% of our latest audited net profit, or the amount of which exceeds RMB1
million, the investment proposals should be subject to approvals by the Board of Directors. We also
place designated personnel for regularly monitoring the performance of our investment targets, and we
will withdraw or transfer our investments if such the operational results of our investment targets do not
meet our expectations. The following table sets forth a breakdown of our financial assets at FVTPL as
of the dates indicated.
FINANCIAL INFORMA TION
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As at December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Other unlisted investments, at fair value – – 130,863
Our financial assets at FVTPL were nil as of December 31, 2022 and 2023. As of December 31,
2024, our financial assets at FVTPL were RMB130.9 million, representing the unlisted investments
issued by a private equity fund in Hong Kong SAR. The private equity fund will principally focus on
investment in consumer products industry globally and the management fee is 2% per annum. The term
of the private equity fund is five years since the initial closing and the investment manager may extend
the term for one additional year for twice at its absolute discretion. All proceeds in relation to the
investments made by the private equity fund which have not been previously distributed, shall be
distributed after payment of the relevant fees and expenses. The private equity fund may at its
discretion, make distributions or settle compulsory redemptions in kind if it deems appropriate. We are
entitled to redemptions in ordinary course, and compulsory redemptions per relevant terms and
conditions as agreed and subject to mutual consent from the private equity fund and us. However, as the
principal or return of investment in such private equity fund is not guaranteed, we may incur losses from
such investment.
Deferred Tax Assets
Our deferred tax assets primarily arise from the temporary differences attributable to impairment
of assets, deferred income and accruals, and unrealized profits from intercompany transactions. Our
deferred tax assets decreased from RMB13.5 million as of December 31, 2022 to RMB12.2 million as of
December 31, 2023, primarily due to the decrease in the temporary differences attributable to
impairment of assets and lease liabilities. Our deferred tax assets further decreased to RMB11.1 million
as of December 31, 2024, primarily due to the decrease in the temporary differences attributable to
impairment of assets and deferred income and accruals.
Inventories
Our inventories primarily consist of raw materials, work-in-progress and finished goods. Our
inventories decreased from RMB483.7 million as of December 31, 2022 to RMB456.1 million as of
December 31, 2023, primarily due to the decreases in raw materials in the ordinary course of our paper
packaging business as well as in finished goods, primarily resulting from the increase in sales under our
cross-border social e-commerce business and the increase in the impairment of inventories in 2023. Our
inventories decreased to RMB447.9 million as of December 31, 2024, primarily due to the decreases in
raw materials in the ordinary course of our paper packaging business and the sales of goods under our
cross-border social e-commerce business.
FINANCIAL INFORMA TION
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As of December 31,
2022 2023 2024
RMB’000 % RMB’000 % RMB’000 %
Inventories
Cross-border social
e-commerce business 136,718 28.3 132,014 29.0 136,423 30.5
Paper packaging business 275,734 57.0 260,107 57.0 254,674 56.9
Others 80,296 16.6 82,073 18.0 69,694 15.5
Impairment of inventories (9,079) (1.9) (18,118) (4.0) (12,902) (2.9)
Total 483,669 100.0 456,076 100.0 447,889 100.0
The table below sets forth our inventories by nature as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Inventories
Raw materials 181,032 171,160 159,125
Work in progress 20,750 29,666 28,320
Finished goods 289,999 273,179 271,470
Others 967 189 1,876
492,748 474,194 460,791
Impairment of inventories (9,079) (18,118) (12,902)
Total 483,669 456,076 447,889
Our inventories are stated at the lower of cost and net realizable value. Cost is determined on the
weighted average basis and, in the case of work in progress and finished goods, comprises direct
materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on
estimated selling prices less any estimated costs to be incurred to completion and disposal. We write
down our inventories based on estimates of the realizable value with reference to the aging and
conditions of the inventories, together with the economic circumstances on the marketability of such
inventories. Inventories will be reviewed quarterly for write-down, if appropriate. For each year of the
Track Record Period, the impairment of inventories recognized in cost of sales amounted to RMB8.5
million, RMB19.5 million and RMB9.5 million, respectively.
FINANCIAL INFORMA TION
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The following table sets forth a summary on the aging analysis of inventories as at the dates
indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within six months 368,412 344,780 338,920
Seven to 12 months 66,303 30,538 23,754
Over 12 months 48,954 80,758 85,215
483,669 456,076 447,889
The following table sets forth our inventory turnover days for the periods indicated:
For the year ended December 31,
2022 2023 2024
Inventory turnover days (1) 52.5 49.1 54.9
– Inventory turnover days of
cross-border social e-commerce
business
(2) 33.4 31.2 36.9
– Inventory turnover days of paper
packaging business (3) 58.7 57.4 54.5
Notes:
(1) We calculate inventory turnover days using the average of the beginning and ending balances of total inventories for
the relevant year, divided by the corresponding total cost of sales for the same year, multiplied by 365 days.
(2) We calculate inventory turnover days of our cross-border social e-commerce business using the average of the
beginning and ending balances of inventories of our cross-border social e-commerce business for the relevant year,
divided by the corresponding cost of sales of our cross-border social e-commerce business for the same year,
multiplied by 365 days.
(3) We calculate inventory turnover days of our paper packaging business using the average of the beginning and ending
balances of inventories of our paper packaging business for the relevant year, divided by the corresponding cost of
sales of our paper packaging business for the same year, multiplied by 365 days.
For each year of the Track Record Period, our inventory turnover days were 52.5 days, 49.1 days
and 54.9 days, respectively.
For each year of the Track Record Period, our inventory turnover days of our cross-border social
e-commerce business were 33.4 days, 31.2 days and 36.9 days, respectively. Our inventory turnover
days of our cross-border social e-commerce business remained relatively stable from 2022 to 2023. The
increase in our inventory turnover days of our cross-border social e-commerce business from 2023 to
2024 was primarily attributable to the decreases in cost of sales under our cross-border social
e-commerce business.
FINANCIAL INFORMA TION
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For each year of the Track Record Period, our inventory turnover days of our paper packaging
business were 58.7 days, 57.4 days and 54.5 days, respectively. Our inventory turnover days of our
paper packaging business remained relatively stable from 2022 to 2023. The decrease in our inventory
turnover days of paper packaging business from 2023 to 2024 was primarily attributable to the
decreases in raw materials in the ordinary course of our paper packaging business.
As of March 31, 2025, RMB316.0 million, or 68.6%, of our inventories as of December 31, 2024
had been subsequently sold or utilized, the remaining inventories of which primarily relate to finished
goods for our incidental trading business, and to a lesser extent, products for our cross-border social
e-commerce business, all of which are being sold in the ordinary course of business.
There is no recoverability issue for the inventories aged over 12 months as we recorded the
inventory at the lower of cost and net realizable value from the accounting perspective.
As of December 31, 2024, 81.6% of the net value of the inventories aged over 12 months were
liquor inventories, which had a net value of RMB69.5 million. Since the liquor inventories are
characterized by a long shelf life and suitability for long-term storage, their extended aging will not
lead to a decrease in the selling prices. Furthermore, given that sales of liquor inventories typically
yield higher premium which exceeds their costs, there is no recoverability issue for liquor inventories.
In addition, as of December 31, 2024, raw paper, spare parts and paper packaging production
under our paper packaging business took up 8.0% of the net value of our inventories aged over 12
months, which had a net value of RMB6.8 million. After taking the net realizable value test, we accrued
a provision of RMB1.2 million for these paper packaging inventories whose original costs were
RMB8.0 million. As of December 31, 2024, finished goods under our cross-border social e-commerce
business took up the remaining 10.4% of the net value of our inventories aged over 12 months, which
had a net value of RMB8.9 million. After taking the net realizable value test, we accrued a provision of
RMB3.1 million for these cross-border social e-commerce business whose original costs were RMB12.0
million.
According to the net realizable value test, we accrued the provision of RMB8.7 million for
inventories aged less than 12 months as of December 31, 2024.
Trade and Bills Receivables
Our trade and bills receivables primarily arise from (i) sales to enterprise customers of our
packaging business to whom we provide credit terms and (ii) sales of our cross-border social
e-commerce business where our payment service provider or logistics service provider has collected
payment from the consumer but have not settled with us. The bills receivables held by us were bank
acceptance bills received from our enterprise customers of our paper packaging business that were
mostly issued by reputable banks and with short-term maturity. We seek to maintain strict control over
our outstanding receivables and have a credit control department to minimize credit risk. Overdue
balances are reviewed regularly by senior management and credit limits attributed to enterprise
customers are reviewed annually.
FINANCIAL INFORMA TION
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The following table sets forth our trade and bills receivables as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Trade receivables 502,125 516,854 591,571
Impairment (30,149) (37,691) (42,681)
Trade receivables, net 471,976 479,163 548,890
Bills receivables 2,755 9,461 4,995
Trade and bills receivables 474,731 488,624 553,885
Our trade receivables, net as of December 31, 2022, 2023 and 2024 were RMB472.0 million,
RMB479.2 million and RMB548.9 million, respectively. Our trade receivables, net increased from
RMB472.0 million as of December 31, 2022 to RMB479.2 million as of December 31, 2023, in line
with the increase in sales of our cross-border social e-commerce business. Our trade receivables, net
increased from RMB479.2 million as of December 31, 2023 to RMB548.9 million as of December 31,
2024, primarily because we had higher transaction volume for our paper packaging business
approaching the end of 2024.
Our bills receivables increased from RMB2.8 million as of December 31, 2022 to RMB9.5 million
as of December 31, 2023, as a result of the increased receipt of banker’s acceptance bills from our
enterprise customers of our paper packaging business. Our bills receivables decreased from RMB9.5
million as of December 31, 2023 to RMB5.0 million as of December 31, 2024, primarily attributable to
our collection of bills receivables for one of our subsidiaries.
FINANCIAL INFORMA TION
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Our typical credit term is of 30 to 90 days. The following table sets forth the aging analysis of our
trade receivables based on the invoice date as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within one year 485,201 496,322 569,614
One year to two years 12,821 7,875 5,595
Two to three years 828 11,028 4,038
Three to four years 2,134 283 10,926
Four to five years 160 1,190 206
Over five years 981 156 1,192
502,125 516,854 591,571
Impairment allowance (30,149) (37,691) (42,681)
Total 471,976 479,163 548,890
An impairment analysis is performed at each reporting date using a provision matrix to measure
expected credit losses. The provision rates are based on aging for groupings of various enterprise
customer segments that have similar loss patterns. The calculation reflects the probability-weighted
outcome, the time value of money and reasonable and supportable information that is available at the
reporting date about past events, current conditions and forecasts of future economic conditions. The
provision matrix is initially based on our historical observed default rates. We will calibrate the matrix
to adjust the historical credit loss experience with forward-looking information. As of December 31,
2022, 2023 and 2024, we recorded provision for impairment of trade receivables of RMB30.1 million,
RMB37.7 million and RMB42.7 million, respectively.
The following table sets forth our trade and bills receivables turnover days for the periods
indicated:
For the year ended December 31,
2022 2023 2024
Trade and bills receivables turnover
days (1) 32.5 28.1 37.1
Trade and bills receivables turnover
days of our cross-border social
e-commerce business
(2) 10.7 10.7 15.9
Trade and bills receivables turnover
days of our paper packaging
business
(3) 65.7 63.1 69.2
FINANCIAL INFORMA TION
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Notes:
(1) We calculate trade and bills receivables turnover days using the average of the beginning and ending balances of
trade and bills receivables for the relevant year, divided by the corresponding revenue for the same year, multiplied
by 365 days.
(2) We calculate trade and bills receivables turnover days of our cross-border social e-commerce business using the
average of the beginning and ending balances of trade and bills receivables of our cross-border social e-commerce
business for the relevant year, divided by the corresponding revenue of our cross-border social e-commerce business
for the same year, multiplied by 365 days.
(3) We calculate trade and bills receivables turnover days of our paper packaging business using the average of the
beginning and ending balances of trade and bills receivables of our paper packaging business for the relevant year,
divided by the corresponding revenue of our paper packaging business for the same year, multiplied by 365 days.
For the year ended December 31, 2022, our trade and bills receivables turnover days was 32.5
days. For the year ended December 31, 2023, our trade and bills receivables turnover days decreased to
28.1 days, primarily due to the increased revenue contribution from our cross-border social e-commerce
business, which typically has a shorter turnover period compared to our paper packaging business. Our
trade and bills receivables turnover days increased to 37.1 days for the year ended December 31, 2024,
primarily due to the increase in the trade and bills receivables of and the decline in revenue from our
cross-border social e-commerce business.
For each year of the Track Record Period, our trade and bills receivables turnover days of our
cross-border social e-commerce business were 10.7 days, 10.7 days and 15.9 days, respectively. For
each year of the Track Record Period, our trade and bills receivables turnover days of our paper
packaging business were 65.7 days, 63.1 days and 69.2 days, respectively.
As of March 31, 2025, RMB556.7 million, or 95.3%, of our trade and bills receivables as of
December 31, 2024 had been subsequently settled. During the Track Record Period and up to the Latest
Practicable Date, we did not have any material dispute or disagreement with our enterprise customers in
relation to the timing, amounts of billing or the collection of our trade receivables.
FINANCIAL INFORMA TION
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Prepayments, Other Receivables and Other Assets
Our prepayments, other receivables and other assets primarily consist of (i) prepayments to
suppliers; (ii) deposits and other receivables primarily relating to the Relevant Receivable. We recorded
impairment primarily with respect to the amount due to us for the disposal of certain equity interests.
For further details, see “– Key Components of Our Consolidated Statement of Profit or Loss –
Impairment Losses on Financial Assets" in this Prospectus. The following table sets forth a breakdown
of our prepayments, other receivables and other assets as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments, Other Receivables and
Other Assets
Prepayments 127,225 81,305 21,080
Deposits and other receivables 133,740 135,499 150,088
V alue-added tax recoverable 15,094 30,277 17,527
Prepaid income tax 3,063 2,501 2,059
Listing expense – 8,693 45,870
Others 818 607 296
279,940 258,882 236,920
Impairment allowance (80,011) (96,064) (95,046)
Total 199,929 162,818 141,874
Our prepayments, other receivables and other assets as of December 31, 2022, 2023 and 2024 were
RMB199.9 million, RMB162.8 million and RMB141.9 million, respectively. Our prepayments, other
receivables and other assets were RMB162.8 million as of December 31, 2023, compared to RMB199.9
million as of December 31, 2022, primarily attributable to a lower level of prepayments to our suppliers.
Impairment allowance of our prepayments, other receivables and other assets is associated with the
impairment losses on the Relevant Receivables. Our prepayments, other receivables and other assets
were RMB141.9 million as of December 31, 2024, compared to RMB162.8 million as of December 31,
2023, primarily attributable to a decrease in prepayments to suppliers of liquor products, and the
decrease in value-added tax recoverable, partially offset by the increase in listing expense. For details,
see “– Key Components of Our Consolidated Statement of Profit or Loss – Impairment Losses on
Financial Assets”.
As of March 31, 2025, RMB46.1 million, or 32.2%, of our prepayments, other receivables and
other assets as of December 31, 2024 had been subsequently utilized.
FINANCIAL INFORMA TION
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Pledged Deposits
Our pledged deposits primarily represent guarantee deposits for bills payables we utilize to pay
our suppliers of our paper packaging businesses. Our pledged deposits as of December 31, 2022, 2023
and 2024 were RMB130.0 million, RMB56.4 million and RMB68.0 million, respectively. Our pledged
deposits decreased from RMB130.0 million as of December 31, 2022 to RMB56.4 million as of
December 31, 2023, primarily due to the settlement of our bills payables. Our pledged deposits
increased to RMB68.0 million as of December 31, 2024, primarily due to the decreases in guarantee
deposits for bills payables for our paper packaging business we utilize in the ordinary course of
business.
Time Deposits
Our time deposits increased from RMB1.0 million as of December 31, 2022 to RMB95.3 million
as of December 31, 2023, primarily because certain deposits placed during this period had not yet
matured by the year-end of 2023. Our time deposits increased to RMB184.0 million as of December 31,
2024, primarily due to the increased placement of time deposits with original maturities over one year
according to our cash management strategies.
Trade and Bills Payables
Our trade and bills payables mainly represent the balances due to our suppliers for purchase of
inventories, advertising costs payable to third-party digital marketing service providers. Our trade and
bills payables are non-interest-bearing and normally settled on terms of within 30 to 60 days. Our trade
and bills payables increased from RMB512.5 million as of December 31, 2022 to RMB640.5 million as
of December 31, 2023, primarily due to the increase in advertising costs payable to third-party digital
marketing service providers for our cross-border social e-commerce business. Our trade and bills
payables increased to RMB716.6 million as of December 31, 2024, primarily due to the increased use of
bills payable for our paper packaging business.
The table below sets forth the aging analysis of our trade and bills payables based on the invoice
date at the end of each reporting period:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within one year 498,008 627,080 695,430
One year to two years 10,162 8,205 12,916
Two to three years 1,397 1,296 3,950
Over three years 2,933 3,939 4,264
Total 512,500 640,520 716,560
FINANCIAL INFORMA TION
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The following table sets forth our trade and bills payables turnover days for the periods indicated:
For the year ended December 31,
2022 2023 2024
Trade and bills payables turnover days
(1) 55.5 58.6 79.6
Trade and bills payables turnover days
of our cross-border social
e-commerce business
(2) 47.0 54.0 72.0
Trade and bills payables turnover days
of our paper packaging business (3) 65.9 70.4 86.1
Notes:
(1) We calculate trade and bills payables turnover days using the average of the beginning and ending balances of trade
and bills payables for the relevant year, divided by the corresponding cost of sales for the same year, multiplied by
365 days.
(2) We calculate trade and bills payables turnover days of our cross-border social e-commerce business using the
average of the beginning and ending balances of trade and bills payables of our cross-border social e-commerce
business for the relevant year, divided by the corresponding cost of sales of our cross-border social e-commerce
business for the same year, multiplied by 365 days.
(3) We calculate trade and bills payables turnover days of our paper packaging business using the average of the
beginning and ending balances of trade and bills payables of our paper packaging business for the relevant year,
divided by the corresponding cost of sales of our paper packaging business for the same year, multiplied by 365
days.
Our trade and bills payables turnover days increased from 55.5 days in 2022 to 58.6 days in 2023,
which was primarily attributable to an increase in trade and bills payables resulting from the increase in
advertising costs payable to third-party digital marketing service providers for our cross-border social
e-commerce business. Our trade and bills payables turnover days increased to 79.6 days in 2024, which
was primarily due to the increase in trade and bills payables from the increased use of bills payable for
our paper packaging business and the decrease in costs in raw materials and goods and logistics services
following the decrease in orders under our cross-border social e-commerce business in 2024.
Our trade and bills payables turnover days of our cross-border social e-commerce business
increased from 47.0 days in 2022 to 54.0 days in 2023, primarily due to the increase in advertising costs
payable to third-party digital marketing service providers, in line with the growth of our cross-border
social e-commerce business. Our trade and bills payables turnover days of our cross-border social
e-commerce business increased from 54.0 days in 2023 to 72.0 days in 2024, primarily due to the
decrease in costs in raw materials and goods and logistics services following the decrease in orders
under our cross-border social e-commerce business in 2024.
Our trade and bills payables turnover days of our paper packaging business increased from 65.9
days in 2022 to 70.4 days in 2023, primarily due to increases in payables associated with the
procurement of additional equipment and construction in progress to support our business growth. Our
trade and bills payables turnover days of our paper packaging business increased to 86.1 days in 2024,
primarily due to the increased use of bills payable and the relatively stable level of cost of sales for our
paper packaging business.
FINANCIAL INFORMA TION
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As of March 31, 2025, RMB575.9 million, or 80.4%, of our trade and bills payables as of
December 31, 2024 had been subsequently settled. During the Track Record Period and up to the Latest
Practicable Date, we had no material defaults in our trade and bills payables.
Other Payables and Accruals
Our other payables and accruals primarily represent (i) payroll and welfare payables and (ii)
deposits and other payable. Our payables are non-interest-bearing. The following table sets forth a
breakdown of our other payables and accruals as of the dates indicated:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Other Payables and Accruals
Payroll and welfare payables 61,230 74,738 94,319
Repurchase obligation for restricted
shares – 62,766 47,101
Deposits and other payable 35,909 43,592 31,336
Others 18,303 7,253 8,565
Total 115,442 188,349 181,321
Note: Others primarily represents other tax payables.
Our other payables and accruals as of December 31, 2022, 2023 and 2024 were RMB115.4
million, RMB188.3 million and RMB181.3 million, respectively. Our other payables and accruals
increased from RMB115.4 million as of December 31, 2022 to RMB188.3 million as of December 31,
2023, primarily due to our repurchase obligation under the 2023 Restricted Share Incentive Plan which
was adopted on August 30, 2023. Our other payables and accruals remained relatively stable at
RMB181.3 million as of December 31, 2024.
As of March 31, 2025, RMB101.4 million, or 55.9%, of our other payables and accruals as of
December 31, 2024 had been subsequently utilized.
Contract Liabilities
We recognize a contract liability when a payment is received or a payment is due (whichever is
earlier) from a customer before we transfer the related services. Contract liabilities are recognized as
revenue when we perform the contract (i.e., transfers control of the related services to the customer).
Our contract liabilities primarily consist of: (i) advances received from our FMCG enterprise customers
in our paper packaging business and (ii) cash collected in advance by our payment service providers in
our cross-border social e-commerce business. Our contract liabilities increased from RMB12.9 million
as of December 31, 2022 to RMB14.8 million as of December 31, 2023 which was primarily due to an
increase in the advances we received associated with our other businesses. Our contract liabilities
increased to RMB17.9 million as of December 31, 2024, primarily attributable to the increase in
advances received from our FMCG enterprise customers in our paper packaging business.
FINANCIAL INFORMA TION
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As of March 31, 2025, RMB17.3 million, or 96.8%, of our contract liabilities as of December 31,
2024 had been subsequently utilized and recognized in revenue.
Tax Payable
Our tax payable primarily consists of income tax payables. Our tax payable as of December 31,
2022, 2023 and 2024 were RMB30.8 million, RMB40.2 million and RMB8.6 million, respectively. Our
tax payable increased from RMB30.8 million as of December 31, 2022 to RMB40.2 million as of
December 31, 2023, which was primarily due to an increase in taxable profit. Our tax payable decreased
to RMB8.6 million as of December 31, 2024, primarily due to the payment of income tax provision for
2023.
Deferred Income
Our deferred income represents government grants relating to capital expenditure incurred for
property, plant and equipment which are deferred and amortized over the estimated useful lives of the
respective assets. Our deferred income remained relatively stable at RMB32.4 million as of December
31, 2022, RMB34.0 million as of December 31, 2023, and RMB30.9 million as of December 31, 2024.
Deferred Tax Liabilities
Our deferred tax liabilities primarily arise from fair value adjustment arising from acquisition of
subsidiaries, right-of-use assets and reduction in fixed assets. Our deferred tax liabilities decreased
from RMB7.4 million as of December 31, 2022 to RMB3.7 million as of December 31, 2023, primarily
due to the decrease in the temporary differences attributable to right-of-use assets. Our deferred tax
liabilities remained relatively stable at RMB2.7 million as of December 31, 2024.
FINANCIAL INFORMA TION
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LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity and Working Capital
The following table sets forth a summary of our liquidity and working capital as of the dates
indicated:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CURRENT ASSETS
Inventories 483,669 456,076 447,889 426,047
Trade and bills receivables 474,731 488,624 553,885 525,783
Prepayments, other receivables and
other assets 199,929 162,818 141,874 150,134
Amounts due from related parties – 1,453 1,243 1,009
Pledged deposits 94,971 41,390 67,971 84,814
Time deposits 1,018 43,231 50,169 64,228
Cash and cash equivalents 852,071 1,062,110 711,062 716,320
Total current assets 2,106,389 2,255,702 1,974,093 1,968,335
CURRENT LIABILITIES
Trade and bills payables 512,500 640,520 716,560 682,878
Other payables and accruals 115,442 188,349 181,321 146,272
Contract liabilities 12,949 14,829 17,858 9,698
Interest-bearing bank borrowings 295,644 103,042 121,126 170,204
Lease liabilities 23,948 25,012 34,678 33,962
Tax payable 30,817 40,225 8,645 12,093
Amounts due to related parties 3,117 1,364 972 723
Other current liabilities 944 3,663 3,227 3,325
Total current liabilities 995,361 1,017,004 1,084,387 1,059,155
NET CURRENT ASSETS 1,111,028 1,238,698 889,706 909,180
As of December 31, 2024, we had net current assets of RMB889.7 million, as compared to net
current assets of RMB1,238.7 million as of December 31, 2023, primarily due to (i) an increase in trade
and bills payables, (ii) a decrease in cash and cash equivalents, and (iii) a decrease in prepayments,
other receivables and other assets, partially offset by an increase in trade and bills receivables.
As of December 31, 2023, we had net current assets of RMB1,238.7 million, as compared to
RMB1,111.0 million as of December 31, 2022, primarily due to (i) the increases in cash and cash
equivalents and (ii) the decrease in interest-bearing bank borrowings, partially offset by (iii) increases
in trade and bills payables and the decrease in pledged deposits.
FINANCIAL INFORMA TION
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Cash Flows
During the Track Record Period and up to the Latest Practicable Date, we had funded our cash
requirements principally from cash generated from our operating activities and bank borrowings. As of
December 31, 2022, 2023 and 2024, we had cash and cash equivalents of RMB852.1 million,
RMB1,062.1 million and RMB711.1 million, respectively. The following table is a summary of our cash
flow data from our consolidated statement of cash flows for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Net cash flows generated from operating
activities 390,955 725,599 386,678
Net cash flows (used in) investing
activities (183,604) (282,387) (337,097)
Net cash flows (used in) financing
activities (31,968) (237,329) (394,574)
Net increase/(decrease) in cash and cash
equivalents 175,383 205,883 (344,993)
Cash and cash equivalents at beginning
of the year 666,852 852,071 1,062,110
Effect of exchange rate differences, net 9,836 4,156 (6,055)
Cash and cash equivalents at end of
the year 852,071 1,062,110 711,062
Net Cash Flows Generated From Operating Activities
Our net cash flows generated from operating activities consist of profit before income tax adjusted
for certain non-cash or non-operating activities related items and changes in working capital.
For the year ended December 31, 2024, we recorded net cash generated from operating activities
of RMB386.7 million, which was primarily attributable to profit before tax of RMB218.1 million, (i) as
adjusted by adding back non-cash items or non-operating items, which principally included (a) changes
in working capital of RMB438.4 million, (b) depreciation of property, plant and equipment of
RMB105.7 million, (c) depreciation of right-of-use assets of RMB36.5 million and (d) equity-settled
share-based payment expenses of RMB17.3 million. Changes in working capital mainly represented an
increase in trade and bills payables of RMB80.9 million, a decrease in prepayments, other receivables
and other assets of RMB55.9 million, and an increase in other payables and accruals of RMB22.4
million, partially offset by an increase in trade and bills receivables of RMB81.5 million and an increase
in pledged deposits of RMB31.1 million.
FINANCIAL INFORMA TION
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For the year ended December 31, 2023, our net cash generated from operating activities was
RMB725.6 million, primarily attributable to profit before tax of RMB386.5 million, as (i) adjusted by
adding back non-cash items or non-operating items, which principally included (a) depreciation of
property, plant and equipment of RMB94.6 million, (b) depreciation of right-of-use assets of RMB35.1
million, (c) equity-settled share-based payment expenses of RMB26.4 million, (d) impairment of
inventories of RMB19.5 million and (e) impairment of deposits and other receivables of RMB16.4
million, and (ii) adjusted by changes in working capital of RMB163.8 million. Changes in working
capital mainly represented an increase in trade and bills payables of RMB82.2 million, an increase in
other payables and accruals of RMB50.6 million and a decrease in pledged deposits of RMB38.8
million, partially offset by an increase in trade and bills receivables of RMB34.1 million.
For the year ended December 31, 2022, our net cash generated from operating activities was
RMB391.0 million, primarily attributable to profit before tax of RMB213.9 million, as (i) adjusted by
adding back non-cash items or non-operating items, which principally included (a) depreciation of
property, plant and equipment of RMB91.5 million, (b) impairment of deposits and other receivables of
RMB64.0 million, (c) finance costs of RMB21.6 million and (d) depreciation of right-of-use assets of
RMB21.3 million, and (ii) negatively adjusted by changes in working capital of RMB17.1 million.
Changes in working capital mainly represented an increase in trade and bills receivables of RMB70.2
million and an increase in inventories of RMB63.0 million, partially offset by a decrease in
prepayments, other receivables and other assets of RMB51.4 million and an increase in trade and bills
payables of RMB49.4 million.
Net Cash Flows Used in Investing Activities
Our net cash flows used in investing activities primarily consist of (i) purchase of deposits with
original maturity of more than three months when acquired and (ii) purchase of items of property, plant
and equipment.
For the year ended December 31, 2024, our net cash used in investing activities was RMB337.1
million, primarily attributable to (i) purchase of deposits with original maturity of more than three
months when acquired of RMB701.1 million, (ii) purchase of items of property, plant and equipment of
RMB132.7 million, and (iii) purchase of financial assets at fair value through profit or loss of
RMB130.9 million, partially offset by proceeds from maturity of deposits with original maturity of
more than three months when acquired of RMB646.1 million.
For the year ended December 31, 2023, our net cash used in investing activities was RMB282.4
million, primarily attributable to (i) purchase of deposits with original maturity of more than three
months when acquired of RMB560.3 million and (ii) purchase of items of property, plant and equipment
of RMB198.2 million, mainly associated with the addition of equipment and construction in progress
for our paper packaging business, partially offset by proceeds from maturity of deposits with original
maturity of more than three months when acquired of RMB504.5 million.
For the year ended December 31, 2022, our net cash used in investing activities was RMB183.6
million, primarily attributable to (i) purchase of deposits with original maturity of more than three
months when acquired of RMB125.1 million and (ii) purchase of items of property, plant and equipment
of RMB137.1 million, mainly associated with the addition of equipment and construction in progress
for our paper packaging business, partially offset by proceeds from disposal of deposits with original
maturity of more than three months of RMB108.2 million.
FINANCIAL INFORMA TION
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Net Cash Flows Used in Financing Activities
Our net cash flows used in financing activities primarily consist of (i) repayment of
interest-bearing bank loans and (ii) dividends paid.
For the year ended December 31, 2024, our net cash used in financing activities was RMB394.6
million, primarily attributable to (i) dividends payment of RMB201.9 million, (ii) repayment of
interest-bearing bank borrowings of RMB196.2 million, and (iii) repurchase of shares of RMB75.9
million, partially offset by proceeds from interest-bearing bank borrowings of RMB185.8 million.
For the year ended December 31, 2023, our net cash used in financing activities was RMB237.3
million, primarily attributable to (i) repayment of interest-bearing bank borrowings of RMB494.1
million, (ii) dividends paid of RMB175.2 million and (iii) principal portion of lease payments of
RMB39.2 million, partially offset by proceeds received from interest-bearing bank borrowings of
RMB440.6 million and proceeds received from restricted shares granted under share incentive plans of
RMB62.8 million.
For the year ended December 31, 2022, our net cash used in financing activities was RMB32.0
million, primarily attributable to (i) repayment of bank loans of RMB443.9 million and (ii) repurchase
of unvested restricted shares of RMB117.6 million mainly in connection with cancelation of the 2021
Restricted Share Incentive Plan in 2022 (see “History and Corporate Structure – Our Corporate History
– Adoption and Cancelation of the 2021 Restricted Share Incentive Plan” for details), partially offset by
proceeds from interest-bearing bank loans of RMB523.2 million.
Working Capital Sufficiency
Taking into account the financial resources available to us, including the estimated net proceeds
from the Global Offering, cash flow generated from our operations, facilities available to us and cash
and cash equivalents on hand, our Directors are of the opinion that we will have sufficient funds to meet
our working capital requirements and financial requirements for capital expenditure for at least the next
12 months from the date of this Prospectus.
CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period were primarily in connection with
additions of property, plant and equipment, land use rights and other intangible assets. For each year of
the Track Record Period, our capital expenditures were RMB175.3 million, RMB228.9 million and
RMB124.6 million, respectively.
We funded our cash needs principally from cash generated from our operating activities and bank
borrowings. See “Business – Our Strategies” and “Future Plans and Use of Proceeds” in this Prospectus
for additional details of our current expansion plans. Our current capital expenditure plans for any
future period are subject to change, and we may adjust our capital expenditures according to our future
cash flows, results of operations and financial condition, our business plans, the market conditions and
various other factors we believe to be appropriate.
FINANCIAL INFORMA TION
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INDEBTEDNESS
The following table sets forth a breakdown of our indebtedness as of the dates indicated:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Borrowings 312,193 258,617 248,193 276,021
Lease liabilities 77,438 88,385 84,143 77,348
389,631 347,002 332,336 353,369
Borrowings
As of December 31, 2022, 2023 and 2024, and March 31, 2025, we had borrowings of RMB312.2
million, RMB258.6 million, RMB248.2 million and RMB276.0 million, respectively.
The following table sets out our borrowings as of the dates indicated:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Non-current
Bank loans – secured 8,349 147,575 127,067 80,167
Bank loans – unsecured 8,200 8,000 – 25,650
Current
Bank loans – secured 234,348 55,919 29,522 72,506
Bank loans – unsecured 61,087 40,035 79,054 84,017
Current portion of long-term bank
loans – secured – 6,879 4,543 4,420
Current portion of long-term bank
loans – unsecured 209 209 8,007 9,261
Total 312,193 258,617 248,193 276,021
Our total borrowings decreased from RMB312.2 million as of December 31, 2022 to RMB258.6
million as of December 31, 2023, primarily due to repayment of loans partially offset by new
borrowings with a term of more than one year for working capital. Our total borrowings remained
relatively stable at RMB248.2 million as of December 31, 2024.
FINANCIAL INFORMA TION
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The following table sets forth the maturity profile of our borrowings as of the dates indicated
based on contractual undiscounted payments:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within one year 296,827 108,713 124,018 174,527
One year to five years 18,582 162,322 130,351 106,986
Total 315,409 271,035 254,369 281,513
As of December 31, 2022, 2023 and 2024, and March 31, 2025, the contractual interest rate of our
current bank loans ranged from 1.58% to 4.00%, 2.55% to 4.00%, 2.40% to 4.00% and 2.55% to 4.00%,
respectively. The effective interest rate of our non-current bank loans ranged from 3.50% to 4.00%,
2.55% to 4.00%, 2.55% to 3.50% and 2.00% to 4.00% as of December 31, 2022, 2023 and 2024, and
March 31, 2025, respectively. For details of the securities and guarantees for our borrowings, see Note
30 to the Accountant’s Report in Appendix IA to this Prospectus. As of March 31, 2025, we had
committed and unrestricted available credit facilities of RMB485.1 million. We plan to draw down such
credit facilities should any capital expenditure need arise in the future.
Under the terms of one of our loan agreements, we are required to comply with a financial
covenant that requires our liabilities-to-assets ratio not higher than 70%. Such ratio shall be calculated
based on our latest financial statements which we are required to provide on a quarterly basis. As of the
Latest Practicable Date, we were in compliance with covenants under such credit agreement.
Our Directors confirm that as of the Latest Practicable Date, the agreements under our borrowings
did not contain any covenant that would have a material adverse effect on our ability to make additional
borrowings or issue debt or equity securities in the future. Our Directors further confirm that we had no
material defaults in bank and other borrowings, nor did we breach any covenants during the Track
Record Period and up to the Latest Practicable Date. Our Directors further confirm that during the Track
Record Period and up to the Latest Practicable Date, we did not experience any difficulty in obtaining
credit facilities, or withdrawal of facilities or request for early repayment.
FINANCIAL INFORMA TION
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Lease Liabilities
As of December 31, 2022, 2023 and 2024, and March 31, 2025, we had lease liabilities of
RMB77.4 million, RMB88.4 million, RMB84.1 million, and RMB77.3 million respectively.
The following table sets forth our lease liabilities as of the dates indicated:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current portion 23,948 25,012 34,678 33,962
Non-current portion 53,490 63,373 49,465 43,386
Total 77,438 88,385 84,143 77,348
Our lease liabilities increased from RMB77.4 million as of December 31, 2022 to RMB88.4
million as of December 31, 2023, primarily due to the additions of our warehouses and office premises.
Our lease liabilities remained relatively stable at RMB84.1 million as of December 31, 2024 and
RMB77.3 million as of March 31, 2025.
The following table categorizes our lease liabilities into relevant maturity groups based on the
undiscounted payments:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Within one year 22,106 26,833 37,397 37,020
One year to five years 47,754 61,513 53,627 46,062
Over five years 9,638 6,957 – −
Total 79,498 95,303 91,024 83,082
As of March 31, 2025, our lease liabilities amounted to RMB77.3 million, certain of which were
secured by the rental deposits and all of which were unguaranteed.
FINANCIAL INFORMA TION
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Contingent Liabilities
During the Track Record Period and up to the Latest Practicable Date, we had no contingent
liabilities.
Indebtedness Statement
Save as disclosed above, as of December 31, 2022, 2023 and 2024, and March 31, 2025, we did not
have any other loan capital issued and outstanding or agreed to be issued, bank overdrafts, borrowings
and other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance
credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material
contingent liabilities. Our Directors confirm that there has not been any material change in our
indebtedness since March 31, 2025 and up to the Latest Practicable Date.
CAPITAL COMMITMENTS
The following table sets forth our capital commitments, representing our capital commitments that
were contracted, but not provided for, in relation to the purchase of property, plant and equipment for
the expansion of our business, as of the dates indicated:
As of December 31,
As of
March 31,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Contracted, but not provided for
purchase of property, plant and
equipment 86,474 73,125 11,455 26,184
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet commitments or
arrangements.
MATERIAL RELATED PARTY TRANSACTIONS
Transactions with Related Parties
During the Track Record Period, we entered into a number of related party transactions mainly
with companies in which we invested, including primarily purchase of personal protection equipment
and masks manufactured by such a company for sale to our consumers. See Note 43 to the Accountants’
Report set out in Appendix IA to this Prospectus for further details about our related party transactions
during the Track Record Period. None of such related party transactions constitute a connected
transaction or continuing connected transaction for the purpose of Chapter 14A of the Listing Rules.
Our Directors are of the view that each of the related party transactions set out in Note 43 to the
Accountants’ Report in Appendix IA to this Prospectus was conducted on an arm’s length basis and
would not distort our track record results or cause our historical results to be not reflective of our future
performance.
FINANCIAL INFORMA TION
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KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates or for the periods indicated:
For the year ended December 31,
2022 2023 2024
Profitability ratios:
Gross profit margin (1) 40.5% 46.4% 43.8%
Net profit margin (2) 3.2% 5.0% 3.3%
Adjusted net profit margin
(non-IFRS measure) (3) 3.2% 5.4% 3.6%
Return on equity (4) 8.5% 14.9% 8.2%
Return on total assets (5) 5.5% 9.7% 5.2%
As of December 31,
2022 2023 2024
Liquidity ratios:
Current ratio (6) 2.1 2.2 1.8
Quick ratio (7) 1.6 1.8 1.4
Inventory turnover days (8) 52.5 49.1 54.9
– Inventory turnover days of
cross-border social e-commerce
business
(9) 33.4 31.2 36.9
– Inventory turnover days of
paper packaging business (10) 58.7 57.4 54.5
Capital adequacy ratio:
Debt-to-equity ratio (11) 14.6% 11.2% 11.2%
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated using profit for the year divided by revenue and multiplied by 100%.
(3) Adjusted net profit margin (non-IFRS measure) is calculated using adjusted profit for the year (non-IFRS measure)
divided by revenue and multiplied by 100%. For details of the adjusted profit of the year (non-IFRS measure), see
“– Non-IFRS Measures”.
(4) Return on equity ratio is calculated using profit for the year as a percentage of the average balance of total equity at
the beginning and the end of the year and multiplied by 100%.
(5) Return on total assets ratio is profit for the year as a percentage of the average balance of total assets at the
beginning and the end of the year and multiplied by 100%.
(6) Current ratio is calculated using total current assets divided by total current liabilities.
(7) Quick ratio is calculated using total current assets less inventories divided by total current liabilities.
(8) Inventory turnover days is calculated using the average of the beginning and ending balances of total inventories for
the relevant year, divided by the corresponding total cost of sales for the same year, multiplied by 365 days.
FINANCIAL INFORMA TION
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(9) Inventory turnover days of our cross-border social e-commerce business is calculated using the average of the
beginning and ending balances of inventories of our cross-border social e-commerce business for the relevant year,
divided by the corresponding cost of sales of our cross-border social e-commerce business for the same year,
multiplied by 365 days.
(10) Inventory turnover days of our paper packaging business is calculated using the average of the beginning and ending
balances of inventories of our paper packaging business for the relevant year, divided by the corresponding cost of
sales of our paper packaging business for the same year, multiplied by 365 days.
(11) Debt-to-equity ratio is calculated using total debt (being the carrying balance of the interest-bearing bank
borrowings) divided by total equity and multiplied by 100%.
Gross Profit Margin
For each year of the Track Record Period, our gross profit margin was 40.5%, 46.4% and 43.8%,
respectively. See “– Review of Historical Results of Operations” for factors affecting our gross profit
margin during the respective periods.
Net Profit Margin
For each year of the Track Record Period, our net profit margin was 3.2%, 5.0% and 3.3%,
respectively. See “– Review of Historical Results of Operations” for factors affecting our net profit
margin during the respective periods.
Adjusted Net Profit Margin (Non-IFRS Measure)
For each year of the Track Record Period, our adjusted net profit margin (non-IFRS measure) was
3.2%, 5.4% and 3.6%, respectively.
Return on Equity
Our return on equity increased from 8.5% in 2022 to 14.9% in 2023, primarily attributable to the
significant increase in our profit for the year. Our return on equity decreased to 8.2% in 2024, primarily
attributable to the decrease in our profit for the year ended December 31, 2024.
Return on Total Assets
Our return on total assets increased from 5.5% in 2022 to 9.7% in 2023, primarily attributable to
the significant increase in our profit for the year. Our return on total assets decreased to 5.2% in 2024,
primarily attributable to the decrease in our profit for the year ended December 31, 2024.
Current Ratio
Our current ratio remained relatively stable at 2.1, 2.2 and 1.8 as of December 31, 2022, 2023 and
2024, respectively.
Quick Ratio
Our quick ratio remained relatively stable at 1.6, 1.8 and 1.4 as of December 31, 2022, 2023 and
2024, respectively.
FINANCIAL INFORMA TION
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Inventory Turnover Days
For each year of the Track Record Period, our inventory turnover days were 52.5 days, 49.1 days
and 54.9 days, respectively. See “– Selected Items from the Consolidated Balance Sheets – Inventories”
for details.
Debt-to-equity Ratio
Our debt-to-equity ratio decreased from 14.6% as of December 31, 2022 to 11.2% as of December
31, 2023, primarily due to the decrease in interest-bearing bank borrowings. Our debt-to-equity ratio
remained relatively stable at 11.2% as of December 31, 2024.
TRANSFER PRICING ARRANGEMENT
During the Track Record Period, we conducted our operations primarily through our subsidiaries
in Mainland China and Hong Kong SAR. We primarily conducted our cross-border e-commerce sales
activities through Lucky Ecommerce and JYK Ecommerce, our subsidiaries in Hong Kong SAR. In this
process, our subsidiaries in Mainland China, including Zhengzhou Jikeyin, Xi’an Jikeyin and Xi’an
Jinyinke, were responsible for the provision of the services related to IT and technical support, supply
chain management, and marketing support, to Lucky Ecommerce and JYK Ecommerce (the “ Covered
Transactions ”). With the help of our subsidiaries in Mainland China, Lucky Ecommerce and JYK
Ecommerce then sold the products to our overseas customers through landing pages on third-party
e-commerce platforms. Set out below are the logistics, fund and service flow between Mainland China
and Hong Kong SAR:
Xi’an Jikeyin
Lucky Ecommerce
JYK Ecommerce
Zhengzhou Jikeyin
Xi’an Jinyinke
ConsumersSuppliers
Our warehouses in
the PRC
Payment for goods
Products
IT and
technical support
IT and technical
support, supply
chain management
and marketing
support
Service ﬂow
Overseas warehouses
ProductsProducts
Payment for
services
Payment for
services
Payment for
goods
Logistics ﬂow
Funds ﬂow
We have engaged an international professional accounting firm as an independent transfer pricing
consultant (the “ Transfer Pricing Advisor ”) to conduct a transfer pricing review and benchmarking
studies on the Covered Transactions during the Track Record Period to assess whether our transfer
pricing arrangements were consistent with the arm’s length principle from the perspective of Mainland
China and Hong Kong SAR’s transfer pricing regulations.
FINANCIAL INFORMA TION
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The Transfer Pricing Advisor selected transactional net margin method (“ TNMM ”) as the most
appropriate transfer pricing method to assess whether the transfer pricing arrangements related to the
Covered Transactions were consistent with the arm’s length principle. TNMM compares the operating
profit margin of the tested parties involved in the Covered Transactions with the same of comparable
independent parties. After a series of independent screening and comparison, the Transfer Pricing
Advisor concluded that the weighted average operating margin of Lucky Ecommerce and JYK
Ecommerce during the Track Record Period, was 0.56% and 2.86%, respectively, which fell within the
inter-quartile range of the operating margin of the comparable companies, being 0.26% to 6.28%, and
the transfer pricing arrangements for the Covered Transactions were consistent with the arm’s length
principle during the Track Record Period based on the prevailing transfer pricing regulations in the PRC
and Hong Kong SAR.
Our Directors confirm that during the Track Record Period and up to the Latest Practicable Date,
we were not aware of any outstanding enquiries, audit, investigation or challenge by any tax authorities
in Hong Kong SAR and Mainland China in relation to our intra-group transactions and transfer pricing
arrangements.
We have been and will continue to closely monitor our transfer pricing arrangement including
reviewing the reasonableness of the pricing policy of intra-group transactions from time to time.
However, similar to other matters relating to tax, we cannot assure that our transfer pricing arrangement
will not be subject to review and possible challenge by any tax authorities in future, though the
Directors believe that we have reasonable grounds to defend ourselves against such possible challenge.
Please see the section headed “Risk Factors – Risks Relating to Our Business and Industry – We may be
subject to risks associated with our transfer pricing arrangement” in this Prospectus for further details.
MARKET RISKS
We are exposed to various types of financial and market risks, including foreign currency risk,
credit risk and liquidity risk. Our Directors review and agree on financial management policies and
practices for managing each of these risks. See Note 46 to the Accountants’ Report set out in Appendix
IA to this Prospectus for further details.
Foreign Currency Risk
We have transactional currency exposures, which arise from overseas sales of products in our
cross-border social e-commerce business and paper packaging products in our paper packaging
business, and purchases of logistics and advertisement services with payments to overseas suppliers. We
sell products to customers in various countries and regions with most of our monetary assets, liabilities
and transactions principally denominated in RMB, U.S. dollars and Japanese yen. We are exposed to
foreign currency risk arising from fluctuations in exchange rates between RMB, U.S. dollars and other
currencies where we sell our products. To mitigate our foreign exchange risk, we have adopted a prudent
foreign exchange hedging policy. Under such policy, we enter into arrangements for hedging purposes
only and not for speculative purposes. We have implemented internal procedures to monitor our hedging
transactions which include limitations on transaction types and transaction value, formulation and
review of hedging strategies in light of different risks involved and other risk management measures.
We also mitigate our foreign exchange risk through conversion of foreign currencies.
FINANCIAL INFORMA TION
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During the Track Record Period, we entered into foreign currency forward contracts for hedging
purposes. As of December 31, 2024, we did not have any outstanding foreign currency forward
contracts. Major terms of the foreign currency forward contracts we entered into during the Track
Record Period and the realized gain/loss from each contract were as follows:
For the year ended December 31, 2022:
Notional amount Forward contract rates Contract date Expiry date
Realized
gains/(losses)
US$2,000,000 US$1 to RMB6.3536 January 28, 2022 February 11, 2022 RMB15,200
US$4,000,000 US$1 to RMB6.3663 March 14, 2022 June 14, 2022 RMB(1,530,800)
US$3,000,000 US$1 to RMB6.3986 March 15, 2022 June 15, 2022 RMB(1,037,400)
US$2,000,000 US$1 to RMB6.444 April 21, 2022 July 21, 2022 RMB(607,000)
US$2,000,000 US$1 to RMB6.5636 April 27, 2022 July 27, 2022 RMB(345,400)
US$2,000,000 US$1 to RMB6.5958 April 29, 2022 July 29, 2022 RMB(237,800)
For the year ended December 31, 2023:
Notional amount Forward contract rates Contract date Expiry date
Realized
gains/(losses)
US$4,000,000 US$1 to RMB 6.9101 May 11, 2023 June 11, 2023 RMB(822,000)
US$3,000,000 US$1 to RMB 6.8771 March 29, 2023 June 29, 2023 RMB(1,161,900)
For the year ended December 31, 2024:
Notional amount Forward contract rates Contract date Expiry date
Realized
gains/(losses)
US$1,500,000 US$1 to RMB 7.2422 May 24, 2024 June 11, 2024 RMB193,000
US$2,000,000 US$1 to RMB 7.2832 June 26, 2024 July 12, 2024 RMB303,000
US$2,000,000 US$1 to RMB 7.0975 October 15, 2024 November 18, 2024 RMB(186,000)
US$2,000,000 US$1 to RMB 7.1410 November 6, 2024 December 9, 2024 RMB(89,000)
FINANCIAL INFORMA TION
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Credit Risk
Credit risk arises mainly from the risk that counterparties may default on the terms of their
agreements. Credit risk also arises from customer concentration. As of December 31, 2022, 2023 and
2024, we had certain concentration of credit risk as 51.4%, 55.9% and 50.5% of the book balance of our
trade receivable was due from our five largest customers for each year during the Track Record Period,
respectively.
We have established policies to evaluate credit risk when accepting new business and to limit our
credit exposure to individual clients. We trade only with recognized and creditworthy clients and third
parties. It is our policy that all clients who wish to trade on credit terms are subject to credit verification
procedures. In addition, we monitor receivable balances on an on-going basis and our exposure to bad
debts is insignificant except for items individually assessed. For transactions that are not denominated
in the functional currency of the relevant operating unit, we do not offer credit terms without the
specific approval of the deputy general manager.
Liquidity Risk
We aim to maintain sufficient cash and credit lines to meet our liquidity requirements. We monitor
our exposure to liquidity risk by monitoring the current ratio, which is calculated by comparing the
current assets with the current liabilities.
Our objective is to maintain a balance between continuity of funding and flexibility through the
use of interest-bearing loans. Our policy is that all the borrowings should be approved by the chief
financial officer.
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following table of our unaudited pro forma adjusted consolidated net tangible assets was
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 our net tangible assets as of December 31, 2024 as if it had taken place on that
date. The table of unaudited pro forma adjusted consolidated net tangible assets of our Group have been
prepared for illustrative purpose only and, because of their hypothetical nature, they may not give a true
picture of our net tangible assets had the Global Offering been completed as of December 31, 2024 or at
any future date.
FINANCIAL INFORMA TION
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--- page 407 ---
The unaudited pro forma adjusted consolidated net tangible assets set out below are calculated
based on our audited consolidated net assets attributable to owners of our Company as of December 31,
2024, as shown in the Accountants’ Report, the text of which is included in Appendix IA to this
Prospectus, and is adjusted as described below:
Consolidated
net tangible
assets of our
Group
attributable to
owners of our
Company as of
December 31,
2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated
net tangible
assets of our
Group
attributable to
owners of our
Company as of
December 31,
2024
Unaudited pro forma
adjusted consolidated
net tangible assets per Share
RMB’000
(Note 1)
RMB’000
(Note 2)
RMB’000 RMB
(Note 3)
(HK$
equivalent)
(Note 4)
Based on an Offer Price
of HK$7.48 per Offer
Share 2,172,529 373,179 2,545,708 5.62 6.06
Based on an Offer Price
of HK$10.68 per
Offer Share 2,172,529 564,461 2,736,990 6.05 6.52
Notes:
(1) The consolidated net tangible assets attributable to owners of our Company as of December 31, 2024 is arrived at
after deducting other intangible assets of RMB19,910,000 and goodwill of RMB9,585,000 as at December 31, 2024
from the consolidated equity attributable to owners of the Company of RMB2,202,024,000 as at December 31, 2024
set out in the Accountants’ Report in Appendix IA in this Prospectus.
(2) The estimated net proceeds from the Global Offering are based on the estimated low end and high end offer prices of
HK$7.48 and HK$10.68 per H Share after deduction of the underwriting fees and commissions and other related
expenses payable by our Group (excluding the listing expenses that have been charged to profit or loss during the
Track Record Period).
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at by dividing the unaudited
pro forma adjusted net tangible assets by 452,679,288 Shares, being the number of Shares in issue assuming that the
Global Offering had been completed on December 31, 2024 and excluding the impact of the subsequent events: (i)
the Company repurchased 744,200 A shares with the consideration of RMB9.6 million from January 1, 2025 to April
30, 2025 and (ii) on 15 May 2025, the Company announced a cash dividend of RMB59,724,000 to be distributed.
Including the impact of subsequent events, the unaudited pro forma adjusted consolidated net tangible assets per
Share as of December 31, 2024 would be HK$5.90 and HK$6.35, based on an Offer Price of HK$7.48 and
HK$10.68 per Share, respectively.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong Kong dollars at
an exchange rate of RMB1.00 to HK$1.0781.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of the Group to
reflect any trading result or other transactions entered into subsequent to December 31, 2024.
FINANCIAL INFORMA TION
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--- page 408 ---
DIVIDENDS
During the Track Record Period, we declared (i) an interim dividend for the first three quarters in
2022 of RMB99.5 million in January 2023, representing a dividend of RMB2.63 (inclusive of tax) for
every 10 A Shares of our Company, (ii) an interim dividend for the half year in 2023 of RMB75.7
million in September 2023, representing a dividend of RMB2.00 (inclusive of tax) for every 10 A Shares
of our Company, (iii) an annual dividend for 2023 of RMB136.8 million in March 2024, representing a
dividend of RMB3.60 (inclusive of tax) for every 10 A Shares of our Company (based on the number of
A Shares as of the date of approval of the dividend declaration by our Board of Directors, excluding the
A Shares repurchased and held as treasury shares), and (iv) an interim dividend for the first three
quarters of 2024 of RMB68.2 million in November 2024, representing a dividend of RMB1.80
(inclusive of tax) for every 10 A Shares of our Company (based on the number of A Shares as of the date
of approval of the dividend declaration by our Board of Directors, excluding the A Shares repurchased
and held as treasury shares). All such dividends have been fully settled. Furthermore, in May 2025, we
also declared the distribution of annual dividend for 2024, according to which an aggregate amount of
RMB59.7 million, representing a dividend of RMB1.58 (inclusive of tax) for every 10 A Shares of our
Company (based on the number of A Shares as of the date of the announcement, excluding the A Shares
repurchased and held as treasury shares) is announced to be settled in cash.
As of the Latest Practicable Date, we did not maintain any fixed dividend payout policy. Our
Board of Directors may declare dividends by way of cash or shares, or a combination of both cash and
shares, after taking into account our results of operations, financial condition, cash requirements and
availability and other factors as it may deem relevant at such time. Any declaration and payment of
dividends will be subject to our constitutional documents and applicable laws. Under our Articles of
Association, our Company shall give priority to the distribution of cash dividends and declare cash
dividends once per year in principle (subject to declaration of interim dividends), in the amount of at
least 20% of our profit available for distribution generated in that year, provided that (i) our Company’s
profit available for distribution generated in the year or half-year period and accumulated profits
available for distribution are positive, (ii) our Company has sufficient cash and the payment of
dividends would not affect the sustainability of our operations, (iii) our Company’s auditor has issued
an unqualified opinion on our financial statements of that year, and (iv) our Company does not have any
significant investment plan or significant cash expenditure. Our shareholders at a general meeting must
approve any declaration of dividends, which must not exceed the amount recommended by our Board of
Directors. In addition, our Directors may from time to time pay such interim dividends as our Board of
Directors considers to be justified by our profits and overall financial requirements. No dividend shall
be declared or payable except out of our profits and reserves lawfully available for distribution. Our
future declaration of dividends may or may not reflect our historical declarations of dividends and will
be at the absolute discretion of our Board of Directors.
We may purchase Shares from time to time in the secondary market through auction trading. Share
repurchases shall be reviewed and approved by our Board of Directors. In 2022, our Company
repurchased 9,070,800 restricted shares for RMB117.6 million due to the cancelation of the 2021
Restricted Share Incentive Plan. For the year ended December 31, 2023, an aggregate of 470,900 Shares
have been repurchased by the Company with a total consideration of RMB10.1 million recognized as
treasury shares. See “History and Corporate Structure – Our Corporate History – Adoption and
Cancelation of the 2021 Restricted Share Incentive Plan” for details.
FINANCIAL INFORMA TION
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DISTRIBUTABLE RESERVES
As of December 31, 2024, our Company had distributable reserves of RMB221.8 million which
are available for distribution to our Shareholders.
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting fees
and commissions, and (ii) non-underwriting-related expenses, comprising professional fees paid to our
legal advisors and reporting accountants for their services rendered in relation to the Listing and the
Global Offering, and other fees and expenses. Assuming an Offer Price of HK$9.08 per H Share (being
the mid-point of the indicative Offer Price range stated in this Prospectus), the estimated total listing
expenses for the Global Offering are approximately RMB104.7 million (equivalent to HK$112.8
million), accounting for approximately 18.3% of our gross proceeds. Among such estimated total listing
expenses, we expect to pay underwriting-related expenses of RMB29.2 million, professional fees for
our legal advisors and reporting accountants of RMB37.2 million and other fees and expenses of
RMB38.3 million. An estimated amount of RMB13.4 million for our listing expenses is expected to be
expensed through the statement of profit or loss and an estimated amount of RMB91.2 million is
expected to be recognized directly as a deduction from equity upon the Listing.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
We confirm that, as of the Latest Practicable Date, there were no circumstances that would give
rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
RECENT DEVELOPMENT
See “Summary – Recent Development and No Material Adverse Change” in this Prospectus for
further details of the recent developments of our business, operations, financial performance and
financial positions.
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate and after
due and careful consideration, our Directors confirm that, up to the date of this Prospectus, there had
been no material adverse change in our financial or operating position or prospects since December 31,
2024, which is the end date of the periods reported on in the Accountants’ Report set out in Appendix IA
to this Prospectus, and there had been no event since December 31, 2024 and up to the date of this
Prospectus that would materially affect the information as set out in the Accountants’ Report included
in Appendix IA to this Prospectus.
FINANCIAL INFORMA TION
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--- page 410 ---
FUTURE PLANS
Our operations span across our cross-border social e-commerce business and FMCG paper
packaging business. We are committed to continuously adapting and innovating, discovering and
developing popular products and services, and empowering Chinese brands to reach the world through
digitalization. We intend to achieve this through our growth strategies. For details, please refer to the
paragraph headed “Business – Our Strategies.”
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$505.4 million, after deducting underwriting commissions, fees and estimated expenses borne by us
in connection with the Global Offering, and at the Offer Price of HK$9.08 per Share (being the
mid-point of the indicative Offer Price range of HK$7.48 and HK$10.68).
We currently intend to apply these net proceeds for the following purposes:
• Approximately 40%, or HK$202.2 million, will be allocated to overseas market expansion,
including:
(i) Approximately 30%, or HK$151.6 million, for expanding our cross-border social
e-commerce business in regions in Asia that we have not established our footprint as
well as Europe and Latin America. We intend to invest approximately (i) HK$50.6
million to partially fund our expansion in Asia; and (ii) HK$101.0 million to partially
fund our expansion in Europe and Latin America. We intend to promote products on
social media platforms in these regions and on recruiting approximately 35 to 45 sales
and marketing personnel who generally possess bachelor’s degrees with more than
three years of work experience in cross-border social e-commerce in Mainland China to
support our expansion overseas.
• Asia. We plan to expand our cross-border social e-commerce business in regions
in Southeast Asia that we have not established our footprint, such as Vietnam and
Indonesia. According to CIC, in 2024, in terms of revenue, the market size of
China’s B2C outbound social media e-commerce in the Asian market amounted to
US$29.1 billion. It is anticipated that the market size will increase to US$69.5
billion in 2029, with a CAGR of 19.0% from 2024. With the ongoing proliferation
of the mobile Internet in the Asian region, China’s B2C outbound social media
e-commerce in the Asian market is poised to exhibit significant growth potential
in the future. It is anticipated that the social media penetration rate in Asia,
excluding Mainland China, will increase to 55.0% by 2029, opening up even more
opportunities for social media e-commerce. Hence, we believe there are sufficient
opportunities for growth in the Asian market.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 411 ---
Social media e-commerce market in Southeast Asia has experienced meaningful
growth and is expected to bloom with the increase in proliferation of mobile
Internet. According to CIC, the market size of China’s B2C outbound social media
e-commerce business in Southeast Asia amounted to US$10.2 billion in 2024,
representing a year-on-year growth rate of 28.8% from the previous year. Driven
by the unique demographics structure in Southeast Asia, social media e-commerce
market in such region is expected to grow significantly in the near future.
Comparing with other regions around the world, Southeast Asia has a more
youthful and vibrant population. According to CIC, the median age of the
population in Southeast Asia is approximately 31.9 in 2024 and is expected to
increase to approximately 33.4 in 2029. Y oung people generally have higher
acceptance of Internet and social media. In addition, the utilization of social
media platforms is undergoing proliferation in Southeast Asia. The social media
penetration rate in Southeast Asia increased from 52.1% in 2020 to 59.3% in
2024. With the ongoing proliferation of the social media in Southeast Asia, the
market size of China’s B2C outbound social media e-commerce business in
Southeast Asia is expected to increase to US$24.7 billion in 2029, with a CAGR
of 19.4% from 2024, presenting sufficient market opportunities for us to expand
our operations.
Specifically, the e-commerce markets in Vietnam and Indonesia present
significant opportunities for our business. According to CIC, the market size of
China’s B2C outbound social media e-commerce market in Vietnam and Indonesia
amounted to US$3.0 billion and US$1.1 billion in 2024, respectively, in terms of
revenue.
With our experience in the Asian market, we believe we are able to capture the
market opportunities in aforementioned regions. Through years of investment in
the Asian market, we have established an extensive supply chain network and
well-structured operation process. We have deep collaboration with cross-border
logistic providers and payment service providers in the Asian market, which can
help us establish our footprint in the aforementioned regions.
• Europe and Latin America. According to CIC, as measured by revenue, the size
of China’s B2C outbound social media e-commerce business in (i) the European
market is expected to reach US$26.6 billion for 2029 from US$11.9 billion for
2024, with a CAGR of 17.5%; and (ii) the Latin American market is expected to
reach US$11.8 billion for 2029 from US$4.7 billion for 2024, with a CAGR of
20.0%. Social media e-commerce markets in Europe and Latin America are at
their early stage, which present sufficient opportunities for growth and expansion.
According to CIC, the social media e-commerce penetration rate in European and
Latin America increased from 11.4% and 11.5% in 2020 to 12.6% and 13.3% in
2024, respectively. Leveraging our experience in the Asian market, we are well
positioned to capture the growth in these regions.
Leveraging our data-driven management system and our dynamic data analytical
capabilities and our years of experiences in cross-border social e-commerce
market, we have established capabilities in discovering high quality Chinese
consumer goods to match the needs of targeted consumers.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 412 ---
(ii) Approximately 10%, or HK$50.5 million, for upgrading our logistics and warehousing
system at our warehouse in Mainland China. As we strive to enhance the diversity of
our products and efficiency of our services, our existing warehouse in Guangdong has
become inadequate, with traditional equipment and limited spaces. The condition of our
warehouse has strained the growth of our cross-border social e-commerce business. To
effectively address these challenges and bolster efficiency of our supply chain
management capabilities, we plan to invest approximately (i) HK$15.2 million to
partially fund the renovation of our existing warehouse and (ii) HK$35.3 million to
partially fund the acquisition of intelligent equipment, such as intelligent sorter,
forklift, belt line transfer equipment and weighing and loading equipment, to create an
automated, intelligent and efficient e-commerce warehouse. Through investments in
smart logistics and warehousing system, we can achieve a more efficient and
cost-effective delivery and distribution process, which can lead to increase in customer
satisfaction and loyalty as well as enhancements in our operational efficiency and
reduction in costs.
• Approximately 35%, or HK$176.9 million, will be allocated to our technology development
in (1) our research and development capabilities, (2) data analytical capabilities to enhance
our business efficiency, and (3) GiiMall to expand our revenue streams, including:
(i) Approximately 20%, or HK$101.1 million, for enhancing our R&D capabilities in AI
technologies, among which approximately (i) HK$50.5 million will be allocated to
partially fund the investments in hardware infrastructure and (ii) HK$50.6 million will
be allocated to partially fund recruitment of more research and development
professionals to support our software development.
To enhance the functionality and security of our Giikin platform, we plan to acquire
approximately 40 to 60 hardware equipment, such as high-performance computing
servers to meet the challenges of complex AI model training and GPU acceleration
cards to provide powerful acceleration support for AI model training.
To further enhance our R&D capabilities, we plan to recruit more professionals in
connection with our research and development activities to be carried out under our
new and existing research and development centers, such as development of AI
applications used to design and perform quality inspection of our paper packaging
business as well as automation of supply chain management and customer services. In
particular, we plan to recruit approximately 20 to 40 research and development
professionals with master’s degree or above, who have more than three years of
experience in AI and big data analytics, to facilitate the construction, maintenance and
upgrading of our Giikin platform and lead in-depth research and development of AI
technologies. In addition, we will also recruit one or two experienced operation and
maintenance personnel with bachelor’s degree or above to ensure the stable operation,
safety and reliability of our hardware infrastructures.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 413 ---
(ii) Approximately 10%, or HK$50.5 million, for enhancing our data analytics capabilities
in the areas of sales prediction, precision marketing, goods discovery and, purchase and
after sales services. Specifically, we intend to allocate R&D expenses in the
development of data analytics tools, such as time series analysis, machine learning
model, recommendation model, correlation rule learning and sentiment analysis, to
further enhance our data analytics capabilities, which would enhance our operational
capabilities in sales prediction, precision marketing, goods discovery and after sales
services. We believe advanced data analytics tools will allow us to draw deeper and
more accurate insights, and enhance the accuracy of our algorithms and improve the
efficacy of our product discovery and advertisement placement efforts, ultimately
translating into higher profitability.
(iii) Approximately 5%, or HK$25.3 million, for enhancing our GiiMall SaaS business.
China’s B2C outbound e-commerce market has demonstrated remarkable market
vitality and is expected to further grow as more overseas consumers embrace the
concept of online shopping. In terms of revenue, the size of China’s B2C outbound
e-commerce market was US$457.4 billion in 2024. Furthermore, the market size is
expected to reach US$927.6 billion in 2029, representing 11.4% of the global B2C
e-commerce market, with a CAGR of 15.2% from 2024. According to CIC, witnessing
the growth in China’s B2C outbound e-commerce, more and more consumer goods
SMEs are seeking opportunities to sell their products overseas. However, according to
CIC, a large number of upstream consumer goods SMEs in Mainland China do not have
the capability to front the complexity and uncertainties arising from cross-border
logistics processes such as transportation, customs clearance and tax payment, as well
as from using different currencies and payment systems, and language barriers. Such
complexity and uncertainties fostered significant business opportunities for our GiiMall
system, a one-stop service SaaS platform, helping suppliers build landing pages and
sell their products to consumers outside of Mainland China through a unified
streamlined dashboard. See “Business – Our Cross-border Social E-commerce Business
– Our Technology Capabilities – Our GiiMall SaaS Platform.”
For the past three years, we have been providing GiiMall to Mainland China-based
cross-border e-commerce suppliers on a complimentary basis for testing purposes.
Through feedbacks collected from these suppliers over the past three years, we intend
to further improve and iterate our GiiMall platform to better serve these suppliers and
pave the way for our future subscription fee-based pricing model. In particular, we plan
to build more applications, such as smart advertisements, and enhance our existing
applications, such as AI translation, automated customer service and automated image
and video processing, on GiiMall, effectively addressing the pain points of upstream
consumer goods SMEs, including language barriers, lack of marketing experience and
knowhow in overseas market and deficiencies in technology capabilities. We will
continue to strengthen the localization of GiiMall through adopting different languages.
In addition, we will continue to invest in our ERP system. We intend to build GiiMall as
an open platform that can facilitate the sharing of data and resources to facilitate
synergies among different participants. Through continuous innovation and iterative
development of GiiMall, we can equip GiiMall with advanced technologies and more
modules in order to address the changing needs of consumers while ensuring the
stability and security of the platform.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 414 ---
We intend to charge service fees for some of our more frequently used applications on
GiiMall in the future, such as order recall and automatic discount management. This
pricing strategy will help us gradually realize commercialization of GiiMall without
placing significant burden on our customers. We will adopt a fully charged subscription
fee-based pricing model after the refinement of GillMall platform. After adopting the
subscription fee-based pricing model, we intend to further promote our GiiMall SaaS
business using net proceeds received from the Global Offering through various sales
and marketing channels to reach more customers, including on-the-ground promotion
team to reach customers in specific areas, online marketing methods, such as marketing
through search engine optimization, social and emails, participation in industry
exhibitions and establishing strategic cooperation with other established players in the
industry.
• Approximately 15%, or HK$75.8 million, will be allocated to the expansion of our brands
portfolio and development of our existing self-developed brands, including:
(i) Approximately 13%, or HK$65.7 million, for expansion of our brands, among which
approximately (i) HK$26.3 million will be allocated to partially fund the external
acquisition of existing brands, and (ii) HK$39.4 million will be allocated to partially
fund the internal incubation of new brands . We intend to expand our brand portfolio to
include approximately five to eight new brands through either acquisition or internal
incubation.
We intend to, by way of purchasing all or the majority of equity interests, acquire the
whole business of the existing brands in the Asian market developed by third parties
that in the daily consumption categories (including but not limited to cosmetics,
jewelry and accessories and sportswear) that are among the top 30 suppliers in the
relevant categories as ranked by leading e-commerce platforms with distinctive brand
recognition, an existing well-established supply chain and no less than 15% customer
repurchasing rate. We plan to collaborate with third-party manufacturers, with an
intention to maximize financial returns of the acquired brands. According to CIC, such
acquisition targets are generally available in the market. We currently do not have any
specific targets or targets under negotiation. Through acquisition of existing brands, we
can also realize synergies and complementary benefits through cooperation on
resources, operations and research and development. Leveraging our experience
operating our own brands, we plan to continue to promote and market the acquired
brands through our AI technologies and research and development capabilities.
In addition, we intend recruit professionals and acquire relevant equipment to facilitate
our internal incubation process. We intend to establish a marketing center and recruit a
team of 20 to 30 marketing professionals with bachelor’s degree or above, who have
experience in brand operation, for each brands developed internally to support the
promotion and marketing of brands developed by our internal entrepreneurship teams.
We also intend to acquire relevant equipment, such as professional filming equipment
and photo and video material editing tools to support our marketing team. Our internal
incubation process provides opportunities for our employees to innovate and for our
company to increase our market share in the global cross-border social e-commerce
market and our revenue generating capabilities.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 415 ---
(ii) Approximately 2%, or HK$10.1 million, for further enhance the brand awareness of our
existing brands through continued marketing efforts on various social media platforms,
and cooperation with celebrities and KOLs to promote our own brands. Through these
marketing strategies, we can continue to strengthen the customer stickiness of our
existing brands and enhance the ranking of our brands in their respective product
categories.
• Approximately 10%, or HK$50.5 million, will be allocated to our working capital and
general corporate purposes.
The remaining balance of above-mentioned use of proceeds will be funded out of our internal
resources.
The table below sets forth the expected implementation timetable of our planned use our proceeds:
Y ears ending December 31,
2025 2026 2027 Total
(HK$ in millions)
Overseas market expansion 60.7 101.1 40.4 202.2
Enhancing research and
development capability and
improving technology
infrastructure 70.7 70.7 35.4 176.9
Development of our self-developed
brands 30.3 30.3 15.1 75.8
Working capital and general
corporate purposes 17.7 17.7 15.1 50.5
If the Offer Price is set at the high-end or the low-end of the indicative Offer Price range, being
HK$7.48 or HK$10.68 per Offer Share, respectively, the net proceeds to us from the Global Offering
will respectively increase or decrease by approximately HK$103.1 million.
If any part of our development plan does not proceed as planned for reasons such as changes in
government policies that would render the development of any of our projects not viable, or the
occurrence of force majeure events, we will carefully evaluate the situation and may reallocate the net
proceeds from the Global Offering. We will make an appropriate announcement if there is any change to
the above proposed use of proceeds or if any amount of the proceeds will be used for general corporate
purpose.
To the extent that the net proceeds of the Global Offering are not immediately used for the
purposes described above and to the extent permitted by the relevant laws and regulations, we will only
hold such funds in short-term interest-bearing accounts at licensed commercial banks and/or other
authorized financial institutions as defined under the Securities and Futures Ordinance, or applicable
laws and regulations in other jurisdictions so long as it is deemed to be in the best interests of our
Company.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 416 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
CMB International Capital Limited
(in alphabetical order)
BOCI Asia Limited
China Galaxy International Securities (Hong Kong) Co., Limited
ICBC International Securities Limited
CCB International Capital Limited
Quam Securities Limited
SDHG International Securities Limited
Fosun International Securities Limited
Long Bridge HK Limited
Livermore Holdings Limited
Sinolink Securities (Hong Kong) Company Limited
Huafu International Securities Limited
UNDERWRITING
This Prospectus is published solely in connection with the Hong Kong Public Offering. The Hong
Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional basis. The
International Offering is expected to be fully underwritten by the International Underwriters.
The Global Offering comprises the Hong Kong Public Offering of initially 6,791,000 Hong Kong
Offer Shares and the International Offering of initially 61,119,000 International Offer Shares, subject,
in each case, to reallocation on the basis as described in the section headed “Structure of the Global
Offering” in this Prospectus.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially 6,791,000
Hong Kong Offer Shares (subject to reallocation) for subscription by way of the Hong Kong Public
Offering on and subject to the terms and conditions of this Prospectus and the Hong Kong Underwriting
Agreement at the Offer Price.
Subject to (i) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares pursuant to the Global Offering on the Main Board of the Stock Exchange and such
approval not having been withdrawn; and (ii) certain other conditions set out in the Hong Kong
Underwriting Agreement, the Hong Kong Underwriters have agreed severally and not jointly to apply or
procure applications, on the terms and conditions of this Prospectus, for their respective applicable
proportions of the Hong Kong Offer Shares which are being offered but are not taken up under the Hong
Kong Public Offering.
UNDERWRITING
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The Hong Kong Underwriting Agreement is conditional on, among other things, the International
Underwriting Agreement having been signed and becoming unconditional and not having been
terminated in accordance with its terms.
Grounds for Termination
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and the
Joint Sponsors shall be entitled, in its sole and absolute discretion and by giving notice in writing to our
Company, terminate the Hong Kong Underwriting Agreement with immediate effect if at any time prior
to 8:00 a.m. on the Listing Date:
(i) there develops, occurs, exists or comes into effect:
(a) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a change or a
development involving a prospective change in existing laws or regulations, or the
interpretation or application thereof by any court or any competent governmental
authority in or affecting Hong Kong, the PRC, the United States, the United Kingdom,
the European Union (or any member thereof), Japan, Singapore, Malaysia, Taiwan,
Korea, Thailand, Saudi Arabia, Philippines, or other jurisdictions relevant to our Group
or the Global Offering (each a “ Relevant Jurisdiction ” and collectively, the “ Relevant
Jurisdictions ”);
(b) any change or development involving a prospective change, or any event or series of
events or circumstances likely to result in a change or prospective change, in any local,
national, regional or international financial, political, military, industrial, economic,
fiscal, legal, regulatory, currency, credit or market conditions or sentiments, taxation,
equity securities or currency exchange rate or controls or any monetary or trading
settlement system, or foreign investment regulations (including, without limitation, a
devaluation of the Hong Kong dollar, United States dollar or Renminbi against any
foreign currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to any
foreign currency or currencies) or other financial markets (including, without
limitation, conditions and sentiments in stock and bond markets, money and foreign
exchange markets, the inter-bank markets and credit markets) in or affecting any
Relevant Jurisdictions, or affecting an investment in the Offer Shares;
UNDERWRITING
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--- page 418 ---
(c) any event or series of events, whether in continuation, or circumstances in the nature of
force majeure (including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire, explosion,
flooding, tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion,
public disorder, paralysis in government operations, acts of war, epidemic, pandemic,
outbreak or escalation, mutation or aggravation of diseases, (including without
limitation COVID-19, SARS, MERS, H5N1, H1N1, H1N7, H7N9, Ebola, swine or
avian influenza or such related/mutated forms), accident or interruption or delay in
transportation, destruction of power plant) in or affecting any of the Relevant
Jurisdictions, or without limiting the foregoing, any local, national, regional or
international outbreak or escalation of hostilities (whether or not war is or has been
declared), act of God or act of terrorism (whether or not responsibility has been
claimed), or other state of emergency or calamity or crisis in or affecting any of the
Relevant Jurisdictions;
(d) any moratorium, suspension or limitation (including without limitation, any imposition
of or requirement for any minimum or maximum price limit or price range) on (i) the
trading in shares or securities generally on the Stock Exchange, the Shanghai Stock
Exchange, the Shenzhen Stock Exchange, the Tokyo Stock Exchange, the Singapore
Stock Exchange, the New Y ork Stock Exchange, the NASDAQ Global Market or the
London Stock Exchange; or (ii) the trading in any securities of our Company listed or
quoted on a stock exchange or an over-the-counter market;
(e) any general moratorium on banking activities in or affecting any of the Relevant
Jurisdictions or any disruption in commercial banking or foreign exchange trading or
securities settlement or clearing services, procedures or matters in or affecting any of
the Relevant Jurisdictions;
(f) other than with the prior written consent of the Overall Coordinators, the issue or
requirement to issue by our Company of a supplement or amendment to this Prospectus
or other documents in connection with the offer and sale of the Offer Shares pursuant to
the Companies (Winding Up and Miscellaneous Provisions) Ordinance or the Listing
Rules or upon any requirement or request of the Stock Exchange, the SFC, the
Shenzhen Stock Exchange and/or the CSRC;
(g) the commencement by any governmental authority or other regulatory or political body
or organization of any public action or investigation against any member of our Group
or a director, supervisors (as applicable) or a senior management member of our
Company in his/her capacity as such or announcing an intention to take any such
action;
(h) the imposition of sanctions or export controls on any member of our Group or any of
the Single Largest Group of Shareholders, or the withdrawal of trading privileges which
existed on the date of Hong Kong Underwriting Agreement, in whatever form, directly
or indirectly, by, or for, any Relevant Jurisdiction;
(i) any valid demand by creditors for repayment of indebtedness of any member of our
Group or in respect of which any member of our Group is liable prior to its stated
maturity;
UNDERWRITING
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(j) any non-compliance of this Prospectus (or any other documents used in connection with
the contemplated offering, allotment, issue, subscription or sale of any of the Offer
Shares), the CSRC filings, or any aspect of the Global Offering with the Listing Rules,
the CSRC Rules, or any other applicable laws;
(k) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any member
of our Group or any the Single Largest Group of Shareholders or any Director,
Supervisors or senior management members as named in this Prospectus;
(l) any contravention by the warrantors, any member of our Group, or any Director or
Supervisor of the Listing Rules or applicable laws;
(m) any change or prospective change, or a materialization of, any of the risks set out in the
section headed “Risk Factors” in this Prospectus;
(n) any adverse change or prospective adverse change in the earnings, results of operations,
business, business prospects, financial or trading position, conditions (financial or
otherwise) or prospects (including any litigation or claim of any third party being
threatened or instigated against any member of our Group) of our Group as a whole,
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters):
(A) has or will or may have a material adverse effect, whether directly or indirectly,
on the assets, liabilities, business, general affairs, management, prospects,
shareholders’ equity, profits, losses, results of operations, position or condition,
financial or otherwise, or performance of our Company or our Group as a whole,
or to any present or prospective shareholder of our Company in its/his/her
capacity as such;
(B) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or the
level of indications of interest under the International Offering;
(C) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of Hong Kong Underwriting Agreement, the Hong
Kong Public Offering or the Global Offering to be performed or implemented as
envisaged or to market the Global Offering or the delivery or distribution of the
Offer Shares on the terms and in the manner contemplated by the Offering
Documents (as defined below);
(D) has or will or may have the effect of making any part of Hong Kong Underwriting
Agreement (including underwriting) incapable of performance in accordance with
its terms or preventing the processing of applications and/or payments pursuant to
the Global Offering or pursuant to the underwriting thereof; or
UNDERWRITING
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(ii) there has come to the notice of the Joint Sponsor and the Overall Coordinators that:
(a) any statement contained in any of this Prospectus and the formal notice, the preliminary
offering circular, the offering circular and any other announcement, document,
materials, communications or information made, issued, given, released, arising out of
or used in connection with or in relation to the contemplated offering and sale of the
Offer Shares or otherwise in connection with the Global Offering, including, without
limitation, any information, materials and documents issued, given or presented in any
of the investor presentations and/or roadshow presentations conducted by or on behalf
of the Company in connection with the Global Offering relating to the Offer Shares (the
“Offering Documents ”), the filing materials with the CSRC and/or any notices,
announcements, advertisements, communications or other documents issued or used by
or on behalf of our Company in connection with the Hong Kong Public Offering
(including any supplement or amendment thereto) (the “ Global Offering Documents ”)
was, when it was issued, or has become untrue, incorrect, inaccurate in any material
respect or misleading; or that any estimate, forecast, expression of opinion, intention or
expectation contained in any such documents, was, when it was issued, or has become
unfair or misleading in any respect or based on untrue, dishonest or unreasonable
assumptions or given in bad faith;
(b) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this Prospectus, constitute a material
omission or misstatement in any Global Offering Document;
(c) any breach of, or any event or circumstance rendering untrue or incorrect or misleading
in any respect, any of the representations, undertakings, provisions or warranties given
by our Company or the Single Largest Group of Shareholders in Hong Kong
Underwriting Agreement or the International Underwriting Agreement;
(d) any event, act or omission which gives rise or is likely to give rise to any liability of
any member of the Single Largest Group of Shareholders pursuant to the indemnities in
the Hong Kong Underwriting Agreement;
(e) any breach of any of the obligations or undertakings imposed upon our Company or any
member of the Single Largest Group of Shareholders to the Hong Kong Underwriting
Agreement or the International Underwriting Agreement;
(f) any litigation or dispute or potential litigation or dispute, which would adversely affect
the operation, financial condition, reputation or composition of the board of our Group
in a material respect;
(g) there is any change or development involving a prospective change, having a material
adverse effect;
(h) that the Chairman of the Board, any Director, Supervisor or any member of senior
management of our Company named in this Prospectus seeks to retire, or is removed
from office or vacating his/her office;
UNDERWRITING
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(i) any Director, Supervisor or any member of senior management of our Company named
in this Prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management or taking
directorship of a company;
(j) our Company withdraws this Prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to the
Global Offering) or the Global Offering;
(k) that the approval by the Listing Committee of the listing of, and permission to deal in,
the Shares in issue and to be issued pursuant to the Global Offering is refused or not
granted, other than subject to customary conditions, on or before the Listing Date, or if
granted, the approval is subsequently withdrawn, cancelled, qualified (other than by
customary conditions), revoked or withheld;
(l) any person (other than any of the Joint Sponsors) has withdrawn its consent to the issue
of this Prospectus with the inclusion of its reports, letters and/or legal opinions (as the
case may be) and references to its name included in the form and context in which it
respectively appears;
(m) any prohibition on our Company for whatever reason from offering, allotting, issuing or
selling any of the Offer Shares pursuant to the terms of the Global Offering;
(n) any person (other than the Joint Sponsors and the Overall Coordinators) has withdrawn
or sought to withdraw its consent to being named in any of the Offering Documents or
to the issue of any of the Offering Documents;
(o) an order or petition is presented for the winding-up or liquidation of any member of our
Group, or any member of our Group makes any composition or arrangement with its
creditors or enters into a scheme of arrangement or any resolution is passed for the
winding-up of any member of our Group or a provisional liquidator, receiver or
manager is appointed over all or part of the assets or undertaking of any member of our
Group or anything analogous thereto occurs in respect of any member of our Group;
(p) (A) the notice of acceptance of the CSRC filings issued by the CSRC and/or the results
of the CSRC filings published on the website of the CSRC is rejected, withdrawn,
revoked or invalidated; or (B) other than with the prior written consent of the Overall
Coordinators, the issue or requirement to issue by our Company of a supplement or
amendment to the CSRC filings pursuant to the CSRC Rules or upon any requirement
or request of the CSRC; or (C) any non-compliance of the filing materials with the
CSRC under the CSRC Rules or any other applicable laws;
(q) that a material portion of the orders placed or confirmed in the bookbuilding process, or
investment commitments made by any cornerstone investors under the cornerstone
investment agreements signed with such cornerstone investors, have been withdrawn,
terminated or cancelled; or
UNDERWRITING
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--- page 422 ---
(r) any cornerstone investor is unlikely to fulfil its obligation under the respective
agreement; or
(s) our Company has withdrawn the Offering Documents (and/or any other documents
issued or used in connection with the Global Offering) or the Global Offering;
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by our Company
In accordance with Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that no further Shares or securities convertible into equity securities of our Company (whether or not of
a class already listed) may be allotted or issued by us or form the subject of any agreement to such an
allotment or issue within six months from the Listing Date (whether or not such issue of Shares or
securities of the Company will be completed within six months from the Listing Date), except for the
issuance of Shares or securities pursuant to the Global Offering or for circumstances permitted under
Rule 10.08 of the Listing Rules.
Undertakings by our Single Largest Group of Shareholders
Pursuant to Rule 10.07 of the Listing Rules, our Single Largest Group of Shareholders has
undertaken to us and to the Stock Exchange that, except pursuant to the Global Offering, each of the
members of our Single Largest Group of Shareholders will not, and shall procure that any other
registered holder(s) (if any) will not, without the prior written consent of the Stock Exchange or unless
otherwise in compliance with applicable requirements of the Listing Rules, in the period commencing
on the date by reference to which disclosure of his/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, or enter into any agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of those shares or securities of the Company in respect of which he/it is
shown by this Prospectus to be the beneficial owner (as defined in the Listing Rules).
As at the Latest Practicable Date, Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang
Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and Tibet Y ongyue will hold, directly and indirectly, more
than 30% of the total issued share capital of our Company and therefore are regarded as controlling
shareholders as defined under the Listing Rules. However, immediately after the Global Offering,
Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu
Tashan and Tibet Y ongyue will hold, directly and indirectly, less than 30% of the total issued share
capital of our Company, and each of Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang
Heping, Mr. Zhuang Zhenhai, Mr. Lu Tashan and Tibet Y ongyue will cease to be a controlling
shareholder of our Company. Accordingly, pursuant to the Guide issued by the Stock Exchange, each of
Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai, Mr. Lu
Tashan and Tibet Y ongyue is subject to the lock-up requirements pursuant to Rule 10.07 of the Listing
Rules for the First Six-month Period, but not the period of six months commencing on the date on which
the First Six-month Period expires.
UNDERWRITING
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Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Pursuant to the Hong Kong Underwriting Agreement, our Company hereby undertakes to each of
the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Capital Market Intermediaries, the Joint Bookrunners, the Joint Lead Managers, the
Hong Kong Underwriters that except pursuant to the Global Offering, at any time after the date of this
Agreement up to and including the date falling six months after the Listing Date (the “ First Six-Month
Period ”), we will not, without the prior written consent of the Joint Sponsors and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in compliance
with the requirements of the Listing Rules:
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to allot,
issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or sell any option,
warrant, contract or right to subscribe for or purchase, grant or purchase any option, warrant,
contract or right to allot, issue or sell, or otherwise transfer or dispose of or create an
encumbrance over, or agree to transfer or dispose of or create an encumbrance over, either
directly or indirectly, conditionally or unconditionally, or repurchase, any legal or beneficial
interest in the share capital or any other securities of our Company or any interest in any of
the foregoing (including, without limitation, any securities convertible into or exchangeable
or exercisable for or that represent the right to receive, or any warrants or other rights to
purchase any share capital or other securities of our Company, as applicable), or deposit any
share capital or other securities of our Company, as applicable, with a depositary in
connection with the issue of depositary receipts (an “Encumbrance ”); or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership (legal or beneficial) of the H Shares or any other
securities of our Company, or any interest in any of the foregoing (including, without
limitation, any securities convertible into or exchangeable or exercisable for or that represent
the right to receive, or any warrants or other rights to purchase, any H Shares); or
(iii) enter into any transaction with the same economic effect as any transaction described in
paragraphs (i) or (ii) above; or
(iv) offer to or contract to or agree to do any of the foregoing specified in paragraphs (i), (ii) or
(iii) or announce or publicly disclose any intention to do so,
in each case, whether any of the foregoing transactions is to be settled by delivery of share capital or
such other securities, in cash or otherwise (whether or not the issue of such share capital or other
securities will be completed within the First Six-Month Period). Our Company further agrees that, in
the event our Company is allowed to enter into any of the transactions described in paragraphs (i), (ii) or
(iii) above or offers to or agrees to or announces or publicly discloses any intention to effect any such
transaction during the period of six months commencing on the date on which the First Six-Month
Period expires (the “Second Six-Month Period”), we will take all reasonable steps to ensure that such an
issue or disposal will not, and no other act of our Company will, create a disorderly or false market for
any Shares or other securities of our Company.
UNDERWRITING
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Undertakings by our Single Largest Group of Shareholders
Each of the Single Largest Group of Shareholders has undertaken to each of our Company, the
Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Capital Market Intermediaries, the Joint Bookrunners, the Joint Lead Managers and
the Hong Kong Underwriters that, without the prior written consent of the Joint Sponsors and the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in
compliance with the requirements of the Listing Rules, it/he/she will not, and will procure that the
relevant registered holder(s), any nominee or trustee holding on trust for it/him/her and the companies
controlled by it/him/her will not, at any time during the First Six-Month Period, (i) sell, offer to sell,
accept subscription for, contract or agree to allot, issue or sell, mortgage, charge, pledge, hypothecate,
lend, grant or sell any option, warrant, contract or right to purchase, grant or purchase any option,
warrant, contract or right to sell, or otherwise transfer or dispose of or create an Encumbrance over, or
agree to transfer or dispose of or create an Encumbrance over, either directly or indirectly, conditionally
or unconditionally, any Shares or other securities of our Company or any interest therein (including,
without limitation, any securities convertible into or exchangeable or exercisable for or that represent
the right to receive, or any warrants or other rights to purchase, any Shares or any such other securities,
as applicable or any interest in any of the foregoing), or deposit any Shares or other securities of our
Company with a depositary in connection with the issue of depositary receipts, or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership (legal or beneficial) of any Shares or other securities of our Company or any
interest therein (including, without limitation, any securities convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights to purchase, any
Shares or any such other securities, as applicable or any interest in any of the foregoing), or (iii) enter
into any transaction with the same economic effect as any transaction specified in paragraphs (i) or (ii)
above, or (iv) offer to or agree to or announce or publicly disclose any intention to effect any transaction
specified in paragraphs (i), (ii) or (iii) above, in each case, whether any of the transactions specified in
paragraphs (i), (ii) or (iii) above is to be settled by delivery of Shares or other securities of our Company
or in cash or otherwise, and whether or not the transactions will be completed within the First
Six-Month Period.
THE INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering, it is expected that our Company will enter into the
International Underwriting Agreement with the Joint Sponsors, the Overall Coordinators and the
International Underwriters. Under the International Underwriting Agreement, the International
Underwriters will, subject to certain conditions set out therein, severally and not jointly, agree to
procure subscribers or purchasers for, or to purchase, their respective proportions of the International
Offer Shares being offered under the International Offering (subject to, among other, any reallocation
between the International Offering and the Hong Kong Public Offering).
It is expected that the International Underwriting Agreement may be terminated on similar
grounds as those in the Hong Kong Underwriting Agreement. Potential investors should note that if the
International Underwriting Agreement is not entered into, or is terminated, the Global Offering will not
proceed.
Our Company has agreed to indemnify the International Underwriters against certain liabilities,
including liabilities under the U.S. Securities Act.
UNDERWRITING
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UNDERWRITING COMMISSIONS AND LISTING EXPENSES
The Underwriters and the Capital Market Intermediaries will receive an underwriting commission
equal to 2.8% of the aggregate Offer Price payable for the Offer Shares (the “ Fixed Fees ”). Our
Company may, at our sole and absolute discretion, pay to one or more Underwriters or Capital Market
Intermediaries an additional incentive equal to 2.3% of the Offer Price payable for the Offer Shares (the
“Discretionary Fees ”). The ratio of the Fixed Fees and the Discretionary Fees (if fully paid) payable to
all Underwriters and Capital Market Intermediaries is therefore approximately 55:45. For any
unsubscribed Hong Kong Offer Shares reallocated to the International Offering, the underwriting
commission will not be paid to the Hong Kong Underwriters but will instead be paid, at the rate
applicable to the International Offering, to the relevant International Underwriters. Each of the Joint
Sponsors is entitled to sponsor fee in the amount of US$1,000,000.
Assuming an Offer Price of HK$9.08 per Share (being the mid-point of the indicative Offer Price
range stated in this Prospectus), the underwriting fees, commissions, together with the Stock Exchange
listing fee, SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee, legal and
other professional fees, printing and other expenses relating to the Global Offering, which are payable
by us are estimated to be approximately RMB104.7 million (equivalent to HK$112.8 million).
ACTIVITIES BY SYNDICATE MEMBERS
We describe below a variety of activities that each of the Underwriters and the Capital Market
Intermediaries of the Hong Kong Public Offering and the International Offering (together, the
“Syndicate Members ”) and their affiliates, may individually undertake, and which do not form part of
the underwriting process. When engaging in any of these activities, it should be noted that the Syndicate
Members are subject to restrictions, including the following:
(a) under the agreement among the Syndicate Members, all of them must not make bids or
purchases or effect any other transactions (including but not limited to issuing any option or
derivative or structured product which has, as its underlying asset, any Offer Shares),
whether in the open market or otherwise, for the purpose of or with a view to creating actual,
or apparent, active trading in the Offer Shares or raising, or maintaining the price of the
Offer Shares to or at levels other than those which might otherwise prevail in the open
market; and
(b) all of them must comply with all applicable laws and regulations, including the market
misconduct provisions of the SFO, including the provisions prohibiting insider dealing, false
trading, price rigging and stock market manipulation.
The Syndicate Members and their affiliates are diversified financial institutions with relationships
in countries around the world. These entities engage in a wide range of commercial and investment
banking, brokerage, funds management, trading, hedging, investing and other activities for their own
account and for the accounts of others. In relation to the H Shares, those activities could include acting
as agent for buyers and sellers of the H Shares, entering into over the counter or listed derivative
transactions or listed or unlisted securities transactions (including issuing securities such as derivative
warrants listed on a stock exchange) which have the H Shares as their or part of their underlying assets.
Those activities may require hedging activity by those entities involving, directly or indirectly, buying
and selling the H Shares. All such activity could occur in Hong Kong SAR and elsewhere in the world
and may result in the Syndicate Members and their affiliates holding long and/or short positions in the
H Shares, in baskets of securities or indices including the H Shares, in units of funds that may purchase
the H Shares, or in derivatives related to any of the foregoing.
UNDERWRITING
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In relation to issues by the Syndicate Members or their affiliates of any listed securities having the
H Shares as their underlying securities, whether on the Stock Exchange or on any other stock exchange,
the rules of the exchange may require the issuer of those securities (or one of its affiliates or agents) to
act as a market maker or liquidity provider in the security, and this will also result in hedging activity in
the H Shares in most cases.
These activities may affect the market price or value of the H Shares, the liquidity or trading
volume in the H Shares, and the volatility of the H Shares’ share price, and the extent to which this
occurs from day to day cannot be estimated.
UNDERWRITERS’ AND CAPITAL MARKET INTERMEDIARIES’ INTEREST IN OUR GROUP
Except as disclosed in this Prospectus and the obligations under the Hong Kong Underwriting
Agreement and the International Underwriting Agreement, none of the Underwriters and the Capital
Market Intermediaries has any shareholding interest in any member of our Group or any right (whether
legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any
member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their affiliated
companies may hold a certain portion of the Shares as a result of fulfilling their obligations under the
Hong Kong Underwriting Agreement.
JOINT SPONSOR’S INDEPENDENCE
The Joint Sponsors satisfy the independence criteria applicable to sponsors as set out in Rule
3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. The Global Offering comprises:
(i) the Hong Kong Public Offering of initially 6,791,000 Offer Shares (subject to reallocation as
mentioned below) in Hong Kong SAR as described in “– The Hong Kong Public Offering”
below in this section; and
(ii) the International Offering of initially 61,119,000 Offer Shares (subject to reallocation)
outside the United States in offshore transactions in reliance on Regulation S and the
applicable laws of the jurisdiction where those offers and sales occur, as described in “– The
International Offering” below in this section.
Investors may either apply for the Hong Kong Offer Shares under the Hong Kong Public Offering,
or apply for or indicate an interest for the International Offer Shares under the International Offering,
but may not do both.
The 67,910,000 Offer Shares in the Global Offering will represent approximately 15% of our
enlarged share capital immediately after the completion of the Global Offering. The underwriting
arrangements, and the respective Underwriting Agreements, are summarized in the section headed
“Underwriting” in this Prospectus.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in “– The Hong Kong Public Offering
– Reallocation” below in this section.
References in this Prospectus to applications, application or subscription monies or procedure for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 6,791,000 Offer Shares for subscription by the public in Hong
Kong at the Offer Price, representing approximately 10% of the total number of Offer Shares initially
available under the Global Offering. Subject to the reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering. The Hong Kong Offer Shares will represent
approximately 1.50% of our Company’s enlarged share capital immediately after completion of the
Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to
institutional and professional investors. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and other
securities and corporate entities which regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in “–
Conditions of the Global Offering” below in this section.
STRUCTURE OF THE GLOBAL OFFERING
– 418 –


--- page 428 ---
Allocation
Allocation of the Hong Kong Offer Shares to investors under the Hong Kong Public Offering will
be based on the level of valid applications received under the Hong Kong Public Offering. The basis of
allocation may vary depending on the number of Hong Kong Offer Shares validly applied for by
applicants. We may, if necessary, allocate the Hong Kong Offer Shares on the basis of balloting, which
would mean that some applicants may receive a higher allocation than others who have applied for the
same number of Hong Kong Offer Shares and those applicants who are not successful in the ballot may
not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of the Hong Kong Offer Shares available under the
Hong Kong Public Offering (after taking account of any reallocation referred to below) is to be divided
equally into two pools (subject to reallocation at odd lot size): pool A and pool B, both of which are
available on an equitable basis to successful applicants with any odd board lots being allocated to pool
A:
Pool A: the Offer Shares will be allocated on an equitable basis to applicants who have applied for
the Hong Kong Offer Shares with an aggregate subscription price of HK$5 million (excluding the
brokerage, the SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee
payable) or less; and
Pool B: the Offer Shares will be allocated on an equitable basis to applicants who have applied for
the Hong Kong Offer Shares with an aggregate subscription price of more than HK$5 million
(excluding the brokerage, the SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee payable) and up to the total value of pool B.
Investors should be aware that applications in pool A and applications in pool B may receive
different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the pools are
under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to satisfy
demand in the pool and be allocated accordingly.
For the purpose of this subsection only, the “subscription price” for the Offer Shares means the
price payable on application therefor (without regard to the Offer Price as finally determined).
Applicants can only receive an allocation of Hong Kong Offer Shares from either pool A or pool B but
not from both pools. Multiple or suspected multiple applications under the Hong Kong Public Offering
and any application for more than 50% of the Hong Kong Offer Shares initially comprised in the Hong
Kong Public Offering (being 3,395,500 Hong Kong Offer Shares) will be rejected.
STRUCTURE OF THE GLOBAL OFFERING
– 419 –


--- page 429 ---
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the International
Offering is subject to reallocation under the Listing Rules. In accordance with the clawback
requirements set forth in paragraph 4.2 of Practice Note 18 of the Listing Rules and the Guide issued by
the Stock Exchange, if the Offer Shares under the International Offering are fully subscribed or
over-subscribed and the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents (i) 15 times or more but less than 50 times, (ii) 50 times or more but less than 100
times, and (iii) 100 times or more of the number of Hong Kong Offer Shares initially available under the
Hong Kong Public Offering, the Offer Shares will be reallocated to the Hong Kong Public Offering from
the International Offering. As a result of such reallocation, the total number of Hong Kong Offer Shares
will be increased to 20,373,000 Offer Shares (in the case of (i)), 27,164,000 Offer Shares (in the case of
(ii)) and 33,955,000 Offer Shares (in the case of (iii)), representing 30%, 40% and 50% of the Offer
Shares initially available under the Global Offering, respectively. In each case, the additional Offer
Shares reallocated to the Hong Kong Public Offering will be allocated between pool A and pool B in
equal proportion and the number of Offer Shares allocated to the International Offering will be
correspondingly reduced in such manner as the Overall Coordinators deem appropriate.
If (i) the Offer Shares under the International Offering are fully subscribed or over-subscribed, and
if the number of Offer Shares validly applied for in the Hong Kong Public Offering represents more than
100%, but less than 15 times, of the number of Hong Kong Offer Shares initially available under the
Hong Kong Public Offering; or (ii) the Offer Shares under the International Offering are not fully
subscribed, and if the number of Offer Shares validly applied for in the Hong Kong Public Offering
represents more than 100% of the number of Hong Kong Offer Shares initially available under the Hong
Kong Public Offering, the Overall Coordinators (for themselves and on behalf of the Underwriters) may,
at its discretion, reallocate the Offer Shares initially allocated for the International Offering to the Hong
Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering, provided that
the total number of Hong Kong Offer Shares available under the Hong Kong Public Offering following
such reallocation shall not be more than 13,582,000 Offer Shares, representing two times the number of
Hong Kong Offer Shares initially available under the Hong Kong Public Offering, and the final Offer
Price shall be fixed at the bottom end of the indicative price range (i.e. HK$7.48 per Offer Share), in
accordance with the Guide issued by the Stock Exchange. If both the International Offer Shares and
Hong Kong Offer Shares are under-subscribed, the Global Offering will not proceed unless the shortfall
is taken up by he Underwriters.
Subject to the above, the Overall Coordinators (for themselves and on behalf of the Underwriters)
shall have the discretion to reallocate Offer Shares from the International Offering to the Hong Kong
Public Offering to satisfy valid applications under the Hong Kong Public Offering.
If the Hong Kong Public Offering is not fully subscribed for, the Overall Coordinators have the
authority to reallocate all or any unsubscribed Hong Kong Offer Shares to the International Offering in
such proportions as the Overall Coordinators deem appropriate.
STRUCTURE OF THE GLOBAL OFFERING
– 420 –


--- page 430 ---
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an undertaking
and confirmation in the application submitted by him or her that he or she and any person(s) for whose
benefit he or she is making the application have not applied for or taken up, or indicated an interest for,
and will not apply for or take up, or indicate an interest for, any Offer Shares under the International
Offering, and such applicant’s application is liable to be rejected if the said undertaking and/or
confirmation is breached and/or untrue (as the case may be) or it has been or will be placed or allocated
Offer Shares under the International Offering.
The listing of the Offer Shares on the Stock Exchange is sponsored by the Joint Sponsors.
Applicants under the Hong Kong Public Offering are required to pay, on application, the maximum
Offer Price of HK$10.68 per H Share in addition to any brokerage, SFC transaction levy, AFRC
transaction levy and the Stock Exchange trading fee payable on each Offer Share, amounting to a total
of HK$5,393.85 for one board lot of 500 H Shares. Further details are set out below in the section
headed “How to Apply for the Hong Kong Offer Shares” in this Prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares offered
Subject to the reallocation as described above, our Company will be initially offering for
subscription under the International Offering 61,119,000 Offer Shares, representing approximately 90%
of the Offer Shares under the Global Offering and approximately 13.50% of our enlarged issued share
capital immediately after completion of the Global Offering.
Allocation
The International Offering will include selective marketing of the International Offer Shares to
institutional and professional investors and other investors anticipated to have a sizeable demand for
such International Offer Shares in other jurisdictions outside the United States in reliance on Regulation
S. Professional investors generally include brokers, dealers, companies (including fund managers)
whose ordinary business involves dealing in shares and other securities and corporate entities which
regularly invest in shares and other securities. Prospective professional, institutional and other investors
will be required to specify the number of International Offer Shares under the International Offering
they would be prepared to acquire. This process, known as “book-building”, is expected to continue up
to, and to cease on or around, the last day for lodging applications under the Hong Kong Public
Offering.
Allocation of International Offer Shares pursuant to the International Offering will be determined
by the Overall Coordinators (for themselves and on behalf of the Underwriters) and will be based on a
number of factors, including the level and timing of demand, the total size of the relevant investor’s
invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant
investor is likely to buy further Offer Shares, and/or hold or sell its Offer Shares, after the listing of the
Offer Shares on the Stock Exchange. Such allocation is intended to result in a distribution of the Offer
Shares on a basis which would lead to the establishment of a solid professional and institutional
shareholder base to the benefit of our Company and our Shareholders as a whole.
STRUCTURE OF THE GLOBAL OFFERING
– 421 –


--- page 431 ---
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require any
investor who has been offered the International Offer Shares under the International Offering and who
has made an application under the Hong Kong Public Offering to provide sufficient information to the
Overall Coordinator so as to allow it to identify the relevant application under the Hong Kong Public
Offering and to ensure that they are excluded from any application of the Hong Kong Offer Shares under
the Hong Kong Public Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may change as
a result of the clawback arrangement described in the subsection headed “– The Hong Kong Public
Offering – Reallocation” above, and/or any reallocation of unsubscribed Offer Shares originally
included in the Hong Kong Public Offering.
PRICING AND ALLOCATION
The Offer Price will not be more than HK$10.68 per Offer Share and is expected to be not less
than HK$7.48 per Offer Share, unless otherwise announced as further explained below. If you apply for
the Offer Shares under the Hong Kong Public Offering, you must pay the maximum Offer Price of
HK$10.68 per Offer Share, plus 1.0% brokerage, 0.0027% SFC transaction levy, 0.00015% AFRC
transaction levy and 0.00565% Stock Exchange trading fee, amounting to a total of HK$5,393.85 for
one board lot of 500 H Shares.
The International Underwriters will be soliciting from prospective investors indications of interest
in acquiring Offer Shares in the International Offering. Prospective professional and institutional
investors will be required to specify the number of Offer Shares under the International Offering they
would be prepared to acquire either at different prices or at a particular price. This process, known as
“book-building”, is expected to continue up to, and to cease on or around, the last day for lodging
applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) may,
where considered appropriate, based on the level of interest expressed by prospective investors during
the book-building process, and with the prior consent of our Company, reduce the number of Offer
Shares and/or the Offer Price below that stated in this Prospectus prior to the morning of the last day for
lodging applications under the Hong Kong Public Offering. In such a situation, our Company will, as
soon as practicable following the decision to make such reduction and in any event not later than the
morning of the last day for lodging applications under the Hong Kong Public Offering, post a notice on
the website of the Stock Exchange ( www.hkexnews.hk ) and the website of our Company
(www.jihong.cn ) (the contents of the website do not form a part of this Prospectus). Our Company will
also, as soon as practicable following the decision to make such change, issue a supplemental
Prospectus updating investors of the change in the number of Offer Shares being offered under the
Global Offering and/or the Offer Price together with an update of all financial and other information in
connection with such change, and such number of Offer Shares and/or the Offer Price will be final and
conclusive. The Global Offering must first be cancelled and subsequently relaunched on FINI pursuant
to a supplemental prospectus or a new prospectus.
STRUCTURE OF THE GLOBAL OFFERING
– 422 –


--- page 432 ---
Before submitting applications for the Hong Kong Offer Shares, applicants should have regard to
the possibility that any notice of a reduction in the number of Offer Shares and/or the Offer Price may
not be made until the last day for lodging applications under the Hong Kong Public Offering, which is
Thursday, May 22, 2025. In the absence of any such supplemental or new Prospectus so published, the
number of Offer Shares will not be reduced and/or the Offer Price, if agreed upon with our Company
and the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) will under
no circumstances be set outside the Offer Price stated in this Prospectus.
If there is any change to the offer size due to change in the number of Offer Shares offered in the
Global Offering (other than pursuant to the reallocation mechanism as disclosed in this Prospectus), or
change to the Offer Price which leads to the resulting price falling outside the indicative Offer Price
range as stated in this Prospectus, or if the Company becomes aware that there has been a significant
change affecting any matter contained in this Prospectus or a significant new matter has arisen, the
inclusion of information in respect of which would have been required to be in this Prospectus if it had
arisen before this Prospectus was issued, after the issue of this Prospectus and before the
commencement of dealings in our Offer Shares as prescribed under Rule 11.13 of the Listing Rules, our
Company is required to cancel the Global Offering and issue a supplemental or new Prospectus and
subsequently relaunched on FINI pursuant to the supplemental or new Prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators (for themselves
and on behalf of the Underwriters) may, at its discretion, reallocate the number of Offer Shares to be
offered in the Hong Kong Public Offering and the International Offering, provided that the number of
Offer Shares comprised in the Hong Kong Public Offering shall not be less than 10% of the total number
of Offer Shares available under the Global Offering. The Offer Shares to be offered in the Hong Kong
Public Offering and the Offer Shares to be offered in the International Offering may, in certain
circumstances, be reallocated between these offerings at the discretion of the Overall Coordinators (for
themselves and on behalf of the Underwriters).
The level of indications of interest in the International Offering, the basis of allotment of the Offer
Shares available under the Hong Kong Public Offering and the results of allocations in the Hong Kong
Public Offering are expected to be made available in a variety of channels in the manner described in
the section headed “How to Apply for the Hong Kong Offer Shares – D. Despatch/Collection of Share
Certificates and Refund of Application Monies” in this Prospectus.
UNDERWRITING AGREEMENT
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the
terms of the Hong Kong Underwriting Agreement and is conditional upon the International
Underwriting Agreement being signed and becoming unconditional.
We expect to enter into the International Underwriting Agreement relating to the International
Offering on the Price Determination Date. The underwriting arrangements under the Hong Kong
Underwriting Agreement and the International Underwriting Agreement are summarized in the section
headed “Underwriting” in this Prospectus.
STRUCTURE OF THE GLOBAL OFFERING
– 423 –


--- page 433 ---
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Hong Kong Offer Shares is conditional on, among others:
(i) the Stock Exchange granting approval for the listing of, and permission to deal in, the H
Shares in issue and to be issued pursuant to the Global Offering on the Main Board of the
Stock Exchange and such approval not subsequently having been withdrawn or revoked prior
to the Listing Date;
(ii) the execution and delivery of the International Underwriting Agreement on or around the
Price Determination Date; and
(iii) the obligations of the Hong Kong Underwriters and the Capital Market Intermediaries under
the Hong Kong Underwriting Agreement and the obligations of the International
Underwriters and the Capital Market Intermediaries under the International Underwriting
Agreement becoming unconditional and not having been terminated in accordance with the
terms of the respective agreements,
in each case on or before the dates and times specified in the Hong Kong Underwriting Agreement
and/or the International Underwriting Agreement, as the case may be (unless and to the extent such
conditions are validly waived on or before such dates and times) and in any event not later than 30 days
after the date of this Prospectus.
The consummation of each of the Hong Kong Public Offering and the International Offering is
conditional upon, among other things, the other offering becoming unconditional and not having been
terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified, the Global
Offering will lapse, and the Stock Exchange will be notified immediately. Notice of the lapse of the
Hong Kong Public Offering will be published by our Company on the website of the Stock Exchange
(www.hkexnews.hk ) and on the website of our Company ( www.jihong.cn ) on the next day following
such lapse. In such a situation, all application monies will be returned, without interest, on the terms set
forth in the section headed “How to Apply for the Hong Kong Offer Shares – D. Despatch/Collection of
Share Certificates and Refund of Application Monies” in this Prospectus. In the meantime, all
application monies will be held in separate bank account(s) with the receiving banks or other bank(s) in
Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made to enable the H Shares to be admitted into CCASS. If
the Stock Exchange grants the listing of, and permission to deal in, the H Shares and our Company
complies with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible
securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of
commencement of dealings in the H Shares on the Stock Exchange or any other date HKSCC chooses.
Settlement of transactions between participants of the Stock Exchange is required to take place in
CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
STRUCTURE OF THE GLOBAL OFFERING
– 424 –


--- page 434 ---
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in
Hong Kong SAR on Tuesday, May 27, 2025, it is expected that dealings in our H Shares on the Stock
Exchange will commence at 9:00 a.m. on Tuesday, May 27, 2025.
Our H Shares will be traded in board lots of 500 H Shares each and the stock code of the H Shares
is 2603.
STRUCTURE OF THE GLOBAL OFFERING
– 425 –


--- page 435 ---
IMPORTANT NOTICE TO INVESTORS OF
HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offer
and below are the procedures for application.
This Prospectus is available at the website of the Stock Exchange at
“http://www.hkexnews.hk/” under the “HKEXnews > New Listings > New Listing Information”
section, and our website at www.jihong.cn.
The contents of this Prospectus are identical to the prospectus as registered with the Registrar
of Companies in Hong Kong SAR pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
• are 18 years of age or older; and
• have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the Stock
Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the person(s) for whose
benefit you are applying for:
• are an existing Shareholder or close associates; or
• are a Director, a Supervisor or any of his/her close associates.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 426 –


--- page 436 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, May 19, 2025 and
end at 12:00 noon on Thursday, May 22, 2025 (Hong Kong SAR time).
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service
www.eipo.com.hk Investors who would like
to receive a physical
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and
issued in your own
name.
From 9:00 a.m. on
Monday, May 19, 2025
to 11:30 a.m.
on Thursday, May 22,
2025, Hong Kong SAR
time.
The latest time for
completing full
payment of application
monies will be 12:00
noon on Thursday, May
22, 2025, Hong Kong
SAR time.
HKSCC EIPO channel Y our broker or custodian
who is a HKSCC
Participant will submit
an EIPO application on
your behalf through
HKSCC’s FINI
system in accordance
with your instruction.
Investors who would not
like to receive a
physical Share
certificate. Hong Kong
Offer Shares
successfully applied for
will be allotted and
issued in the
name of HKSCC
Nominees, deposited
directly into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this
may vary by broker or
custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to capacity
limitations and potential service interruptions and you are advised not to wait until the last day of the
application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment in respect
of any application instructions given by you or for your benefit through the White Form eIPO service
to make an application for Hong Kong Offer Shares, an actual application shall be deemed to have been
made. If you are a person for whose benefit the electronic application instructions are given, you shall
be deemed to have declared that only one set of electronic application instructions has been given for
your benefit. If you are an agent for another person, you shall be deemed to have declared that you have
only given one set of electronic application instructions for the benefit of the person for whom you are
an agent and that you are duly authorized to give those instructions as an agent.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 427 –


--- page 437 ---
For the avoidance of doubt, giving an application instruction under the White Form eIPO service
more than once and obtaining different payment reference numbers without effecting full payment in
respect of a particular reference number will not constitute an actual application.
If you apply through the White Form eIPO service, you are deemed to have authorized the White
Form eIPO service provider to apply on the terms and conditions in this Prospectus, as supplemented
and amended by the terms and conditions of the White Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you jointly and
severally) are deemed to have instructed and authorized HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to apply for Hong Kong Offer Shares on your behalf and
to do on your behalf all the things stated in this Prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed to have
been made for any application instructions given by you or for your benefit to HKSCC (in which case an
application will be made by HKSCC Nominees on your behalf) provided such application instruction
has not been withdrawn or otherwise invalidated before the closing time of the Hong Kong Public Offer.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor HKSCC
Nominees shall be liable to you or any other person in respect of any actions taken by HKSCC or
HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any breach of the terms
and conditions of this Prospectus.
3. Information Required to Apply
Y ou 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
• Identity document’s issuing country or
jurisdiction
• Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
• Identity document number
• Full name(s)
2 as shown on your identity
document
• Identity document’s issuing country or
jurisdiction
• Identity document type, with order of
priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
• Identity document number
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 428 –


--- page 438 ---
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail address, a
contact telephone number and a Hong Kong Address. Y ou are also required to declare that the identity information
provided by you follows the requirements as described in Note 2 below. In particular, where you cannot provide a
HKID number, you must confirm that you do not hold a HKID card.
2. The applicant’s full name as shown on their identity document must be used and the surname, given name, middle
and other names (if any) must be input in the same order as shown on the identity document. If an applicant’s
identity document contains both an English and Chinese name, both English and Chinese names must be used.
Otherwise, either English or Chinese names will be accepted. The order of priority of the applicant’s identity
document type must be strictly followed and where an individual applicant has a valid HKID card (including both
Hong Kong Residents and Hong Kong Permanent Residents), the HKID number must be used when making an
application to subscribe for shares in a public offer. Similarly for corporate applicants, a LEI number must be used if
an entity has a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID ”) of the trustee, as set out above, will be required. If
the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID of the asset management
company or the individual fund, as appropriate, which has opened a trading account with the broker will be required,
as above.
4. The maximum number of joint applicants on FINI is capped at 4
1 in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document), the
identity document’s issuing country or jurisdiction, the identity document type; and (ii), the identity document
number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each joint beneficial
owner. If you do not include this information, the application will be treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in securities;
and (ii) you exercise statutory control over that company, then the application will be treated as being for your
benefit and you should provide the required information in your application as stated above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other stock
exchange.
“Statutory control” means you:
• control the composition of the board of directors of the company;
• control more than half of the voting power of the company; or
• hold more than half of the issued share capital of the company (not counting any part of it which carries no
right to participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a power of
attorney, we and the Overall Coordinators, as our agent, have discretion to consider whether to accept it
on any conditions we think fit, including evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower cap.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 439 ---
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 500 H Shares
Permitted number of Hong Kong
Offer Shares for application and
amount payable on application/
successful allotment
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The maximum Offer Price is HK$10.68 per Share.
If you are applying through the HKSCC EIPO
channel, you are required to pre-fund your
application based on the amount specified by your
broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong SAR.
By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through
the HKSCC EIPO channel, you (and, if you are
joint applicants, each of you jointly and severally)
are deemed to have instructed and authorized
HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to
arrange payment of the final Offer Price, brokerage,
SFC transaction levy, the AFRC transaction levy
and the Stock 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 White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you have
selected. Y ou must pay the respective maximum
amount payable on application in full upon
application for Hong Kong Offer Shares.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 430 –


--- page 440 ---
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,393.85 7,000 75,513.95 50,000 539,385.39 700,000 7,551,395.45
1,000 10,787.71 8,000 86,301.67 60,000 647,262.47 800,000 8,630,166.25
1,500 16,181.56 9,000 97,089.37 70,000 755,139.55 900,000 9,708,937.02
2,000 21,575.42 10,000 107,877.07 80,000 863,016.62 1,000,000 10,787,707.80
2,500 26,969.27 15,000 161,815.62 90,000 970,893.70 1,500,000 16,181,561.70
3,000 32,363.13 20,000 215,754.16 100,000 1,078,770.78 2,000,000 21,575,415.60
3,500 37,756.98 25,000 269,692.70 200,000 2,157,541.55 2,500,000 26,969,269.50
4,000 43,150.82 30,000 323,631.23 300,000 3,236,312.35 3,000,000 32,363,123.40
4,500 48,544.69 35,000 377,569.77 400,000 4,315,083.12 3,395,500
(1) 36,629,661.84
5,000 53,938.54 40,000 431,508.31 500,000 5,393,853.90
6,000 64,726.25 45,000 485,446.85 600,000 6,472,624.68
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in
the Listing Rules) and 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, collected by the Stock Exchange on behalf of the
SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own benefit,
except where you are a nominee and provide the information of the underlying investor in your
application as required under the paragraph headed “– A. Application for Hong Kong Offer Shares – 3.
Information Required to Apply” in this section. If you are suspected of submitting or cause to submit
more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC EIPO
channel, or (iii) both channels concurrently are prohibited and will be rejected. If you have made an
application through the White Form eIPO service or HKSCC EIPO channel, you or the person(s) for
whose benefit you have made the application shall not apply for any International Offer Shares.
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6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or HKSCC EIPO
channel, you (or as the case may be, HKSCC Nominees will do the following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the Overall
Coordinators, as our agents, to execute any documents for you and to do on your behalf all
things necessary to register any Hong Kong Offer Shares allocated to you in your name or in
the name of HKSCC Nominees as required by the Articles of Association, and (if you are
applying through the HKSCC EIPO channel) to deposit the allotted Hong Kong Offer Shares
directly into CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this Prospectus and the designated website of the White Form eIPO
service (or as the case may be, the agreement you entered into with your broker or
custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong Offer
Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out in this
Prospectus and they do not apply to you, or the person(s) for whose benefit you have made
the application;
(v) confirm that you have read this Prospectus and any supplement to it and have relied only on
the information and representations contained therein in making your application (or as the
case may be, causing your application to be made) and will not rely on any other information
or representations;
(vi) agree that the Relevant Persons
2, the H Share Registrar and HKSCC will not be liable for any
information and representations not in this Prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit you have
made the application to us, the Relevant Persons, the H Share Registrar, HKSCC, HKSCC
Nominees, the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, for the purposes under the
paragraph headed “– G. Personal Data – 3. Purposes and 4. Transfer of Personal Data” in this
section;
2 Relevant Persons would include the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market Intermediates and any of their or the
Company’s respective directors, supervisors, officers, employees, partners, agents or representatives and any other parties
involved in the Global Offering.
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(viii) agree (without prejudice to any other rights which you may have once your application (or as
the case may be, HKSCC Nominees’ application) has been accepted) that you will not
rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your behalf
cannot be revoked once it is accepted, which will be evidenced by the notification of the
result of the ballot by the H Share Registrar by way of publication of the results at the time
and in the manner as specified in the paragraph headed “– B. Publication of Results” in this
section;
(x) confirm that you are aware of the situations specified in the paragraph headed “– C.
Circumstances in Which Y ou Will Not Be Allocated Hong Kong Offer Shares” in this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it and the
resulting contract will be governed by and construed in accordance with the laws of Hong
Kong SAR;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong SAR that apply to your application and that neither we nor the Relevant
Persons will breach any law inside and/or outside Hong Kong SAR as a result of the
acceptance of your offer to purchase, or any action arising from your rights and obligations
under the terms and conditions contained in this Prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by the Company, any of the directors, chief executives,
substantial Shareholder(s) or existing shareholder(s) of the Company or any of its
subsidiaries or any of their respective close associates; and (b) you are not accustomed or
will not be accustomed to taking instructions from the Company, any of the directors, chief
executives, substantial shareholder(s) or existing shareholder(s) of the Company or any of its
subsidiaries or any of their respective close associates in relation to the acquisition, disposal,
voting or other disposition of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong Kong Offer
Shares to you and that you may be prosecuted for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated to you
under the application;
(xvii) declare and represent that this is the only application made and the only application intended
by you to be made to benefit you or the person for whose benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other application has been or
will be made for your benefit by giving electronic application instructions to HKSCC
directly or indirectly or through the application channel of the H Share Registrar or by any
one as your agent or by any other person; and
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(xix) (if you are making the application as an agent for the benefit of another person) warrant that
(1) no other application has been or will be made by you as agent for or for the benefit of that
person or by that person or by any other person as agent for that person by giving electronic
application instructions to HKSCC and (2) you have due authority to give electronic
application instructions on behalf of that other person as its agent.
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website The designated results of allocation
at www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
24 hours, from 11:00 p.m. and
Monday, May 26, 2025 to
12:00 midnight and
Sunday, June 1, 2025
(Hong Kong SAR time)
The full list of (i) wholly or
partially successful applicants using
the White Form eIPO service and
HKSCC EIPO channel, and (ii) the
number of Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed on the “Allotment
Results” page of the White Form
eIPO service at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website
at www.jihong.cn which will
provide links to the above
mentioned websites of the H Share
Registrar.
No later than 11:00 p.m. on
Monday, May 26, 2025
(Hong Kong SAR time)
Telephone +852 2862 8555 – the allocation
results telephone enquiry line
provided by the H Share Registrar
Between 9:00 a.m. and 6:00 p.m.,
from Tuesday, May 27, 2025 to
Friday, May 30, 2025
(Hong Kong SAR time)
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For those applying through HKSCC EIPO channel, you may also check with your broker or
custodian from 6:00 p.m. on Friday, May 23, 2025 (Hong Kong SAR time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on Friday,
May 23, 2025 (Hong Kong SAR time) on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of interest in the
Global Offering, the level of applications in the Hong Kong Public Offering and the basis of allocations
of Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk and our website at
www.jihong.cn by no later than 11:00 p.m. on May 26, 2025 (Hong Kong SAR time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG OFFER
SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be allocated to
you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be revoked
pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees have
full discretion to reject or accept any application, or to accept only part of any application, without
giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the Shares either:
• within three weeks from the closing date of the application lists; or
• within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
• you make multiple applications or suspected multiple applications. Y ou may refer to the
paragraph headed “– A. Applications for Hong Kong Offer Shares – 5. Multiple Applications
Prohibited” in this section on what constitutes multiple applications;
• your application instruction is incomplete;
• your payment (or confirmation of funds, as the case may be) is not made correctly;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 445 ---
• the Underwriting Agreements do not become unconditional or are terminated;
• we or the Overall Coordinators believes that by accepting your application, it or we would
violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants will
be required to hold sufficient application funds on deposit with their Designated Bank before balloting.
After balloting of Hong Kong Offer Shares, the Receiving Bank will collect the portion of these funds
required to settle each HKSCC Participant’s actual Hong Kong Public Offer Share allotment from their
Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement failure by
a HKSCC Participant (or its Designated Bank), who is acting on your behalf in settling payment for
your allotted shares, HKSCC will contact the defaulting HKSCC Participant and its Designated Bank to
determine the cause of failure and request such defaulting HKSCC Participant to rectify or procure to
rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected Hong Kong
Offer Shares will be reallocated to the International Offering. Hong Kong Offer Shares applied for by
you through the broker or custodian may be affected to the extent of the settlement failure. In the
extreme case, you will not be allocated any Hong Kong Offer Shares due to the money settlement failure
by such HKSCC Participant. None of us, the Relevant Persons, the H Share Registrar and HKSCC is or
will be liable if Hong Kong Offer Shares are not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one Share certificate for all Hong Kong Offer Shares allotted to you under the
Hong Kong Public Offering (except pursuant to applications made through the HKSCC EIPO channel
where the 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 evidence of title at 8:00 a.m. on Tuesday, May 27, 2025
(Hong Kong time), provided that the Global Offering has become unconditional and the right of
termination described in the section headed “Underwriting” has not been exercised. Investors who trade
Shares prior to the receipt of Share certificates or the Share certificates becoming valid do so entirely at
their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus application
monies pending clearance of application monies.
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The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 3
For physical share
certificates of 1,000,000 or
more Offer Shares issued
under your own name
Collection in person at
Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong
Kong SAR
Time: from 9:00 a.m. to 1:00
p.m. on Tuesday, May 27,
2025 (Hong Kong SAR time)
If you are an individual, you
must not authorize any other
person to collect for you. If
you are a corporate applicant,
your authorized representative
must bear a letter of
authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and
authorized representatives
must produce, at the time of
collection, evidence of
identity acceptable to the H
Share Registrar.
Note: If you do not collect
your Share certificate(s)
personally within the time
above, it/they will be sent to
the address specified in your
application instructions by
ordinary post at your own risk
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
3 Except in the event of any Severe Weather Signals (as defined below) in force in Hong Kong SAR on the business day
before the Listing Date rendering it impossible for the relevant share certificates to be dispatched to HKSCC in a timely
manner, the Company shall procure the H Share Registrar to arrange for delivery of the supporting documents and share
certificates in accordance with the contingency arrangements as agreed between them. Y ou may refer to “– E. Severe
Weather Arrangements” in this section.
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--- page 447 ---
White Form eIPO service HKSCC EIPO channel
For physical share
certificates of less
than 1,000,000 Offer
Shares issued under
your own name
Y our Share certificate(s) will
be sent to the address
specified in your application
instructions by ordinary post
at your own risk
Time: Monday, May 26, 2025
Refund mechanism for surplus application monies paid by you
Date Tuesday, May 27, 2025 Subject to the arrangement
between you and your broker
or custodian
Responsible party H Share Registrar Y our broker or custodian
Application monies paid
through single bank
account
White Form e-Refund
payment instructions to your
designated bank account
Y our broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it
Application monies paid
through multiple bank
accounts
Refund check(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Thursday, May 22, 2025 if, there is/are:
• a tropical cyclone warning signal number 8 or above;
• a black rainstorm warning; and/or
• an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”),
• (collectively, “ Severe Weather Signals ”),
in force in Hong Kong SAR at any time between 9:00 a.m. and 12:00 noon on Thursday, May 22, 2025.
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.
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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.jihong.cn of the revised timetable.
If a Severe Weather Signal is hoisted on Monday, May 26, 2025, the H 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 Tuesday, May 27, 2025.
•I f a Severe Weather Signal is hoisted on Tuesday, May 27, 2025: for physical share
certificates of 1,000,000 or more offer shares issued under your own name, you may pick
them up from the H Share Registrar’s office after the Severe Weather Signal is lowered or
canceled (e.g. in the afternoon of Tuesday, May 27, 2025 or on Wednesday, May 28, 2025).
• If a Severe Weather Signal is hoisted on Monday, May 26, 2025: for physical share
certificates of less than 1,000,000 offer shares issued under your own name, despatch will be
made by ordinary post when the post office re-opens after the Severe Weather Signal is
lowered or canceled (e.g. in the afternoon of Monday, May 26, 2025 or on Tuesday, May 27,
2025).
Prospective investors should be aware that if they choose to receive physical share certificates
issued in their own name, there may be a delay in receiving the share certificates.
F . ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the Shares will be accepted
as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the
date of commencement of dealings in the Shares or any other date HKSCC chooses. Settlement of
transactions between Exchange Participants is required to take place in CCASS on the second
settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC Operational
Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 449 ---
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data collected
and held by the Company, the H Share Registrar, the receiving bank and the Relevant Persons about you
in the same way as it applies to personal data about applicants other than HKSCC Nominees. This
personal data may include client identifier(s) and your identification information. By giving application
instructions to HKSCC, you acknowledge that you have read, understood and agree to all of the terms of
the Personal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of, Hong
Kong Offer Shares, of the policies and practices of the Company and the H Share Registrar in relation to
personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure that
personal data supplied to the Company or its agents and the H Share Registrar is accurate and up-to-date
when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares into or out of their
names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your application for
Hong Kong Offer Shares being rejected, or in the delay or the inability of the Company or the H Share
Registrar to effect transfers or otherwise render their services. It may also prevent or delay registration
or transfers of Hong Kong Offer Shares which you have successfully applied for and/or the despatch of
Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the Company and
the H Share Registrar immediately of any inaccuracies in the personal data supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
• processing your application and refund check and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and application
procedures set out in this Prospectus and announcing results of allocation of Hong Kong
Offer Shares;
• compliance with applicable laws and regulations in Hong Kong SAR 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;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 450 ---
• facilitating Hong Kong Offer Shares balloting;
• establishing benefit entitlements of holders of the Shares, such as dividends, rights issues,
bonus issues, etc.;
• distributing communications from the Company and its subsidiaries;
• compiling statistical information and profiles of the holder of the Shares;
• disclosing relevant information to facilitate claims on entitlements; and
• any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and holders
of the Shares and/or regulators and/or any other purposes to which applicants and holders of
the Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants for and
holders of Hong Kong Offer Shares will be kept confidential but the Company and the H Share Registrar
may, to the extent necessary for achieving any of the above purposes, disclose, obtain or transfer
(whether within or outside Hong Kong SAR) the personal data to, from or with any of the following:
• the Company’s appointed agents such as financial advisers, receiving bank and overseas
principal share registrar;
• HKSCC or HKSCC Nominees, who will use the personal data and may transfer the personal
data to the H Share Registrar for the purposes of providing its services or facilities or
performing its functions in accordance with its rules or procedures and operating FINI and
CCASS (including where applicants for the Hong Kong Offer Shares request a deposit into
CCASS);
• any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H Share
Registrar in connection with their respective business operation;
• the Stock Exchange, the SFC and any other statutory regulatory or governmental bodies or
otherwise as required by laws, rules or regulations, including for the purpose of the Stock
Exchange’s administration of the Listing Rules and the SFC’s performance of its statutory
functions; and
• any persons or institutions with which the holders of Hong Kong Offer Shares have or
propose to have dealings, such as their bankers, solicitors, accountants or brokers etc.
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5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and holders
of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which the personal data
were collected. Personal data which is no longer required will be destroyed or dealt with in accordance
with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether the
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to correct
any data that is inaccurate. The Company and the H Share Registrar have the right to charge a
reasonable fee for the processing of such requests. All requests for access to data or correction of data
should be addressed to the Company and the H Share Registrar, at their registered address disclosed in
the section headed “Corporate Information” in this Prospectus or as notified from time to time, for the
attention of the company secretary, or the H Share Registrar for the attention of the privacy compliance
officer.
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--- page 452 ---
The following is the text of a report, prepared for inclusion in this document, received from the
independent reporting accountants of the Company, Ernst & Young, Certified Public Accountants, Hong
Kong, for the purpose of incorporation in this document.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
ה
༸979໮
ࢭ27ᅽ
Tel ཥ༑: +852 2846 9888
Fax ෂॆ: +852 2868 4432
ey.com
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF XIAMEN JIHONG CO., LTD, CHINA INTERNATIONAL CAPITAL
CORPORATION HONG KONG SECURITIES LIMITED AND CMB INTERNATIONAL
CAPITAL LIMITED
Introduction
We report on the historical financial information of Xiamen Jihong Co., Ltd (΅Ϟ
ʮ̡ , the “ Company ”) and its subsidiaries (together, the “ Group ”) set out on pages IA-4 to IA-116,
which comprises the consolidated statements of profit or loss, statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years ended
31 December 2022, 2023 and 2024 (the “ Relevant Periods ”), and the consolidated statements of
financial position of the Group and the statements of financial position of the Company as at 31
December 2022, 2023 and 2024 and material accounting policy information and other explanatory
information (together, the “ Historical Financial Information ”). The Historical Financial Information
set out on pages IA-4 to IA-116 forms an integral part of this report, which has been prepared for
inclusion in the document of the Company dated 19 May 2025 (the “ Document ”) in connection with the
initial listing of the shares of the Company on the Main Board of The Stock Exchange of Hong Kong
Limited (the “ Stock Exchange ”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in note 2.1
to the Historical Financial Information and for such internal control as the directors determine is
necessary to enable the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to report
our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial Information in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).
This standard requires that we comply with ethical standards and plan and perform our work to obtain
reasonable assurance about whether the Historical Financial Information is free from material
misstatement.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-1 –


--- page 453 ---
Our work involved performing procedures to obtain evidence about the amounts and disclosures in
the Historical Financial Information. The procedures selected depend on the reporting accountants’
judgement, including the assessment of risks of material misstatement of the Historical Financial
Information, whether due to fraud or error. In making those risk assessments, the reporting accountants
consider internal control relevant to the entity’s preparation of the Historical Financial Information that
gives a true and fair view in accordance with the basis of preparation set out in note 2.1 to the Historical
Financial Information, in order to design procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work
also included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the
Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the accountants’
report, a true and fair view of the financial position of the Group and the Company as at 31 December
2022, 2023 and 2024 and of the financial performance and cash flows of the Group for each of the
Relevant Periods in accordance with the basis of preparation set out in note 2.1 to the Historical
Financial Information.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-2 –


--- page 454 ---
REPORT ON MATTERS UNDER THE RULES GOVERNING THE LISTING OF SECURITIES
ON THE STOCK EXCHANGE AND THE COMPANIES (WINDING UP AND MISCELLANEOUS
PROVISIONS) ORDINANCE
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying Financial
Statements as defined on page IA-4 have been made.
Dividends
We refer to note 12 to the Historical Financial Information which contains information about
dividends declared or paid by the Company in respect of the Relevant Periods.
Ernst & Y oung
Certified Public Accountants
Hong Kong
19 May 2025
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-3 –


--- page 455 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical Financial
Information is based, were audited by Ernst & Y oung in accordance with Hong Kong Standards on
Auditing issued by the HKICPA (the “ Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB ”) and all values are
rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-4 –


--- page 456 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
REVENUE 5 5,375,884 6,694,681 5,529,259
Cost of sales (3,197,031) (3,590,378) (3,109,944)
GROSS PROFIT 2,178,853 3,104,303 2,419,315
Other income and gains 6 36,214 53,381 61,114
Selling and marketing expenses (1,575,180) (2,342,146) (1,849,611)
Administrative expenses (170,652) (240,642) (264,591)
Research and development expenses (148,512) (141,980) (124,429)
Impairment losses on financial assets (76,680) (25,367) (9,037)
Share of (losses)/profits of associates (4,865) 1,854 3,584
Foreign exchange gains/(losses), net 10,736 975 (3,512)
Finance costs 8 (21,627) (13,412) (12,250)
Other expenses and losses 6 (14,397) (10,500) (2,443)
PROFIT BEFORE TAX 7 213,890 386,466 218,140
Income tax expense 11 (42,311) (54,344) (33,690)
PROFIT FOR THE YEAR 171,579 332,122 184,450
Attributable to:
Owners of the parent 183,980 345,099 181,931
Non-controlling interests (12,401) (12,977) 2,519
171,579 332,122 184,450
EARNINGS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT 13
Basic (RMB) 0.48 0.92 0.49
Diluted (RMB) 0.48 0.92 0.49
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-5 –


--- page 457 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
PROFIT FOR THE YEAR 171,579 332,122 184,450
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of
foreign operations 2,515 670 510
Share of other comprehensive income of
associates − − 69
Net other comprehensive income that may be
reclassified to profit or loss in subsequent
periods 2,515 670 579
Other comprehensive income that will not be
reclassified to profit or loss in subsequent
periods:
Change in fair value of equity investments
designated at fair value through other
comprehensive income, net of tax − − (10,520)
Net other comprehensive income that will not
be reclassified to profit or loss in
subsequent periods − − (10,520)
OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF TAX 2,515 670 (9,941)
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR 174,094 332,792 174,509
Attributable to:
Owners of the parent 186,469 345,772 171,928
Non-controlling interests (12,375) (12,980) 2,581
174,094 332,792 174,509
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-6 –


--- page 458 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 14 803,669 916,633 930,436
Right-of-use assets 15 172,457 187,461 176,350
Goodwill 16 9,585 9,585 9,585
Other intangible assets 17 14,451 23,377 19,910
Investments in associates 18 67,815 82,439 107,477
Equity investments designated at fair value
through other comprehensive income 20 18,500 19,500 8,254
Financial assets at fair value through profit
or loss 21 – – 130,863
Deferred tax assets 32 13,526 12,231 11,147
Pledged deposits 26 35,000 15,000 –
Time deposits 26 – 52,055 133,791
Other non-current assets 22 994 12,593 1,188
Total non-current assets 1,135,997 1,330,874 1,529,001
CURRENT ASSETS
Inventories 23 483,669 456,076 447,889
Trade and bills receivables 24 474,731 488,624 553,885
Prepayments, other receivables and other
assets 25 199,929 162,818 141,874
Amounts due from related parties 43 – 1,453 1,243
Pledged deposits 26 94,971 41,390 67,971
Time deposits 26 1,018 43,231 50,169
Cash and cash equivalents 26 852,071 1,062,110 711,062
Total current assets 2,106,389 2,255,702 1,974,093
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-7 –


--- page 459 ---
As at 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
CURRENT LIABILITIES
Trade and bills payables 27 512,500 640,520 716,560
Other payables and accruals 28 115,442 188,349 181,321
Contract liabilities 29 12,949 14,829 17,858
Interest-bearing bank borrowings 30 295,644 103,042 121,126
Lease liabilities 15 23,948 25,012 34,678
Tax payables 30,817 40,225 8,645
Amounts due to related parties 43 3,117 1,364 972
Other current liabilities 944 3,663 3,227
Total current liabilities 995,361 1,017,004 1,084,387
NET CURRENT ASSETS 1,111,028 1,238,698 889,706
TOTAL ASSETS LESS CURRENT
LIABILITIES 2,247,025 2,569,572 2,418,707
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings 30 16,549 155,575 127,067
Lease liabilities 15 53,490 63,373 49,465
Deferred income 31 32,387 34,023 30,945
Deferred tax liabilities 32 7,434 3,747 2,715
Total non-current liabilities 109,860 256,718 210,192
NET ASSETS 2,137,165 2,312,854 2,208,515
EQUITY
Equity attributable to owners of the
parent
Share capital 33 378,409 385,009 384,769
Reserves 34 1,716,807 1,895,389 1,817,255
2,095,216 2,280,398 2,202,024
Non-controlling interests 41,949 32,456 6,491
Total equity 2,137,165 2,312,854 2,208,515
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-8 –


--- page 460 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Share capital
Treasury
shares *
Share
premium *
Share award
reserve *
Statutory
reserve *
Other
comprehensive
income *
Retained
profits * Total
Non-controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 34) (note 34) (note 34) (note 34) (note 34) (note 34)
As at 1 January 2022 387,480 (279,076) 384,673 – 69,895 (17,282) 1,321,110 1,866,800 47,814 1,914,614
Profit for the year –––––– 183,980 183,980 (12,401) 171,579
Exchange differences on translation of
foreign operations ––––– 2,489 – 2,489 26 2,515
Total comprehensive income for the year ––––– 2,489 183,980 186,469 (12,375) 174,094
Settlement of repurchase obligation for
restricted shares – 117,55 8––––– 117,558 – 117,558
Cancellation of shares repurchased (9,071) – (108,487) –––– (117,558) – (117,558)
Equity-settled share-based payment
expenses – – – 3,12 6––– 3,126 – 3,126
Restricted shares granted under Share
Incentive Plans – 161,518 (122,029) –––– 39,489 – 39,489
Contribution from non-controlling interests –––––––– 3,300 3,300
Others – – (593) – – – (75) (668) 3,210 2,542
As at 31 December 2022 378,409 – 153,564 3,126 69,895 (14,793) 1,505,015 2,095,216 41,949 2,137,165
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-9 –


--- page 461 ---
Attributable to owners of the parent
Share capital
Treasury
shares *
Share
premium *
Share award
reserve *
Statutory
reserve *
Other
comprehensive
income *
Retained
profits * Total
Non-controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 34) (note 34) (note 34) (note 34) (note 34) (note 34)
As at 1 January 2023 378,409 – 153,564 3,126 69,895 (14,793) 1,505,015 2,095,216 41,949 2,137,165
Profit for the year –––––– 345,099 345,099 (12,977) 332,122
Exchange differences on translation of
foreign operations ––––– 6 7 3– 6 7 3 ( 3 ) 6 7 0
Total comprehensive income for the year ––––– 6 7 3 345,099 345,772 (12,980) 332,792
Equity-settled share-based payment
expenses – – – 26,37 9––– 26,379 – 26,379
Restricted shares granted under Share
Incentive Plan 6,600 – 56,16 6–––– 62,766 – 62,766
Repurchase obligation for restricted shares – (62,766) ––––– (62,766) – (62,766)
Restricted shares vested – – 10,504 (10,504) ––––––
Shares repurchased for Share Incentive
Plans – (10,088) ––––– (10,088) – (10,088)
Dividends declared –––––– (175,204) (175,204) (2,000) (177,204)
Contribution from non-controlling interests –––––––– 1 9 1 9
Disposal/deregistration of subsidiaries –––––––– 3,315 3,315
Transfer from retained profits –––– 8,849 – (8,849) – – –
Acquisition of non-controlling interests – – (1,677) –––– (1,677) 1,677 –
Others –––––––– 4 7 6 4 7 6
As at 31 December 2023 385,009 (72,854) 218,557 19,001 78,744 (14,120) 1,666,061 2,280,398 32,456 2,312,854
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-10 –


--- page 462 ---
Attributable to owners of the parent
Share capital
Treasury
shares *
Share
premium *
Share award
reserve *
Statutory
reserve *
Other
comprehensive
income *
Retained
profits * Total
Non-controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 34) (note 34) (note 34) (note 34) (note 34) (note 34)
As at 1 January 2024 385,009 (72,854) 218,557 19,001 78,744 (14,120) 1,666,061 2,280,398 32,456 2,312,854
Profit for the year –––––– 181,931 181,931 2,519 184,450
Change in fair value of equity investments
designated at fair value through other
comprehensive income, net of tax ––––– (10,520) – (10,520) – (10,520)
Exchange differences on translation of
foreign operations ––––– 4 4 8– 4 4 8 6 2 5 1 0
Share of other comprehensive income of
associates ––––– 6 9– 6 9– 6 9
Total comprehensive income for the year ––––– (10,003) 181,931 171,928 2,581 174,509
Cancellation of shares repurchased (240) 2,282 (2,042) –––––––
Repurchase obligation for restricted shares – 10,353 29,470 (29,470) – – – 10,353 − 10,353
Equity-settled share-based payment
expenses – – – 17,33 2––– 17,332 – 17,332
Shares repurchased for Share Incentive
Plans – (75,945) ––––– (75,945) – (75,945)
Dividends declared –––––– (201,882) (201,882) (1,316) (203,198)
Acquisition of non-controlling interests – – (484) –––– (484) (8,516) (9,000)
Capital reduction of non-controlling
interests –––––––– (1,600) (1,600)
Transfer from retained profits –––– 17,375 – (17,375) – – –
Transfer of other comprehensive income ––––– 3,274 (3,274) – – –
Contribution from non-controlling interests –––––––– 7,350 7,350
Disposal/deregistration of subsidiaries –––––––– (24,646) (24,646)
Others – – 32 4–––– 3 2 4 1 8 2 5 0 6
As at 31 December 2024 384,769 (136,164) 245,825 6,863 96,119 (20,849) 1,625,461 2,202,024 6,491 2,208,515
* These reserve accounts comprise the consolidated reserves of RMB1,716,807,000, RMB1,895,389,000 and RMB1,817,255,000 in the consolidated stat ements of financial position as at
the end of Relevant Periods, respectively.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-11 –


--- page 463 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax: 213,890 386,466 218,140
Adjustments for:
Finance costs 8 21,627 13,412 12,250
Share of losses/(profits) of associates 4,865 (1,854) (3,584)
Dividend received from an equity
investment designated at fair value
through other comprehensive income – – (144)
Bank interest income 6 (7,303) (14,057) (13,087)
Gains on financial assets at fair value
through profit or loss 6 – (2,453) (4,338)
(Gains)/losses on disposal of items of
property, plant and equipment 6 (1,508) 3,551 301
Losses on early termination of leases 15 427 – 405
(Gains)/losses on disposal of subsidiaries 6 (56) (515) 553
Investment losses/(gains) from
deregistration of subsidiaries, net 6 7,364 1,823 (1,249)
Fair value gains on financial assets at fair
value through profit or loss 6 – (231) (88)
Losses/(gains) on disposal of associates, net 6 – 1,968 (619)
Losses on disposal of items of other
intangible assets 6 ––1
Losses/(gains) from foreign exchange
forward arrangements 6 3,743 1,984 (221)
Depreciation of property, plant and
equipment 14 91,483 94,633 105,736
Depreciation of right-of-use assets 15 21,280 35,105 36,532
Amortisation of other intangible assets 17 1,521 1,866 3,893
Impairment of trade receivables 24 12,658 8,991 7,229
Impairment of deposits and other
receivables 64,022 16,376 1,808
Impairment of property, plant and
equipment 6 2,291 – –
Impairment of inventories 23 8,501 19,464 9,539
Equity-settled share-based payment
expenses 3,126 26,379 17,332
Foreign exchange differences, net (10,736) (975) 3,512
437,195 591,933 393,901
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-12 –


--- page 464 ---
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
(Increase)/decrease in inventories (62,950) 8,129 (1,352)
Increase in trade and bills receivables (70,243) (31,687) (81,539)
Decrease in prepayments, other receivables
and other assets 51,443 15,225 55,870
(Increase)/decrease in pledged deposits (23,354) 38,758 (31,079)
(Increase)/decrease in amounts due from
related parties – (1,453) 210
Increase/(decrease) in amounts due to related
parties 190 (1,753) (392)
Increase in trade and bills payables 49,406 82,169 80,850
Increase in other payables and accruals 30,844 50,633 22,383
Increase in contract liabilities 6,041 1,880 3,029
(Decrease)/increase in other current liabilities (4,324) 2,719 (436)
Increase/(decrease) in deferred income 5,878 1,636 (3,078)
Cash generated from operations 420,126 758,189 438,367
Income tax paid (35,080) (46,766) (64,776)
Interest received 5,909 14,176 13,087
Net cash flows generated from operating
activities 390,955 725,599 386,678
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-13 –


--- page 465 ---
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
CASH FLOWS USED IN INVESTING
ACTIVITIES
Purchase of items of property, plant and
equipment (137,145) (198,186) (132,689)
Proceeds from disposal of items of property,
plant and equipment 3,205 5,276 5,055
Purchase of other intangible assets (1,282) (4,286) (3,483)
Proceeds from disposals of equity
investments designated at fair value
through other comprehensive income – 5,000 726
Purchase of financial assets at fair value
through profit or loss – – (130,863)
Purchase of equity investments designated at
fair value through other comprehensive
income (7,000) (6,000) –
Acquisition of subsidiaries, net of cash
acquired (22,349) – –
Disposal of subsidiaries, net of cash disposed 930 (5,222) (230)
Proceeds from disposal of associates 8,513 714 8,000
Dividend received from an associate – 8,002 1,332
Dividend received from an equity investment
designated at fair value through other
comprehensive income – – 144
Purchase of deposits with original maturity of
more than three months when acquired (125,136) (560,267) (701,091)
Proceeds from maturity of deposits with
original maturity of more than three months
when acquired 108,210 504,486 646,099
Payment for capital injection to associates (11,550) (31,904) (30,097)
Net cash flows used in investing activities (183,604) (282,387) (337,097)
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-14 –


--- page 466 ---
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
CASH FLOWS USED IN FINANCING
ACTIVITIES
Proceeds from capital contributions by
non-controlling interests 3,300 19 7,350
Payments to non-controlling interests for
capital reduction – – (1,600)
Deregistration of a subsidiary, net of cash
disposed – – (21,447)
Proceeds received from restricted shares
granted under Share Incentive Plans 39,489 62,766 –
Payments to grantees for net disposal
proceeds from vested restricted shares
under Share Incentive Plans (3,222) – –
Repurchase of unvested restricted shares (117,558) – (2,196)
Repurchase of shares – (10,088) (75,945)
Proceeds from interest-bearing bank
borrowings 523,165 440,569 185,757
Repayment of interest-bearing bank
borrowings (443,944) (494,117) (196,173)
Interest paid for interest-bearing bank
borrowings (13,256) (6,905) (6,091)
Principal portion of lease payments (15,380) (39,162) (30,068)
Interest portion of lease payments (4,562) (4,514) (4,850)
Acquisition of non-controlling interests – – (9,000)
Listing expenses – (8,693) (37,113)
Dividends paid – (175,204) (201,882)
Dividends paid to non-controlling interests – (2,000) (1,316)
Net cash flows used in financing activities (31,968) (237,329) (394,574)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIV ALENTS 175,383 205,883 (344,993)
Cash and cash equivalents at beginning of
year 666,852 852,071 1,062,110
Effect of foreign exchange rate changes, net 9,836 4,156 (6,055)
CASH AND CASH EQUIV ALENTS AT
END OF YEAR 852,071 1,062,110 711,062
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-15 –


--- page 467 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
Information about the statement of financial position of the Company at the end of Relevant
Periods is as follows:
As at 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 14 101,400 89,642 79,132
Right-of-use assets 24,629 25,112 22,903
Other intangible assets 2,312 3,330 2,598
Investments in subsidiaries 19 698,538 814,842 799,994
Investments in associates 18 48,748 65,319 66,951
Deferred tax assets 32 2 3––
Pledged deposits 26 20,000 – –
Other non-current assets 416 1,336 608
Total non-current assets 896,066 999,581 972,186
CURRENT ASSETS
Inventories 23 19,028 11,561 16,954
Trade and bills receivables 24 32,654 38,847 37,110
Prepayments, other receivables and other
assets 25 20,905 10,393 50,437
Amounts due from related parties 43 – – 114
Amounts due from subsidiaries 606,111 566,081 589,468
Pledged deposits 26 69,844 20,000 12,191
Cash and cash equivalents 26 157,177 147,425 100,495
Total current assets 905,719 794,307 806,769
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-16 –


--- page 468 ---
As at 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
CURRENT LIABILITIES
Trade and bills payables 27 177,986 47,289 49,676
Other payables and accruals 28 20,666 69,851 57,678
Contract liabilities 4,531 695 520
Interest-bearing bank borrowings 30 126,357 40,619 87,311
Lease liabilities 15 – 51 6,069
Amounts due to related parties 43 2,915 1,162 972
Amounts due to subsidiaries 374,875 525,169 587,787
Other current liabilities 98 58 68
Total current liabilities 707,428 684,894 790,081
NET CURRENT ASSETS 198,291 109,413 16,688
TOTAL ASSETS LESS CURRENT
LIABILITIES 1,094,357 1,108,994 988,874
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings 30 8,209 97,600 59,550
Lease liabilities 15 17,066 12,080 8,162
Deferred income 5,010 4,224 3,489
Deferred tax liabilities 32 – 1,440 412
Total non-current liabilities 30,285 115,344 71,613
NET ASSETS 1,064,072 993,650 917,261
EQUITY
Share capital 33 378,409 385,009 384,769
Reserves 34 685,663 608,641 532,492
Total equity 1,064,072 993,650 917,261
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-17 –


--- page 469 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Xiamen Jihong Co., Ltd (the “ Company ”) was incorporated in the People’s Republic of China (the “ PRC ”) as a limited
liability company on 24 December 2003. The registered address of the office of the Company is No. 9 Putou Road, Phase II,
Dongfu Industrial Zone, Haicang District, Xiamen, China. With the approval of the China Securities Regulatory Commission, the
Company completed its initial public offering and was listed on the Shenzhen Stock Exchange (stock code: 002803.SZ) on 12 July
2016. The Company is ultimately controlled by Ms. Zhuang Hao.
During the Relevant Periods, the Company and its subsidiaries (together as the “ Group ”) were principally involved in the
business of paper packaging and cross-border social e-commerce.
As at the end of the Relevant Periods, the Company had direct and indirect interests in its subsidiaries, all of which are
private limited liability companies. The particulars of principal subsidiaries are set out below:
Name * Notes
Place and date of
incorporation/registration
and place of business
Issued
ordinary/
registered
share capital
Percentage of
equity
attributable to
the Company Principal
activitiesDirect Indirect
Hohhot Jihong Printing & Packaging
Co., Ltd. (“ խձखत̹Λ҃ΙՏ
ʮ̡ ”) (“ Hohhot Jihong ”)
(i) PRC/Mainland China
1 September 2009
RMB50,000,000 100% – Paper packaging
Langfang Jihong Packaging Co., Ltd.
(“ʮ̡ ”)
(“Langfang Jihong ”)
(i) PRC/Mainland China
8 January 2013
RMB50,000,000 100% – Paper packaging
Giikin (Xi’an) Digital Technology Co.,
Ltd. (“Ι (Гτ)Ҧ
ʮ̡ ”) (“ Xi’an Giikin ”)
(i) PRC/Mainland China
3 August 2017
RMB10,000,000 – 100% Cross-border social
e-commerce
Lucky Ecommerce Limited
(“ʮ̡ ”)
(“Lucky Ecommerce ”)
(ii) Hong Kong/Hong Kong
1 September 2017
USD1,000,000 – 100% Cross-border social
e-commerce
Giikin (Zhengzhou) Digital Technology
Co., Ltd.
(“Ι (ቍψ)ʮ̡ ”)
(“Zhengzhou Giikin ”)
(i) PRC/Mainland China
23 August 2017
RMB5,000,000 – 100% Cross-border social
e-commerce
Ningxia Jihong Environmental
Protection Packaging Technology
Co., Ltd. (“Ҧ
ʮ̡ ”) (“ Ningxia Jihong ”)
(i) PRC/Mainland China
28 December 2018
RMB50,000,000 100% – Paper packaging
Anhui Jihong EP Paper Products
Co., Ltd. (“ۜ
ʮ̡ ”) (“ Anhui Jihong ”)
(i)
PRC/Mainland China
7 August 2009
RMB50,000,000 100% – Paper packaging
Xiamen Jihong Packaging Industry
Co., Ltd. (“Λ҃̍ༀʈุ
ʮ̡ ”) (“ Xiamen Jihong ”)
(i) PRC/Mainland China
25 March 2020
RMB50,000,000 100% – Paper packaging
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-18 –


--- page 470 ---
Name * Notes
Place and date of
incorporation/registration
and place of business
Issued
ordinary/
registered
share capital
Percentage of
equity
attributable to
the Company Principal
activitiesDirect Indirect
Hainan Giikin Printing Digital
Technology Co., Ltd.
(“ʮ̡ ”)
(“Hainan Giikin ”)
(i) PRC/Mainland China
23 March 2022
RMB1,000,000 − 100% Internet and related
services
Shenzhen Giikin Supply Chain
Management Co., Ltd.
(“ʮ̡ ”)
(“Shenzhen Giikin ”)
PRC/Mainland China
21 September 2022
RMB1,000,000 − 100% Cross-border social
e-commerce
Giiktop (Shen Zhen) Digital
Technology Co., Limited
(“ן܄( ଉέ)ʮ̡ ”)
(“Shenzhen Giiktop ”)
(i) PRC/Mainland China
14 December 2022
RMB10,000,000 85% − Cross-border social
e-commerce
Guangdong Hengqin Giikin Digital
Technology Co., Ltd.
(“Ҧ
ʮ̡ ”)
(“Guangdong Hengqin Giikin ”)
PRC/Mainland China
15 October 2024
RMB1,000,000 − 70% Cross-border social
e-commerce
Luanzhou Jihong Packaging Co., Ltd.
(“ʮ̡ ”)
(“Luanzhou Jihong ”)
(i) PRC/Mainland China
22 January 2014
RMB20,000,000 60% – Paper packaging
Jiangxi Jihong Supply Chain
Management Co., Ltd.
(“ʮ̡ ”)
(“Jiangxi Jihong ”)
(i) PRC/Mainland China
9 September 2019
RMB50,000,000 – 100% E-commerce;
import and
export
Shaanxi Y ongxin Paper Industry
Packing Co., Ltd.
(“ʮ̡ ”)
(“Shaanxi Y ongxin ”)
(i) PRC/Mainland China
21 September 2004
RMB28,571,000 51% – Paper packaging
Xiamen Giikin E-commerce Co., Ltd.
(“ʮ̡ ”)
(“Xiamen Giikin ”)
(i) PRC/Mainland China
1 August 2017
RMB50,000,000 100% – Investment holding
Hangzhou Jimiaoyun Network
Technology Co., Ltd.
(“ʮ̡ ”)
(“Hangzhou Jimiaoyun ”)
(i) PRC/Mainland China
22 September 2020
RMB50,000,000 55% – Internet and related
services
* The English names of the PRC companies above represent management’s best efforts in translating the Chinese names of
these companies as no English names have been registered.
The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results
during the Relevant Periods or formed a substantial portion of the net assets of the Group.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-19 –


--- page 471 ---
Notes:
(i) The statutory financial statements of these companies (except for Hainan Giikin and Shenzhen Giiktop) for the year ended
31 December 2022 prepared in accordance with the China Accounting Standards for Business Enterprises (“ PRC GAAP ”)
were audited by ShineWing Certified Public Accountants LLP Xian Branch (ה( ౷ஷΥྫ )Гτ
הthe statutory financial statements of these companies (except for Shaanxi Y ongxin) for the year ended 31 December
2023 prepared in accordance with the China Accounting Standards for Business Enterprises were audited by Xiamen
Zhongyou Certified Public Accountants Co., Ltd. (ʮ̡ ).
(ii) The statutory financial statements of this company for the years ended 31 December 2022 and 2023 prepared in accordance
with the Hong Kong Financial Reporting Standard for Private Entities (“ HKFS for PE ”) were audited by W.L.HO CPA
LIMITED (ʮ̡ ).
2.1 BASIS OF PRESENTATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards (“ IFRSs ”) which
comprise all standards and interpretations approved by the International Accounting Standards Board (the “ IASB ”).
All IFRSs effective for the accounting period commencing from 1 January 2024, together with the relevant transitional
provisions, have been consistently applied by the Group in the preparation of the Historical Financial Information throughout the
Relevant Periods.
The Historical Financial Information has been prepared under the historical cost convention, except for certain trade and
bills receivables at fair value through other comprehensive income, certain time deposits at fair value through profit or loss,
financial assets at fair value through profit or loss and equity investments designated at fair value through other comprehensive
income which have been measured at fair value.
The Group has prepared the Historical Financial Information on the basis that it will continue to operate as a going
concern.
Basis of consolidation
The consolidated financial statements include the financial statements of the Group for the Relevant Periods. A
subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved
when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct
the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the Company has less than
a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income (“ OCI ”) are attributed to the owners of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 472 ---
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without
a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, any
non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment retained and
any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised in OCI is
reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had
directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not adopted the following new and revised IFRSs that have been issued but are not yet effective in the
Historical Financial Information. The Group intends to apply these new and revised IFRSs, if applicable, when they become
effective.
IFRS 18 Presentation and Disclosure in Financial Statements
3
IFRS 19 Subsidiaries without Public Accountability: Disclosures 3
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of Financial
Instruments 2
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or
Joint V enture 4
Amendments to IAS 21 Lack of Exchangeability 1
Annual Improvements to IFRS Accounting
Standards – V olume 11
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 2
1 Effective for annual periods beginning on or after 1 January 2025
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual/reporting periods beginning on or after 1 January 2027
4 No mandatory effective date yet determined but available for adoption
IFRS 18 sets out requirements on presentation and disclosures in financial statements and it will replace IAS 1 Presentation
of Financial Statements. The new IFRS Accounting Standard introduces new requirements to present specified categories and
defined subtotals in the statement of profit or loss; provide disclosures on management-defined performance measures in the notes
to the financial statements and improve aggregation and disaggregation of information to be disclosed in the financial statements.
Minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share are also made. IFRS 18 will be effective for
annual periods beginning on or after 1 January 2027, with early application permitted. The application of the new standard is not
expected to have material impact on the financial performance and financial position the Group but is expected to affect the
disclosures in the future financial statements. The Group will continue to assess the impact of IFRS 18 on the Group’s
consolidated financial statements.
Except for the IFRS 18, the Directors of the Company anticipate that the application of this amendment to IFRS
Accounting Standards will have no material impact on the Group's consolidated financial statement.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-21 –


--- page 473 ---
2.3 MATERIAL ACCOUNTING POLICIES
Investments in associates
An associate is an entity in which the Group has a long term interest of generally not necessary not less than 20% of
the equity voting rights and over which it has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee, but is not control over those policies.
The Group’s investments in associates are stated in the consolidated statement of financial position at the Group’s
share of net assets under the equity method of accounting, less any impairment losses.
The Group’s share of the post-acquisition results and other comprehensive income of associates is included in the
consolidated statement of profit or loss and consolidated other comprehensive income, respectively. In addition, when there
has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when
applicable, in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions
between the Group and its associates are eliminated to the extent of the Group’s investments in the associates, except where
unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of
associates is included as part of the Group’s investments in associates.
If an investment in an associate becomes an investment in a joint venture or vice versa, the retained interest is not
remeasured. Instead, the investment continues to be accounted for under the equity method. In all other cases, upon loss of
significant influence over the associate or joint control over the joint venture, the Group measures and recognises any
retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss
of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is
recognised in profit or loss.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group,
liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. For each business combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets.
All other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as
incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets includes an input
and a substantive process that together significantly contribute to the ability to create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions
as at the acquisition date. This includes the separation of embedded derivatives in host contracts of the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition
date fair value and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.
Contingent consideration classified as an asset or liability is measured at fair value with changes in fair value recognised in
profit or loss. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is
accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree
over the identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than
the fair value of the net assets acquired, the difference is, after reassessment, recognised in profit or loss as a gain on
bargain purchase.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-22 –


--- page 474 ---
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested
for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash generating
units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating
units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not
reversed in a subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the
operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying
amount of the operation when determining the gain or loss on the disposal. Goodwill disposed of in these circumstances is
measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.
Fair value measurement
The Group measures its certain of financial assets at fair value at the end of each of the Relevant Periods. Fair value
is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell
the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a
principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market
must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each of the Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-23 –


--- page 475 ---
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for non-financial asset is required
(other than inventories and deferred tax assets), the asset’s recoverable amount is estimated. An asset’s recoverable amount
is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss
is charged to profit or loss in the period in which it arises in those expense categories consistent with the function of the
impaired asset.
An assessment is made at the end of each of the Relevant Periods as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has
been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the
carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment loss been
recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss in the period in
which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an
entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services
to the Group or to the parent of the Group.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-24 –


--- page 476 ---
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation
and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any
directly attributable costs of bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and
maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition
criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a
replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group
recognises such parts as individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and
equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as
follows:
Category
Principal annual
rates
(%)
Buildings 3.17-9.50
Leasehold improvements 8.33-50.00
Machinery 9.50-19.00
Motor vehicles 19.00
Other equipment 19.00
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated
on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the
depreciation methods are reviewed, and adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or
retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net sales proceeds
and the carrying amount of the relevant asset.
Construction in progress represents a building under construction, which is stated at cost less any impairment losses,
and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed
funds during the period of construction. Construction in progress is reclassified to the appropriate category of property,
plant and equipment when completed and ready for use.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is the fair value at the date of acquisition. The useful lives of intangible assets are
assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the useful
economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each
financial year end.
Patents and licences
Purchased patents and licences are stated at cost less any impairment losses and are amortised on the straight-line
basis over their estimated useful lives of 5 to 20 years.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-25 –


--- page 477 ---
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its
intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the project and the ability to measure reliably the expenditure during the development.
Product development expenditure which does not meet these criteria is expensed when incurred.
Deferred development costs are stated at cost less any impairment losses and are amortised using the straight-line
basis over the commercial lives of the underlying products not exceeding five to seven years, commencing from the date
when the products are put into commercial production.
Software
Software is stated at cost less any impairment losses and is amortised on the straight-line basis over its estimated
useful life of 5 to 10 years based on the Group’s past experiences and different purposes on usages of the software and the
authorised period for such uses.
The estimated useful life of other intangible assets is determined by considering the period of the economic benefits
to the Group or the periods of validity of intangible assets protected by the relevant laws, as well as by referring to the
industry practice.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognised lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any
lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms and
the estimated useful lives of the assets as follows:
Properties 2 to 10 years
Land use rights 44 to 50 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the exercise of
a purchase option, depreciation is calculated using the estimated useful life of the asset.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-26 –


--- page 478 ---
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid
under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Group and payments of penalties for termination of the lease, if the lease term reflects the Group
exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are
recognised as an expense in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease
term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a
change in assessment of an option to purchase the underlying asset.
(c) Short-term leases
The Group applies the short-term lease recognition exemption to its short-term leases of properties and machinery
(that is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option).
Lease payments on short-term leases are recognised as an expense on a straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade and bills receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient of not adjusting
the effect of a significant financing component, the Group initially measures a financial asset at its fair value, plus in the
case of a financial asset not at fair value through profit or loss, transaction costs. Trade and bills receivables that do not
contain a significant financing component or for which the Group has applied the practical expedient are measured at the
transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other
comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“ SPPI ”) on the
principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value
through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business
model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified
and measured at fair value through other comprehensive income are held within a business model with the objective of both
holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned
business models are classified and measured at fair value through profit or loss.
All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the
Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that
require delivery of assets within the period generally established by regulation or convention in the marketplace.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-27 –


--- page 479 ---
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest income, foreign exchange
revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the same
manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in other
comprehensive income. Upon derecognition, the cumulative fair value change recognised in other comprehensive income is
recycled to the statement of profit or loss.
Financial assets designated at fair value through other comprehensive income (equity investments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity investments
designated at fair value through other comprehensive income when they meet the definition of equity under IAS 32
Financial Instruments: Presentation and are not held for trading. The classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to the statement of profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been established, except when
the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are
recorded in other comprehensive income. Equity investments designated at fair value through other comprehensive income
are not subject to impairment assessment.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and equity investments which the Group had not irrevocably elected to
classify at fair value through other comprehensive income. Dividends on the equity investments are also recognised as
other income in the statement of profit or loss when the right of payment has been established.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a “pass-through” arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has
neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the
Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the
Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Group has retained.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-28 –


--- page 480 ---
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ ECLs ”) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the
next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk
since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on
the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the
date of initial recognition and considers reasonable and supportable information that is available without undue cost or
effort, including historical and forward-looking information. The Group considers that there has been a significant increase
in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates
that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade and bills receivables which apply the simplified
approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for
which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are
not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to
lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated
credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
Simplified approach
For trade and bills receivables that do not contain a significant financing component or when the Group applies the
practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified
approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-29 –


--- page 481 ---
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as loans and borrowings and payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and bills payables, other payables, interest-bearing bank borrowings
and amounts due to related parties.
The Group classifies financial liabilities that arise from a supplier finance arrangement within trade and bills
payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case
if the supplier finance arrangement is part of the working capital used in the Group’s normal operating cycle, the level of
security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance
arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash
flows related to liabilities arising from supplier finance arrangements that are classified in trade and bills payables in the
statement of financial position are included in operating activities in the statement of cash flows. Otherwise, the financial
liabilities are classified in interest-bearing bank borrowings in the statement of financial position and the related cash flows
are included in financing activities in the statement of cash flows.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing bank borrowings are subsequently measured
at amortised cost, using the effective interest rate method unless the effect of discounting would be minimal, in which case
they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as
through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit
or loss.
Financial liability arising from repurchase obligation on own equity instruments
The obligation for the Group to purchase its own equity instruments for cash is recognised initially at the present
value of the redemption amount, and is reclassified from equity. Subsequently, the financial liability is measured in
accordance with IFRS 9 and the remeasurement gain or loss is recorded into profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is
recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-30 –


--- page 482 ---
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis
and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate
proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to
completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-term
highly liquid deposits with a maturity of generally within three months that are readily convertible into known amounts of
cash, subject to an insignificant risk of changes in value and held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and at
banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form an integrate
part of the Group’s cash management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and
it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate
can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the end of
each reporting period of the future expenditures expected to be required to settle the obligation. The increase in the
discounted present value amount arising from the passage of time is included in finance costs in the consolidated statement
of profit or loss.
The periods and terms of product quality warranty are provided in accordance with the laws and regulations related
to the products. The Group has not provided any additional services or product quality warranty, so the product quality
warranty does not constitute a separate performance obligation.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is
recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of each of the
Relevant Periods, taking into consideration interpretations and practices prevailing in the countries in which the Group
operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of each of the Relevant
Periods between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• when the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and
• in respect of taxable temporary differences associated with investments in subsidiaries and associates, when
the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-31 –


--- page 483 ---
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax
losses can be utilised, except:
• when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences; and
• in respect of deductible temporary differences associated with investments in subsidiaries and associates,
deferred tax assets are only recognised to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each of the Relevant Periods and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each of the Relevant Periods and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the end of each of the Relevant Periods.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to
set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Treasury shares
Own equity instruments which are reacquired and held by the Company or the Group (treasury shares) are
recognised directly in equity at cost. No gain or loss is recognised in the statement of profit or loss on the purchase, sale,
issue or cancellation of the Group’s own equity instruments.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the costs, for which it is intended to compensate, are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to the
statement of profit or loss over the expected useful life of the relevant asset by equal annual instalments or deducted from
the carrying amount of the asset and released to the statement of profit or loss by way of a reduced depreciation charge.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred to the
customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those
goods or services.
Based on historical experiences, the Group estimates the amount of variable consideration including sales return
using the expected value method. The amounts relating to the unconditional sales return are insignificant to the Group’s
total revenue for each of the periods presented.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-32 –


--- page 484 ---
The Group primarily generates its revenue from the operations of cross border social e-commerce as well as
production and sales of packaging products. Further details of the Group’s revenue recognition policy are as follows:
(a) Cross border social e-commerce
Revenue from cross border social e-commerce is recognised at a point in time when control of the products is
transferred to the customer, generally on delivery and acceptance of the products by the customers.
(b) Sale of packaging products
Revenue from the sale of packaging products is recognised at a point in time when control of the asset is transferred
to the customer, generally on delivery and acceptance of the packaging products by the customers.
(c) Services
Revenue from services is recognised at the point in time, when the services are provided and accepted by customers.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period,
when appropriate, to the net carrying amount of the financial asset.
Dividend income is recognised when the shareholders’ right to receive payment has been established, it is probable
that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be
measured reliably.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from a
customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the
Group performs under the contract (i.e., transfers control of the related services to the customer).
Share-based payments
The Company operates restricted share schemes. Employees (including directors) of the Group receive remuneration
in the form of share-based payments, whereby employees render services in exchange for equity instruments
(“equity-settled transactions ”).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative
expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the
extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will
ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the
cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the
number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date
fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be
non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate
expensing of an award unless there are also service and/or performance conditions.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification
that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the
date of modification.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-33 –


--- page 485 ---
Where an equity-settled award is cancelled, as at the cancellation date, based on the best estimate of the number of
awards to be vested, any expense not yet recognised for the award is recognised immediately. This includes any award
where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award
is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.
Employee benefits
Pension scheme
The employees of the Group’s subsidiaries which operate in Mainland China are required to participate in a central
pension scheme operated by the local municipal government. These subsidiaries are required to contribute a certain
proportion of its payroll costs to the central pension scheme. The contributions are charged to profit or loss as they become
payable in accordance with the rules of the central pension scheme.
Housing fund and other social insurances
The Group has participated in defined social security contribution schemes for its employees pursuant to the
relevant laws and regulations of the PRC. These include housing fund, basic medical insurance, unemployment insurance,
injury insurance and maternity insurance. The Group makes monthly contributions to the housing fund and other social
insurances. The contributions are charged to profit or loss on an accrual basis. The Group’s liability in respect of these
funds is limited to the contributions payable in each period.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the
cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their
intended use or sale. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Events after the reporting period
If the Group receives information after the reporting period, but prior to the date of authorisation for issue, about
conditions that existed at the end of the reporting period, it will assess whether the information affects the amounts that it
recognises in its financial statements. The Group will adjust the amounts recognised in its financial statements to reflect
any adjusting events after the reporting period and update the disclosures that relate to those conditions in light of the new
information. For non-adjusting events after the reporting period, the Group will not change the amounts recognised in its
financial statements, but will disclose the nature of the non-adjusting events and an estimate of their financial effects, or a
statement that such an estimate cannot be made, if applicable.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders in a general meeting.
Foreign currencies
These Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each
entity in the Group determines its own functional currency and items included in the Historical Financial Information of
each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group
are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at
the end of each of the Relevant Periods. Differences arising on settlement or translation of monetary items are recognised
in the statements of profit or loss.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-34 –


--- page 486 ---
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a
non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value
of the item (i.e., translation difference on the item whose fair value gain or loss is recognised in other comprehensive
income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).
The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at the end of the
reporting period, the assets and liabilities of these entities are translated into RMB at the exchange rates prevailing at the
end of the reporting period and their statements of profit or loss are translated into RMB at the exchange rates that
approximate to those prevailing at the dates of the transactions.
The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange
fluctuation reserve, except to the extent that the differences are attributable to non-controlling interests. On disposal of a
foreign operation, the cumulative amount in the reserve relating to that particular foreign operation is recognised in the
statement of profit or loss.
3. MATERIAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying disclosures, and
the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgement
In the process to applying the Group’s accounting policies, management has made the following judgements, apart
from those involving estimations, which has the most significant effect on the amounts recognised in the Historical
Financial Information.
Business models
The classification of financial assets at initial recognition depends on the Group’s business model for managing
financial assets. When determining the business model, the Group consider how the performance of the business model and
the financial assets held within that business model are evaluated and reported to the entity’s key management personnel,
the risks affecting the performance of financial assets and the risk management, and the manner in which the relevant
management receives remuneration. When assessing whether the objective is to collect contractual cash flows, the Group
needs to analyse and judge the reason, timing, frequency and value of the sale before the maturity date of the financial
assets.
Contractual cash flow characteristics
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics, and the judgements on whether the contractual cash flows are solely payments of principal and interest on
the principal amount outstanding, including the assessment of the modification of the time value of money, the judgement
on whether there is any significant difference from the benchmark cash flow and whether the fair value of the prepayment
features is insignificant for financial assets with prepayment features, etc.
Derecognition of financial assets
Where the Group has transferred the right to receive cash flow arising from an asset but has not transferred or has
retained substantially all risks and rewards associated with such asset, or has not transferred the controlling right in such
asset, such asset shall be recognised and accounted for so long as the Group continues to be involved in such asset. If the
Group has not transferred or has retained substantially all risks and rewards associated with the asset or transferred the
controlling right in the asset, the exercise of significant judgment is often required, and estimations need to be made as to
the extent of the Group’s continued involvement in the asset.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-35 –


--- page 487 ---
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each of the
Relevant Periods, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.
Provision for expected credit losses on trade and other receivables
Except for certain trade and bills receivables, other receivables that the ECLs are individually assessed based on
estimated cash flows, considering historical and forward-looking information, the Group uses a provision matrix to
calculate ECLs for trade and bills receivables, other receivables. The provision rates based on aging for groupings of
various counterparties that have similar loss patterns.
The provision rates are initially based on the Group’s historical observed default rates. The Group will adjust the
historical credit loss experience with forward-looking information. For instance, if forecast economic conditions are
expected to deteriorate over the next year which can lead to an increased number of defaults, the historical default rates are
adjusted. At each reporting date, the historical observed default rates are updated and changes in the forward-looking
estimates are analysed.
The assessment of the correlation among historical observed default rates, forecast economic conditions and ECLs
is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of an
actual default in the future. The information about the ECLs on the Group’s trade and bills receivables and other
receivables are disclosed in note 24 and note 25 to the Historical Financial Information, respectively.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the
right-of-use assets) at the end of each of Relevant Periods. Indefinite life intangible assets are tested for impairment
annually and at other times when such an indicator exists. Other non-financial assets are tested for impairment when there
are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of an asset
or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its
value in use. The calculation of the fair value less costs of disposal is based on available data from binding sales
transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for
disposing of the asset. When value-in-use calculations are undertaken, management must estimate the expected future cash
flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of
those cash flows.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the
value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group
to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount
rate in order to calculate the present value of those cash flows. The carrying amounts of goodwill at 31 December 2022,
2023 and 2024 were RMB9,585,000. Further details are given in note 16.
Fair value of unlisted equity investments
The unlisted equity investments have been valued based on a market method or a discounted cash flow method as
detailed in note 45. The market method requires the Group to determine the comparable public companies (peers) and
select the price multiple. In addition, the Group makes estimates about the discount for illiquidity and size differences. The
discounted cash flow method requires the Group to determine the fair value of unlisted equity investments by discounting
the expected future cash flows using the current discount rates derived from other financial instruments with similar
contractual terms and risk profiles. The Group makes estimates about expected future cash flows, credit risk, volatility, and
applicable discount rates. The Group classifies the fair value of these investments as Level 3. The fair value of the unlisted
equity investments at 31 December 2022, 2023 and 2024 were RMB18,500,000, RMB19,500,000 and RMB8,254,000,
respectively. Further details are included in note 20 to the financial statements.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-36 –


--- page 488 ---
Deferred tax assets
Deferred tax assets are recognised for unused tax losses and deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the losses and deductible temporary difference can be utilised.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based
upon the likely timing and level of future taxable profits together with future tax planning strategies. The carrying values of
deferred tax assets relating to recognised tax losses at 31 December 2022, 2023 and 2024 were nil. The amounts of
unrecognised tax losses at 31 December 2022, 2023 and 2024 were RMB308,798,000, RMB394,849,000 and
RMB466,257,000, respectively. Further details are contained in note 32 to the Historical Financial Information.
Leases – Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental
borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to
borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group “would have to pay”,
which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing
transactions) or when it needs to be adjusted to reflect the terms and conditions of the lease (for example, when leases are
not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit
rating).
Recognition of share-based payment expenses
The Group grants restricted shares to certain management and employees under Share Incentive Plans for incentives.
The vest of restricted shares is conditional upon the satisfaction of specified vesting conditions, including service periods
and/or performance conditions. Judgement is required to take into account the vesting conditions to determine the number
of the restricted shares to be included in the measurement of equity-settled share-based payment expenses.
The cumulative expense recognised for share-based payments at the end of Relevant Periods until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of restricted shares
that will ultimately vest. The charge or credit to the consolidated statement of profit or loss for a period represents the
movement in the cumulative expense recognised as at the beginning and end of that period.
Write-down of inventories
The Group’s inventories are stated at the lower of cost and net realisable value. The Group writes down its
inventories based on estimates of the realisable value with reference to the ageing and conditions of the inventories,
together with the economic circumstances on the marketability of such inventories. Inventories will be reviewed quarterly
for write-down, if appropriate.
Useful lives and residual values of items of property, plant and equipment
In determining the useful lives and residual values of items of property, plant and equipment, the Group has to
consider various factors, such as technical or commercial obsolescence arising from changes or improvements in the
production and provision of services, or from a change in the market demand for the product or service output of the asset,
expected usage of the asset, expected physical wear and tear, care and maintenance of the asset, and legal or similar limits
on the use of the asset. The estimation of the useful life of the asset is based on the experience of the Group with similar
assets that are used in a similar way. Additional depreciation is made if the estimated useful lives and/or residual values of
items of property, plant and equipment are different from previous estimation. Useful lives and residual values are
reviewed at the end of each of the years based on changes in circumstances. Further details of the property, plant and
equipment are set out in note 14 to the Historical Financial Information.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-37 –


--- page 489 ---
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services and has three
reportable operating segments as follows:
(i) The cross-border social e-commerce operation;
(ii) The paper packaging operation; and
(iii) The other operations.
Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/loss,
which is a measure of adjusted profit/loss before tax. The adjusted profit/loss before tax is measured consistently with the Group’s
profit before tax except that impairment losses on financial assets is excluded from such measurement. Management also treat the
Company as part of the paper packaging segment.
Segment assets exclude cash and cash equivalents, time deposits, pledged deposits, deferred tax assets, equity investments
designated at fair value through other comprehensive income, financial assets at fair value through profit or loss and other
unallocated head office and corporate assets as these assets are managed on a group basis.
Segment liabilities exclude interest-bearing bank borrowings, tax payable, deferred tax liabilities and other unallocated
head office and corporate liabilities as these liabilities are managed on a group basis.
Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the
then prevailing market prices.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 490 ---
Y ear ended 31 December 2022
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment revenue
Sales to external customers 3,106,601 1,982,591 286,692 5,375,884
Intersegment sales 1,456 1,007 1,480 3,943
Total segment revenue
Reconciliation:
3,108,057 1,983,598 288,172 5,379,827
Elimination of intersegment sales (3,943)
Revenue from contracts with customers 5,375,884
Segment results
Reconciliation: 217,476 137,169 (20,953) 333,692
Elimination of intersegment results* * (43,122)
Impairment losses on financial assets (76,680)
Profit before tax 213,890
Segment assets
Reconciliation: 545,999 1,893,779 267,090 2,706,868
Elimination of intersegment receivables (479,568)
Corporate and other unallocated assets 1,015,086
Total assets 3,242,386
Segment liabilities
Reconciliation: 371,046 687,135 206,981 1,265,162
Elimination of intersegment payables (479,568)
Corporate and other unallocated liabilities 319,627
Total liabilities 1,105,221
Other segment information
Share of losses of associates 88 4,427 350 4,865
Impairment of property, plant and equipment – 2,291 – 2,291
Impairment of inventories 5,457 3,037 7 8,501
Depreciation and amortisation 10,492 102,703 1,089 114,284
Investments in associates – 63,478 4,337 67,815
Capital expenditure * 9,269 165,492 510 175,271
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-39 –


--- page 491 ---
Y ear ended 31 December 2023
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment revenue
Sales to external customers 4,256,637 2,096,606 341,438 6,694,681
Intersegment sales 1,578 5,741 2,259 9,578
Total segment revenue 4,258,215 2,102,347 343,697 6,704,259
Reconciliation:
Elimination of intersegment sales (9,578)
Revenue from contracts with customers 6,694,681
Segment results
Reconciliation: 259,393 286,842 (33,353) 512,882
Elimination of intersegment results* * (101,049)
Impairment losses on financial assets (25,367)
Profit before tax 386,466
Segment assets
Reconciliation: 688,165 1,946,928 219,060 2,854,153
Elimination of intersegment receivables (528,478)
Corporate and other unallocated assets 1,260,901
Total assets 3,586,576
Segment liabilities
Reconciliation: 472,406 819,140 223,277 1,514,823
Elimination of intersegment payables (528,478)
Corporate and other unallocated liabilities 287,377
Total liabilities 1,273,722
Other segment information:
Share of losses/(profits) of associates 298 (2,729) 577 (1,854)
Impairment of inventories 10,001 9,463 – 19,464
Depreciation and amortisation 25,166 104,367 2,071 131,604
Investments in associates 7,702 72,659 2,078 82,439
Capital expenditure 17,191 210,837 891 228,919
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-40 –


--- page 492 ---
Y ear ended 31 December 2024
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment revenue
Sales to external customers 3,365,903 2,099,461 63,895 5,529,259
Intersegment sales 635 6 1,478 2,119
Total segment revenue 3,366,538 2,099,467 65,373 5,531,378
Reconciliation:
Elimination of intersegment sales (2,119)
Revenue from contracts with customers 5,529,259
Segment results
Reconciliation: 118,721 361,028 (10,309) 469,440
Elimination of intersegment results* * (242,263)
Impairment losses on financial assets (9,037)
Profit before tax 218,140
Segment assets
Reconciliation: 847,373 2,077,636 120,606 3,045,615
Elimination of intersegment receivables (591,880)
Corporate and other unallocated assets 1,049,359
Total assets 3,503,094
Segment liabilities
Reconciliation: 504,602 971,640 159,309 1,635,551
Elimination of intersegment payables (591,880)
Corporate and other unallocated liabilities 250,908
Total liabilities 1,294,579
Other segment information:
Share of profits of associates (596) (2,887) (101) (3,584)
Impairment of inventories 9,553 (379) 365 9,539
Depreciation and amortisation 24,248 120,753 1,160 146,161
Investments in associates 31,084 74,214 2,179 107,477
Capital expenditure 4,849 119,734 22 124,605
* Capital expenditure consists of additions to property, plant and equipment, other intangible assets and assets from
business combinations.
** The segment results of Paper packaging segment contains dividends distributed by the Cross-border social
e-commerce segment. During the relevant periods, the amounts of the distributed dividends were RMB50,000,000,
RMB100,000,000 and RMB200,000,000, respectively. The segment results of Cross-border social e-commerce
segment contains dividends distributed by the Others segment. During the Relevant periods, the amounts of the
distributed dividends were nil, nil and RMB50,000,000, respectively.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-41 –


--- page 493 ---
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Mainland China 2,190,291 2,309,038 2,037,028
Other countries/regions 3,185,593 4,385,643 3,492,231
5,375,884 6,694,681 5,529,259
The revenue information above is based on the locations of the customers.
(b) Non-current assets
Except for the private equity funds invested in Hong Kong, China by the Group (note 21), approximately all of the Group’s
non-current assets as at the end of each of the Relevant Periods were located in Mainland China.
Information about major customers
Revenue of approximately RMB1,277,302,000, RMB1,248,397,000 and RMB1,037,386,000 during the Relevant Periods
was derived from sales by paper packaging segment to a single customer, including sales to a group of entities which are known to
be under common control with that customer.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-42 –


--- page 494 ---
5. REVENUE
Revenue from contracts with customers
(a) Disaggregated revenue information
For the Y ear ended 31 December 2022
Segments
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods or services
Cross-border social e-commerce 3,106,601 – – 3,106,601
Paper packaging – 1,982,591 – 1,982,591
Others – – 286,692 286,692
Total 3,106,601 1,982,591 286,692 5,375,884
Geographical markets
Northeast Asia 1,794,364 – – 1,794,364
Southeast Asia 677,902 – – 677,902
Middle East 409,467 – – 409,467
Mainland China – 1,903,599 286,692 2,190,291
Europe and North America
– U.S. 142,100 29,780 − 171,880
– Europe and other countries in North America 81,399 2,420 − 83,819
Other countries/regions 1,369 46,792 – 48,161
Total 3,106,601 1,982,591 286,692 5,375,884
Timing of revenue recognition
Transferred at a point in time 3,106,601 1,982,591 286,692 5,375,884
Total 3,106,601 1,982,591 286,692 5,375,884
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-43 –


--- page 495 ---
For the year ended 31 December 2023
Segments
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods or services
Cross-border social e-commerce 4,256,637 – – 4,256,637
Paper packaging – 2,096,606 – 2,096,606
Others – – 341,438 341,438
Total 4,256,637 2,096,606 341,438 6,694,681
Geographical markets
Northeast Asia 2,527,377 14,397 – 2,541,774
Southeast Asia 846,452 356 – 846,808
Middle East 385,919 – – 385,919
Mainland China – 1,967,600 341,438 2,309,038
Europe and North America
– U.S. 107,172 13,836 − 121,008
– Europe and other countries in North America 386,364 2,169 − 388,533
Other countries/regions 3,353 98,248 – 101,601
Total 4,256,637 2,096,606 341,438 6,694,681
Timing of revenue recognition
Transferred at a point in time 4,256,637 2,096,606 341,438 6,694,681
Total 4,256,637 2,096,606 341,438 6,694,681
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-44 –


--- page 496 ---
For the year ended 31 December 2024
Segments
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods or services
Cross-border social e-commerce 3,365,903 – – 3,365,903
Paper packaging – 2,099,461 – 2,099,461
Others – – 63,895 63,895
Total 3,365,903 2,099,461 63,895 5,529,259
Geographical markets
Northeast Asia 1,720,230 18,512 – 1,738,742
Southeast Asia 661,202 231 – 661,433
Middle East 340,289 1,488 – 341,777
Mainland China – 1,973,133 63,895 2,037,028
Europe and North America
– U.S. 120,928 6,007 − 126,935
– Europe and other countries in North America 518,015 2,884 − 520,899
Other countries/regions 5,239 97,206 – 102,445
Total 3,365,903 2,099,461 63,895 5,529,259
Timing of revenue recognition
Transferred at a point in time 3,365,903 2,099,461 63,895 5,529,259
Total 3,365,903 2,099,461 63,895 5,529,259
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 497 ---
The following table shows the amounts of revenue recognised in the Relevant Periods that were included in the
contract liabilities at the beginning of each period:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Revenue recognised that was included in
the contract liabilities balance at the
beginning of the year:
Cross-border social e-commerce 570 3,815 659
Paper packaging 3,411 5,448 1,619
Others 2,998 3,686 12,551
6,979 12,949 14,829
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of products
The performance obligation is satisfied upon the acceptance of the products by customers. For customers of
paper packaging, the contract price is usually settled within 30-90 days of delivery. For customers of cross-border
social e-commerce, the contract price is usually prepaid through online platforms or paid by cash on delivery, and
the Group normally settles with platforms or logistics service providers within 3-15 days.
For certain sales of own brands products in cross-border social e-commerce business, there was a two-year
performance obligation period. During the relevant periods, the aggregate amounts of the transaction price allocated
to the remaining performance obligations are RMB35,000, RMB226,000 and RMB564,000, respectively, and the
Group recognise these revenues at the end of the two-year warranty period.
Provision of services
The performance obligation is satisfied at the point in time once the services are completed and accepted by
customers based on the milestone achieved. Contract price is usually paid by customers within 30-90 days.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 498 ---
6. OTHER INCOME AND GAINS, OTHER EXPENSES AND LOSSES
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Other income
Government grants 26,879 35,243 39,034
Bank interest income 7,303 14,057 13,087
34,182 49,300 52,121
Gains
Gains on disposal of items of property, plant and
equipment, net 1,508 – –
Gains on financial assets at fair value through
profit or loss – 2,453 4,338
Gains from foreign exchange forward
arrangements – – 221
Gains on deregistration of
a subsidiary – – 1,261
Fair value gains on financial assets at fair value
through profit or loss – 231 88
Gains on disposal of subsidiaries 56 515 –
Gains on disposal of an associate – – 646
Others 468 882 2,439
2,032 4,081 8,993
Other income and gains 36,214 53,381 61,114
Other expenses and losses
Losses on early termination of leases – – 405
Losses on disposal of items of intangible assets – – 1
Losses on disposal of items of property, plant and
equipment, net – 3,551 301
Impairment of property, plant and equipment 2,291 – –
Losses from foreign exchange forward
arrangements 3,743 1,984 –
Losses on disposal of associates – 1,968 27
Investment loss from deregistration of subsidiaries 7,364 1,823 12
Losses on disposal of subsidiaries – – 553
Others 999 1,174 1,144
Other expenses and losses 14,397 10,500 2,443
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 499 ---
7. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Notes 2022 2023 2024
RMB’000 RMB’000 RMB’000
Cost of inventories sold and services provided* 3,197,031 3,590,378 3,109,944
Advertising expenses 1,491,367 2,242,166 1,761,136
Depreciation of property, plant and equipment 14 91,483 94,633 105,736
Depreciation of right-of-use assets 15(a) 21,280 35,105 36,532
Amortisation of other intangible assets 17 1,521 1,866 3,893
Auditor’s remuneration 1,934 2,452 2,737
Employee benefit expenses (including directors’
and chief executive’s and supervisor’s
remuneration as set out in note 9):
Wages, salaries and allowances 452,950 522,169 564,816
Pension scheme contributions 28,043 30,379 35,000
Staff welfare expense 19,231 18,588 18,615
Equity-settled share-based payment expenses 3,126 26,379 17,332
Bank interest income 6 (7,303) (14,057) (13,087)
Finance costs 8 21,627 13,412 12,250
Foreign exchange (gains)/losses, net (10,736) (975) 3,512
(Gains)/losses on disposal of items of property,
plant and equipment, net 6 (1,508) 3,551 301
Losses on early termination of leases – – 405
Losses on disposal of items of other intangible
assets 6 ––1
Losses/(gains) from foreign exchange forward
arrangements 6 3,743 1,984 (221)
Share of losses/(profits) of associates 4,865 (1,854) (3,584)
Accrual of impairment of trade and bills
receivables 24 12,658 8,915 7,229
Government grants 6 (26,879) (35,243) (39,034)
Impairment of property, plant and equipment 6 2,291 – –
Accrual of impairment of deposits and other
receivables 64,022 16,376 1,808
Impairment of inventories 23 8,501 19,464 9,539
* Cost of inventories sold and services provided include impairment of inventories, expenses relating to depreciation
of property, plant and equipment, depreciation of right-of-use assets and staff costs, which are also included in the
respective total amounts disclosed separately above for each of these types of expenses.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 500 ---
8. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest on bank borrowings 13,534 5,756 6,083
Interest on lease liabilities 4,562 4,514 4,850
Factoring charges (a) 3,531 3,142 1,317
21,627 13,412 12,250
(a) For certain trade receivables of Customer Group A, the Group entered into a factoring arrangement without recourse
with a factoring company, which is also an affiliate of Customer Group A, and recorded relevant factoring charges in
profit and loss.
9. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION
The directors’ and chief executive’s remuneration as recorded in the Relevant Periods is set out below:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Fees 346 400 798
Other emoluments:
Salaries, allowances and benefits in kind 3,291 4,379 9,163
Performance related bonuses 4,345 6,455 5,565
Equity-settled share-based payment expenses – 568 3,368
Pension scheme contributions 153 134 143
8,135 11,936 19,037
(a) Independent non-executive directors
The fees paid/payable to independent non-executive directors during the Relevant Periods were as follows:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Jing Gao (vii) 80 – –
Guang Guo (vi) 80 – –
Bingyi Huang (xii) – – –
Chenhui Y ang (ix) 80 100 120
Guoqing Zhang (viii) 80 100 120
Qinghui Cai (x) 13 100 20
Jianshu Han (xi) 13 100 120
Y ongheng Xue (xviii) – – 251
Y ongqian Wu (xix) – – 167
346 400 798
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 501 ---
Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Restricted
share awards
Pension
scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2022
Chief executive:
Hao Zhuang (i) – 48 0––– 4 8 0
Directors:
Heping Zhang (iii) – 613 – – 19 632
Shu Zhuang (iv) – 493 – – 20 513
Y apeng Wang (ii) – 737 3,920 – 51 4,708
Shengxing Liao (v) ––––––
Independent directors:
Qinghui Cai (x) 1 3–––– 1 3
Jianshu Han (xi) 1 3–––– 1 3
Chenhui Y ang (ix) 8 0–––– 8 0
Guoqing Zhang (viii) 8 0–––– 8 0
Guang Guo (vi) 8 0–––– 8 0
Jing Gao (vii) 8 0–––– 8 0
Supervisors:
Xueting Bai (xiii) – 21 4––6 2 2 0
Zhuokai He (xiv) – 13 4––6 1 4 0
Guanhong Hu (xvi) – 326 25 – 13 364
Haiying Wang (xv) – 294 400 – 38 732
346 3,291 4,345 – 153 8,135
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 502 ---
Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Restricted
share awards
Pension
scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2023
Chief executive:
Hao Zhuang (i) – 1,43 6––– 1 ,436
Directors:
Heping Zhang (iii) – 701 – – 19 720
Shu Zhuang (iv) – 640 – – 19 659
Y apeng Wang (ii) – 826 6,420 568 71 7,885
Shengxing Liao (v) ––––––
Independent directors:
Qinghui Cai (x) 10 0–––– 1 0 0
Jianshu Han (xi) 10 0–––– 1 0 0
Chenhui Y ang (ix) 10 0–––– 1 0 0
Guoqing Zhang (viii) 10 0–––– 1 0 0
Supervisors:
Xueting Bai (xiii) – 23 0––6 2 3 6
Zhuokai He (xiv) – 19 1––5 1 9 6
Guanhong Hu (xvi) – 355 35 – 14 404
400 4,379 6,455 568 134 11,936
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-51 –


--- page 503 ---
Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Restricted
share awards
Pension
scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2024
Chief executive:
Hao Zhuang (i) – 2,31 5––– 2 ,315
Directors:
Heping Zhang (iii) – 1,649 – – 19 1,668
Shu Zhuang (iv) – 1,681 – – 19 1,700
Y apeng Wang (ii) – 1,894 4,621 1,057 73 7,645
Shengxing Liao (v) ––––––
Tashan Lu (xvii) – 751 – 2,311 6 3,068
Independent directors:
Qinghui Cai (x) 2 0–––– 2 0
Jianshu Han (xi) 12 0–––– 1 2 0
Chenhui Y ang (ix) 12 0–––– 1 2 0
Guoqing Zhang (viii) 12 0–––– 1 2 0
Wing Hang Alfred Sit (xviii) 25 1–––– 2 5 1
Weng Sin Ng (xix) 16 7–––– 1 6 7
Supervisors:
Xueting Bai (xiii) – 23 3––6 2 3 9
Zhuokai He (xiv) – 19 4––6 2 0 0
Guanhong Hu (xvi) – 446 944 – 14 1,404
798 9,163 5,565 3,368 143 19,037
(i) Ms. Hao Zhuang has been appointed as a director of the Company and chairman of the Board of Directors
with effect from December 2010, and re-designated as a director and general manager in November 2022.
(ii) Mr. Y apeng Wang has been appointed as a director and vice chairman of the Board of Directors with effect
from September 2020, and re-designated as a director and chairman of the Board of Directors in November
2022.
(iii) Mr. Heping Zhang has been appointed as a director and general manager of the Company with effect from
November 2016 and re-designated as a director, deputy general manager and vice chairman of the Board of
Directors in November 2022.
(iv) Mr. Shu Zhuang has been appointed as a director of the Company with effect from December 2010.
(v) Mr. Shengxing Liao has been appointed as a director of the Company with effect from November 2019.
(vi) Mr. Guang Guo has been appointed as an independent director of the Company with effect from February
2016 and retired in November 2022.
(vii) Mr. Jing Gao has been appointed as an independent director of the Company with effect from February 2016
and retired in November 2022.
(viii) Mr. Guoqing Zhang has been appointed as an independent director of the Company with effect from May
2021.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-52 –


--- page 504 ---
(ix) Mr. Chenhui Y ang has been appointed as an independent director of the Company with effect from September
2020.
(x) Mr. Qinghui Cai has been appointed as an independent director of the Company with effect from November
2022 and retired in February 2024.
(xi) Mr. Jianshu Han has been appointed as an independent director of the Company with effect from November
2022.
(xii) Mr. Bingyi Huang has been appointed as an independent director of the Company with effect from November
2016 and retired in May 2021.
(xiii) Ms. Xueting Bai has been appointed as a chairman of the supervisory committee with effect from November
2011.
(xiv) Mr. Zhuokai He has been appointed as a supervisor of the Company with effect from November 2019.
(xv) Mr. Haiying Wang has been appointed as a supervisor of the Company with effect from November 2019 and
retired in November 2022.
(xvi) Mr. Guanhong Hu has been appointed as a supervisor of the Company with effect from November 2022.
(xvii) Mr. Tashan Lu has been appointed as a director of the Company with effect from February 2024.
(xviii) Mr. Wing Hang Alfred Sit has been appointed as an independent director of the Company with effect from
February 2024.
(xix) Ms. Weng Sin Ng has been appointed as an independent director of the Company with effect from February
2024.
There was no arrangement under which a director or a supervisor waived or agreed to waive any remuneration
during the Relevant Periods.
10. FIVE HIGHEST PAID EMPLOYEES
The five individuals with the highest emoluments in the Group during the Relevant Periods included nil, one and one
directors, respectively. Details of those directors’ remuneration are set out in note 9 above. Details of the remuneration of the
highest paid employees who are neither a director nor chief executive of the Company are as follows:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Salaries, allowances and benefits in kind 1,592 1,412 1,697
Performance related bonuses 10,625 12,140 22,835
Equity-settled share-based payment expenses 510 2,668 1,130
Pension scheme contributions 77 77 77
12,804 16,297 25,739
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 505 ---
The numbers of non-director and non-chief executive highest paid employees whose remuneration fell within the following
bands are as follows:
Number of employees
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Nil to RMB1,000,000 – – –
RMB1,000,001 to RMB2,000,000 2 – –
RMB2,000,001 to RMB3,000,000 2 – –
Over RMB3,000,000 1 4 4
11. INCOME TAX
The Group is subject to income tax on each entity basis on profits arising in or derived from the jurisdictions in which
members of the Group are domiciled and operate.
PRC corporate income tax
Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law ”) and Implementation Regulation of the EIT
Law, the EIT rate of the Group’s PRC subsidiaries is 25% unless subject to preferential tax as set out below.
The Company was qualified as High and New Technology Enterprises (“ HNTE ”) on 21 October 2020 and was
entitled to a preferential tax rate of 15% during 2022. This qualification is subject to review by the relevant tax authority in
the PRC for every three years. The tax rate applicable to the Company was 25% since 2023 as the Company was not
qualified for the HNTE.
Certain of the Group’s PRC subsidiaries are accredited as HNTE and were therefore entitled to a preferential income
tax rate of 15% during the Relevant Periods. Such qualifications are subject to review by the relevant tax authority in the
PRC for every three years.
Certain subsidiaries engaged in the “Encouraged Industries in the Western Region” are eligible for the preferential
EIT rate of 15%.
One of the Group’s PRC subsidiaries is qualified as a “Double Soft Enterprise” (“ DSE ”) under the Corporate
Income Tax Law during the Relevant Periods. According to the relevant tax regulations, the qualified subsidiary was
exempted from CIT for two years, followed by a 50% reduction in the applicable tax rates for the next three years if the
criteria of DSE are met each year, commencing from 2019, the first year of profitable operation.
Certain subsidiaries were in line with the polices in Notice on Preferential Corporate Income Tax Policies for
Kashgar and Khorgos Special Economic Development Zones in Xinjiang. The corporate income tax shall be exempted
within five years from the tax year to which the first production and operation income belongs.
Certain subsidiaries were qualified as small and micro enterprises and were eligible to calculate their taxable
income at a reduced rate of 25% and pay corporate income tax at a 20% tax rate during 2022, 2023 and 2024, respectively.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-54 –


--- page 506 ---
HK profit tax
Hong Kong profits tax is calculated at 16.5% on the estimated assessable profits for the Relevant Periods. However,
one subsidiary of the Group which is qualifying corporation can elect for the two-tiered Profits Tax rates regime. Under the
two-tiered Profits Tax rate regime, the first HK$2,000,000 of assessable profits of the qualifying Group entity established
in Hong Kong are taxed at 8.25% and the remaining profits are taxed at 16.5%.
Taxes on profits assessable elsewhere have been calculated at the rates of taxation prevailing in the respective
jurisdictions in which the Group operates.
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current income tax
– Mainland China 41,870 54,072 31,171
– Hong Kong 810 2,664 2,468
Deferred tax (note 32) (369) (2,392) 51
42,311 54,344 33,690
A reconciliation of the tax expense applicable to profit before tax at the statutory tax rate for the jurisdiction in
which the Company is domiciled to the tax expense at the effective tax rates is as follows:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit before tax 213,890 386,466 218,140
Tax at the PRC EIT rate of 25% 53,473 96,616 54,535
Effect of different tax rate (34,737) (42,115) (26,276)
Adjustments in respect of current tax of
previous years 1,446 347 1,508
Invest loss/(income) not subject to tax 707 (362) (960)
Expenses not deductible for tax 2,300 6,316 4,780
Utilisation of previously unrecognised tax
losses – (3,261) (3,072)
Tax losses and deductible temporary
differences not recognized 43,153 17,041 18,738
Additional deductible allowance for
research and development expenses and
others (a) (24,031) (20,238) (15,563)
42,311 54,344 33,690
(a) According to the relevant laws and regulations promulgated by the State Taxation Administration of the PRC,
enterprises engaging in research and development activities are entitled to claim additional deduction of their
research and development costs.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-55 –


--- page 507 ---
12. DIVIDENDS
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Dividends declared to owners of the parent – 175,204 201,882
On 30 January 2023, the Company’s shareholders approved the third quarter of 2022 profit distribution plan at an
extraordinary general meeting, pursuant to which a dividend of RMB0.263 for every share of the Company’s 378,409,288 shares,
in an aggregate amount of RMB99,522,000, was paid in March 2023 to shareholders of the Company.
On 15 September 2023, the Company’s shareholders approved the 2023 half-year profit distribution plan at an
extraordinary general meeting, pursuant to which a dividend of RMB0.2 for every share of the Company’s 378,409,288 shares, in
an aggregate amount of RMB75,682,000, was paid in September 2023 to shareholders of the Company.
On 22 April 2024, the Company’s shareholders approved the 2023 profit distribution plan at an annual general meeting,
pursuant to which a dividend of RMB0.36 for every share of the Company’s 380,067,788 shares, in an aggregate amount of
RMB136,824,000, was paid in April 2024 to shareholders of the Company.
On 6 December 2024, the Company’s shareholders approved the profit distribution plan for the first three quarters in 2024
at an annual general meeting, pursuant to which a dividend of RMB0.18 for every share of the Company’s 378,743,588 shares, in
an aggregate amount of RMB68,174,000, was paid in December 2024 to shareholders of the Company.
The dividends declared in relation to the revocable non-vested restricted shares under Share Incentive Plans amounting to
RMB3,116,000 were recorded as a deduction of repurchase obligation for restricted shares included in other payables and
accruals.
13. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
(a) Basic
Basic earnings per share (“ EPS ”) is calculated by dividing the profit attributable to owners of the Company by the
weighted average number of ordinary shares in issue during the Relevant Periods, respectively.
The following reflects the income and share data used in the basic earnings per share computation:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit attributable to owners of the parent 183,980 345,099 181,931
Less: dividends payable to
expected vested restricted shares – 2,813 1,030
Profit attributable to owners of the
Company used in calculating basic EPS 183,980 342,286 180,901
Weighted average number of ordinary
shares in issue during the year used in
the basic earnings per share calculation 372,333,981 372,502,844 370,201,726
Basic EPS (RMB per share) 0.48 0.92 0.49
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-56 –


--- page 508 ---
(b) Diluted
The restricted shares granted under Share Incentive Plans by the Company have potential dilutive effect on the EPS.
Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding by the assumption of
the vesting of all potential dilutive ordinary shares arising from Share Incentive Plans (collectively forming the
denominator for computing the diluted EPS).
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit attributable to owners of the
Company used in calculating diluted EPS 183,980 345,099 181,931
Weighted average number of ordinary
shares in issue during the year used in
the basic earnings per share calculation 372,333,981 372,502,844 370,201,726
Adjustments for potential shares arising
from Share Incentive Plans 79,291 1,152,791 –
Weighted average number of shares used in
calculating diluted EPS 372,413,272 373,655,635 370,201,726
Diluted EPS (RMB per share) 0.48 0.92 0.49
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-57 –


--- page 509 ---
14. PROPERTY, PLANT AND EQUIPMENT
Group
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost 371,267 11,200 651,780 9,030 49,470 13,220 1,105,967
Accumulated depreciation and
impairment (77,927) (4,996) (255,200) (4,176) (23,397) – (365,696)
Net carrying amount 293,340 6,204 396,580 4,854 26,073 13,220 740,271
At 1 January 2022, net of
accumulated depreciation and
impairment 293,340 6,204 396,580 4,854 26,073 13,220 740,271
Additions 19,085 5,093 53,495 684 6,766 83,708 168,831
Depreciation provided during the
year (17,465) (2,770) (62,285) (1,543) (7,420) – (91,483)
Disposals – – (11,305) (218) (136) – (11,659)
Transfers 1,915 – 36,144 28 3,410 (41,497) –
Impairment – – (980) (21) (7) (1,283) (2,291)
At 31 December 2022, net of
accumulated depreciation and
impairment 296,875 8,527 411,649 3,784 28,686 54,148 803,669
At 31 December 2022:
Cost 392,267 16,293 724,567 9,045 58,020 55,431 1,255,623
Accumulated depreciation and
impairment (95,392) (7,766) (312,918) (5,261) (29,334) (1,283) (451,954)
Net carrying amount 296,875 8,527 411,649 3,784 28,686 54,148 803,669
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-58 –


--- page 510 ---
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost 392,267 16,293 724,567 9,045 58,020 55,431 1,255,623
Accumulated depreciation and
impairment (95,392) (7,766) (312,918) (5,261) (29,334) (1,283) (451,954)
Net carrying amount 296,875 8,527 411,649 3,784 28,686 54,148 803,669
At 1 January 2023, net of
accumulated depreciation and
impairment 296,875 8,527 411,649 3,784 28,686 54,148 803,669
Additions 3,538 3,004 58,232 977 8,964 140,380 215,095
Depreciation provided during the
year (20,002) (3,601) (60,284) (1,033) (9,713) – (94,633)
Disposals (140) – (4,087) (592) (2,679) – (7,498)
Transfers 88,328 – 89,938 – 1,963 (180,229) –
At 31 December 2023, net of
accumulated depreciation and
impairment 368,599 7,930 495,448 3,136 27,221 14,299 916,633
At 31 December 2023:
Cost 483,941 19,297 846,631 8,395 63,026 15,135 1,436,425
Accumulated depreciation and
impairment (115,342) (11,367) (351,183) (5,259) (35,805) (836) (519,792)
Net carrying amount 368,599 7,930 495,448 3,136 27,221 14,299 916,633
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-59 –


--- page 511 ---
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost 483,941 19,297 846,631 8,395 63,026 15,135 1,436,425
Accumulated depreciation and
impairment (115,342) (11,367) (351,183) (5,259) (35,805) (836) (519,792)
Net carrying amount 368,599 7,930 495,448 3,136 27,221 14,299 916,633
At 1 January 2024, net of
accumulated depreciation and
impairment 368,599 7,930 495,448 3,136 27,221 14,299 916,633
Additions 9,727 1,280 42,571 180 7,891 63,246 124,895
Depreciation provided during the
year (21,363) (3,075) (70,516) (1,082) (9,700) – (105,736)
Disposals (173) – (4,565) (117) (501) – (5,356)
Transfers – – 60,526 1,019 339 (61,884) –
At 31 December 2024, net of
accumulated depreciation and
impairment 356,790 6,135 523,464 3,136 25,250 15,661 930,436
At 31 December 2024:
Cost 492,279 20,577 929,100 9,371 66,470 16,497 1,534,294
Accumulated depreciation and
impairment (135,489) (14,442) (405,636) (6,235) (41,220) (836) (603,858)
Net carrying amount 356,790 6,135 523,464 3,136 25,250 15,661 930,436
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-60 –


--- page 512 ---
Company
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost 57,387 349 156,836 2,812 10,881 4,071 232,336
Accumulated depreciation and
impairment (16,760) (326) (87,833) (1,837) (8,910) – (115,666)
Net carrying amount 40,627 23 69,003 975 1,971 4,071 116,670
At 1 January 2022, net of
accumulated depreciation and
impairment 40,627 23 69,003 975 1,971 4,071 116,670
Additions – – 907 – 94 1,373 2,374
Depreciation provided during the
year (1,884) (18) (12,735) (299) (513) – (15,449)
Disposals – – (803) (104) (5) – (912)
Transfers – – 2,569 – – (2,569) –
Impairment ––––– ( 1 , 2 8 3 ) (1,283)
At 31 December 2022, net of
accumulated depreciation and
impairment 38,743 5 58,941 572 1,547 1,592 101,400
At 31 December 2022:
Cost 57,387 349 157,598 2,303 10,877 2,875 231,389
Accumulated depreciation and
impairment (18,644) (344) (98,657) (1,731) (9,330) (1,283) (129,989)
Net carrying amount 38,743 5 58,941 572 1,547 1,592 101,400
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-61 –


--- page 513 ---
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost 57,387 349 157,598 2,303 10,877 2,875 231,389
Accumulated depreciation and
impairment (18,644) (344) (98,657) (1,731) (9,330) (1,283) (129,989)
Net carrying amount 38,743 5 58,941 572 1,547 1,592 101,400
At 1 January 2023, net of
accumulated depreciation and
impairment 38,743 5 58,941 572 1,547 1,592 101,400
Additions – – 2,832 – 110 2,146 5,088
Depreciation provided during the
year (1,884) (5) (10,735) (265) (499) – (13,388)
Disposals – – (3,458) – – – (3,458)
Transfers – – 3,633 – 46 (3,679) –
At 31 December 2023, net of
accumulated depreciation and
impairment 36,859 – 51,213 307 1,204 59 89,642
At 31 December 2023:
Cost 57,387 349 157,882 2,303 11,033 895 229,849
Accumulated depreciation and
impairment (20,528) (349) (106,669) (1,996) (9,829) (836) (140,207)
Net carrying amount 36,859 – 51,213 307 1,204 59 89,642
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-62 –


--- page 514 ---
Buildings
Leasehold
improvements Machinery
Motor
vehicles
Other
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost 57,387 349 157,882 2,303 11,033 895 229,849
Accumulated depreciation and
impairment (20,528) (349) (106,669) (1,996) (9,829) (836) (140,207)
Net carrying amount 36,859 – 51,213 307 1,204 59 89,642
At 1 January 2024, net of
accumulated depreciation and
impairment 36,859 – 51,213 307 1,204 59 89,642
Additions 2,05 6––– 2 7 7 1,071 3,404
Depreciation provided during the
year (1,943) – (9,342) (234) (366) – (11,885)
Disposals – – (2,027) – (2) – (2,029)
Transfers – – – 1,007 123 (1,130) –
At 31 December 2024, net of
accumulated depreciation and
impairment 36,972 – 39,844 1,080 1,236 – 79,132
At 31 December 2024:
Cost 59,443 349 154,482 3,310 11,390 836 229,810
Accumulated depreciation and
impairment (22,471) (349) (114,638) (2,230) (10,154) (836) (150,678)
Net carrying amount 36,972 – 39,844 1,080 1,236 – 79,132
At the end of the Relevant Periods, certain of the Group’s buildings were pledged to secure bank facilities granted to the
Group for borrowings and bills payables (note 30).
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-63 –


--- page 515 ---
15. LEASES
The Group as a lessee
The Group has lease contracts for properties used in its operations. Lump sum payments were made upfront to
acquire the land use rights with periods of 44 to 50 years, and no ongoing payments will be made under the terms of these
land use rights. Leases of properties generally have lease terms between 2 to 10 years.
(a) Right-of-use assets
Group
The carrying amounts of right-of-use assets and the movements during the Relevant Periods are as follows:
Properties Land use rights Total
RMB’000 RMB’000 RMB’000
As at 1 January 2022 71,871 98,406 170,277
Additions 31,551 – 31,551
Depreciation charge (19,034) (2,246) (21,280)
Termination (8,091) – (8,091)
As at 31 December 2022 and 1 January
2023 76,297 96,160 172,457
Additions 50,109 – 50,109
Depreciation charge (32,858) (2,247) (35,105)
As at 31 December 2023 and 1 January
2024 93,548 93,913 187,461
Additions 34,440 – 34,440
Depreciation charge (34,255) (2,277) (36,532)
Termination (9,019) – (9,019)
As at 31 December 2024 84,714 91,636 176,350
At the end of the Relevant Periods, certain of the Group’s right-of-use assets were pledged to secure bank facilities
granted to the Group for borrowings and bills payables (note 30).
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-64 –


--- page 516 ---
(b) Lease liabilities
Group
The carrying amount of lease liabilities (not included under interest-bearing bank borrowings) and the movements
during the Relevant Periods are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
At beginning of year 68,931 77,438 88,385
Additions 31,551 50,109 34,440
Accretion of interest recognised during the
year 4,562 4,514 4,850
Payments (19,942) (43,676) (34,918)
Termination (7,664) – (8,614)
At end of year 77,438 88,385 84,143
Analysed into:
Current portion 23,948 25,012 34,678
Non-current portion 53,490 63,373 49,465
Company
The carrying amount of lease liabilities (not included under interest-bearing bank borrowings) and the movements
during the Relevant Periods are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
At beginning of year 23,932 17,066 12,131
Additions – 3,742 2,491
Accretion of interest recognised during the
year 1,127 891 725
Payments (1,408) (9,568) (1,116)
Termination (6,585) – –
At end of year 17,066 12,131 14,231
Analysed into:
Current portion – 51 6,069
Non-current portion 17,066 12,080 8,162
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-65 –


--- page 517 ---
(c) The amounts recognised in consolidated statements of profit or loss in relation to leases are as follows:
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest on lease liabilities 4,562 4,514 4,850
Depreciation charge of right-of-use assets 21,280 35,105 36,532
Losses on early termination of leases 427 – 405
Expense relating to short-term leases 2,633 4,237 4,110
Total amount recognised in profit or loss 28,902 43,856 45,897
16. GOODWILL
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
At beginning of year
Cost 1,665 9,585 9,585
Net carrying amount 1,665 9,585 9,585
Cost at beginning of year, net of accumulated
impairment 1,665 9,585 9,585
Additions (note 37) 7,920 – –
Cost and carrying amount at end of year 9,585 9,585 9,585
At end of year
Cost 9,585 9,585 9,585
Net carrying amount 9,585 9,585 9,585
Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the following cash-generating units (“ CGU ”) for
impairment testing:
• SENADA BIKES CGU; and
• Jinan Jilian packaging products CGU.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 518 ---
The carrying amount of goodwill allocated to each of the CGUs is as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
SENADA BIKES CGU 7,920 7,920 7,920
Jinan Jilian packaging products CGU 1,665 1,665 1,665
9,585 9,585 9,585
SENADA BIKES CGU
Management engaged an independent external valuer to assess the recoverable amounts of the goodwill as at the end
of each of the Relevant Periods. The recoverable amount of SENADA BIKES CGU has been determined based on a
value-in-use calculation using cash flow projections based on financial budgets covering a five-year period approved by
senior management. The discount rate applied to the cash flow projections is 13.17%, 13.92% and 15.17% as at the end of
each of the Relevant Periods. The cash flows beyond the five-year period are extrapolated using zero growth rate and the
business is assumed that it would operate perpetually.
The following table sets out the key assumptions adopted by management in the impairment assessment:
As at 31 December
2022 2023 2024
Revenue annual growth rate – average of
the forecast period 14.25% 13.25% 11.37%
Average gross margins 22.97% 24.32% 26.40%
Pre-tax discount rate 13.17% 13.92% 15.17%
As at 31 December 2022, 2023 and 2024, based on the value-in-use calculations, the recoverable amount exceeded
the carrying amount of SENADA BIKES CGU by RMB1,390,000, RMB12,010,000 and RMB8,747,000, respectively.
Key assumptions for value in use calculations
Assumptions were used in the value-in-use calculation of the CGUs for the Relevant Periods. The key assumptions
used in the value in use calculations reflect a combination of internal and external factors impacting budgeted sales and
gross margins and discount rates. The following describes each key assumption on which management has based its cash
flow projections to undertake impairment testing of goodwill:
Budgeted sales and gross margins – The basis used to determine the value assigned to the budgeted sales and gross
margins is the average results achieved in the year immediately before the budget year, increased for expected efficiency
improvements, and expected market development.
Discount rate – The cash flow projections are discounted using an discount rate of 13.17%, 13.92% and 15.17% as
of 31 December 2022, 2023 and 2024, respectively. The discount rates reflect the current market assessments of the time
value of money and are based on the estimated cost of capital.
The value assigned to the key assumptions on the market development of the SENADA BIKES and discount rate are
consistent with external information sources.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-67 –


--- page 519 ---
Sensitivity analysis for the SENADA BIKES CGU valuation
Management of the Company has performed sensitivity test by decreasing 0.3% of budgeted sales, decreasing 0.3%
of gross margins or increasing 0.3% of discount rate, with all other key assumptions held constant. The impacts on the
amount by which SENADA BIKES CGU recoverable amount exceed its carrying amount (“ headroom ”) are as below:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Budgeted sales decreased by 0.3% (1,114) (1,374) (1,129)
Gross margins decreased by 0.3% (1,351) (1,650) (1,215)
Discount rate increased by 0.3% (1,121) (1,381) (913)
The headroom corresponding to the impact of the above key assumptions are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Headroom – decreasing budgeted sales by
0.3% 276 10,636 7,618
Headroom – decreasing gross margins by
0.3% 39 10,360 7,532
Headroom – increasing discount rate by
0.3% 269 10,629 7,834
Due to the proximity of the acquisition date of SENADA BIKES CGU to 31 December 2022, the appraised value of
SENADA BIKES CGU as at 31 December 2022 is close to the consideration for acquisition of SENADA BIKES CGU, with
a small headroom. Based on the headroom of the impairment assessment for the Relevant Periods, management of the
Company believe that any reasonably possible change in any of the key assumptions would not result in an impairment
provision of goodwill.
These sensitivities analysis are based on changing the relevant assumption while holding other assumptions
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
Considering there was still sufficient headroom based on the assessment, the management believe there was no
impairment for the goodwill as at the end of each of the Relevant Periods.
Based on the results of the abovementioned assessments as conducted by management and the independent external
valuer, the directors of the Company conclude that no impairment loss on the aforementioned goodwill is required to be
recognised as at the end of each of the Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-68 –


--- page 520 ---
17. OTHER INTANGIBLE ASSETS
Non-
patented
technology Patent Software Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022:
Cost 377 6,547 6,631 – 13,555
Accumulated amortisation (91) (1,128) (2,804) – (4,023)
Net carrying amount 286 5,419 3,827 – 9,532
Cost at 1 January 2022, net of
accumulated amortisation 286 5,419 3,827 – 9,532
Additions – 13 1,074 5,353 6,440
Amortisation provided during the year (30) (383) (826) (282) (1,521)
At 31 December 2022, net of
accumulated amortisation 256 5,049 4,075 5,071 14,451
At 31 December 2022:
Cost 377 6,560 7,705 5,353 19,995
Accumulated amortisation (121) (1,511) (3,630) (282) (5,544)
Net carrying amount 256 5,049 4,075 5,071 14,451
Cost at 1 January 2023, net of
accumulated amortisation 256 5,049 4,075 5,071 14,451
Additions 51 116 1,534 9,091 10,792
Amortisation provided during the year (40) (499) (749) (578) (1,866)
At 31 December 2023, net of
accumulated amortisation 267 4,666 4,860 13,584 23,377
At 31 December 2023:
Cost 428 6,676 9,239 14,444 30,787
Accumulated amortisation (161) (2,010) (4,379) (860) (7,410)
Net carrying amount 267 4,666 4,860 13,584 23,377
Cost at 1 January 2024, net of
accumulated amortisation 267 4,666 4,860 13,584 23,377
Additions – 6 340 81 427
Amortisation provided during the year (40) (408) (1,420) (2,025) (3,893)
Disposals (1) – – – (1)
At 31 December 2024, net of
accumulated amortisation 226 4,264 3,780 11,640 19,910
At 31 December 2024:
Cost 422 6,682 9,579 14,525 31,208
Accumulated amortisation (196) (2,418) (5,799) (2,885) (11,298)
Net carrying amount 226 4,264 3,780 11,640 19,910
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-69 –


--- page 521 ---
18. INVESTMENTS IN ASSOCIATES
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Share of net assets 61,950 76,418 98,918
Goodwill on acquisition 5,865 6,021 8,559
67,815 82,439 107,477
The Group’s trade payable balances with the associates are disclosed in note 43 to the Historical Financial Information.
Particulars of the Group’s material associates are as follows:
Name
Particulars of
issued shares
held
Place of
registration
and business
Percentage of ownership interest
attributable to the Group Principal activities
As at 31 December
2022 2023 2024
Xiamen Haisheng Rongchuang
Information Technology Co.,
Ltd.(“ Xiamen Haisheng ”)
Ordinary shares PRC/Mainland
China
37% 37% 37% Information technology
services
Tianjin Masterwork Health
Technology Co., Ltd.
(“Tianjin Masterwork ”)
Ordinary shares PRC/Mainland
China
40% 40% 40% Scientific research and
technology services
Fujian Strait Copyright
Operation Co., Ltd. (“ Fujian
Strait ”)
Ordinary shares PRC/Mainland
China
– 49% 49% Copyright and
intellectual property
services
Shenzhen Jiashe Network
Technology Co., Ltd.
(“Shenzhen Jiashe ”)
Ordinary shares PRC/Mainland
China
– – 20% Technology promotion
and application
services
The shareholdings in Xiamen Haisheng and Fujian Strait are held by the Company. The shareholdings in Tianjin
Masterwork and Shenzhen Jiashe are held through wholly-owned subsidiaries of the Company.
Xiamen Haisheng, Tianjin Masterwork, Fujian Strait and Shenzhen Jiashe, which are considered as material associates of
the Group, are accounted for using the equity method.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-70 –


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The following table illustrates the summarised financial information in respect of Xiamen Haisheng adjusted for any
differences in accounting policies and reconciled to the carrying amount in the consolidated financial statements:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current assets 292,911 400,868 318,334
Non-current assets 25,894 27,499 29,613
Current liabilities (202,906) (306,460) (219,561)
Net assets 115,899 121,907 128,386
Reconciliation to the Group’s interest in the
associate:
Proportion of the Group’s ownership 37% 37% 37%
Group’s share of net assets of the associate 42,883 45,106 47,505
Goodwill on acquisition 5,865 5,865 5,865
Carrying amount of the investment 48,748 50,971 53,370
Revenue 122,428 241,209 295,083
(Loss)/profit for the year (20,395) 6,008 10,082
Total comprehensive income for the year (20,395) 6,008 10,082
The following table illustrates the summarised financial information in respect of Tianjin Masterwork adjusted for any
differences in accounting policies and reconciled to the carrying amount in the consolidated financial statements:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current assets 41,017 24,504 19,956
Non-current assets 14,181 11,974 14,133
Current liabilities (7,341) (8,506) (10,733)
Non-current liabilities (11,150) (9,739) (5,318)
Net assets 36,707 18,233 18,038
Reconciliation to the Group’s interest in the
associate:
Proportion of the Group’s ownership 40% 40% 40%
Group’s share of net assets of the associate 14,683 7,293 7,215
Carrying amount of the investment 14,683 7,293 7,215
Revenue 28,287 22,442 21,392
Profit/(loss) for the year 4,230 1,531 (194)
Total comprehensive income for the year 4,230 1,531 (194)
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-71 –


--- page 523 ---
The following table illustrates the summarised financial information in respect of Fujian Strait adjusted for any differences
in accounting policies and reconciled to the carrying amount in the consolidated financial statements:
As at 31 December
2023 2024
RMB’000 RMB’000
Current assets 20,603 19,748
Non-current assets 5,226 5,226
Current liabilities (925) (647)
Net assets 24,904 24,327
Reconciliation to the Group’s interest in the associate: Proportion of the
Group’s ownership 49% 49%
Group’s share of net assets of the associate 12,203 11,920
Goodwill on acquisition 156 156
Carrying amount of the investment 12,359 12,076
Revenue 2,293 3,918
Profit/(loss) for the year 10 (578)
Total comprehensive income for the year 10 (578)
The following table illustrates the summarised financial information in respect of Shenzhen Jiashe adjusted for any
differences in accounting policies and reconciled to the carrying amount in the consolidated financial statements:
As
at 31 December
2024
RMB’000
Current assets 79,429
Non-current assets 78,802
Current liabilities (15,504)
Net assets 142,727
Reconciliation to the Group’s interest in the associate: Proportion of the Group’s ownership 20%
Group’s share of net assets of the associate 28,545
Goodwill on acquisition 2,538
Carrying amount of the investment 31,083
Revenue 97,226
Profit for the year 10,622
Other comprehensive income 527
Total comprehensive income for the year 11,149
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-72 –


--- page 524 ---
The following table illustrates the summarised financial information of the Group’s associates that are not individually
material to the Group:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Share of the associates’ loss for the year (438) (986) (730)
Share of the associates’ total comprehensive
income (438) (986) (730)
Aggregate carrying amount of the Group’s
investments in the associates 4,384 11,816 3,733
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Share of net assets 42,883 59,298 60,930
Goodwill on acquisition 5,865 6,021 6,021
48,748 65,319 66,951
The Company’s trade payable balances with the associates are disclosed in note 43 to the Historical Financial Information.
Particulars of the Company’s material associates are as follows:
Name
Particulars of
issued shares held
Place of
registration and
business
Percentage of ownership interest
attributable to the Company Principal activities
As at 31 December
2022 2023 2024
Xiamen Haisheng Rongchuang
Information Technology Co.,
Ltd.(“ Xiamen Haisheng ”)
Ordinary shares PRC/Mainland China 37% 37% 37% Information technology
services
Fujian Strait Copyright
Operation Co., Ltd. (“ Fujian
Strait ”)
Ordinary shares PRC/Mainland China – 49% 49% Copyright and
intellectual property
services
The equity investments in Xiamen Haisheng and Fujian Strait are held by the Company, and accounted for using equity
method.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-73 –


--- page 525 ---
The following table illustrates the summarised financial information in respect of Xiamen Haisheng adjusted for any
differences in accounting policies and reconciled to the carrying amount in the financial statements of the Company:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current assets 292,911 400,868 318,334
Non-current assets 25,894 27,499 29,613
Current liabilities (202,906) (306,460) (219,561)
Net assets 115,899 121,907 128,386
Reconciliation to the Company’s interest in the
associate:
Proportion of the Company’s ownership 37% 37% 37%
Company’s share of net assets of the associate 42,883 45,106 47,505
Goodwill on acquisition 5,865 5,865 5,865
Carrying amount of the investment 48,748 50,971 53,370
Revenue 122,428 241,209 295,083
(Loss)/profit for the year (20,395) 6,008 10,082
Total comprehensive income for the year (20,395) 6,008 10,082
The following table illustrates the summarised financial information in respect of Fujian Strait adjusted for any differences
in accounting policies and reconciled to the carrying amount in the financial statements of the Company:
As at 31 December
2023 2024
RMB’000 RMB’000
Current assets 20,603 19,748
Non-current assets 5,226 5,226
Current liabilities (925) (647)
Net assets 24,904 24,327
Reconciliation to the Company’s interest in the associate:
Proportion of the Company’s ownership 49% 49%
Company’s share of net assets of the associate 12,203 11,920
Goodwill on acquisition 156 156
Carrying amount of the investment 12,359 12,076
Revenue 2,293 3,918
Profit/(loss) for the year 10 (578)
Total comprehensive income for the year 10 (578)
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-74 –


--- page 526 ---
The following table illustrates the summarised financial information of the Company’s associates that are not individually
material to the Company:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Share of the associates’ loss for the year – (111) (484)
Share of the associates’ total comprehensive
income – (111) (484)
Aggregate carrying amount of the Company’s
investments in the associates – 1,989 1,505
19. INVESTMENTS IN SUBSIDIARIES
Company
At the end of Relevant Periods, the Company’s investments in subsidiaries were as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Xiamen Giikin 166,500 166,500 166,500
Anhui Jihong 80,637 80,637 80,637
Hohhot Jihong 50,000 50,000 50,000
Langfang Jihong 50,000 120,000 120,000
Ningxia Jihong 50,000 50,000 50,000
Xiamen Jihong 50,000 50,000 50,000
Hangzhou Jimiaoyun 27,500 28,111 28,344
Shaanxi Y ongxin* 27,305 27,305 –
Luanzhou Jihong 12,000 12,000 12,000
Others 184,596 230,289 242,513
698,538 814,842 799,994
* On 14 May 2024, the Company deregistrated Shaanxi Y ongxin.
20. EQUITY INVESTMENTS DESIGNATED AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE INCOME
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Equity investments designated at fair value
through other comprehensive income
Unlisted equity investments, at fair value 18,500 19,500 8,254
The above equity investments were irrevocably designated at fair value through other comprehensive income as the Group
considers these investments to be strategic in nature.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-75 –


--- page 527 ---
21. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Other unlisted investments, at fair value – – 130,863
The above unlisted investments were investments issued by private equity fund in Hong Kong, China. They were
mandatorily classified as financial assets at fair value through profit or loss as their contractual cash flows are not solely payments
of principal and interest.
As of 31 December 2024, the private equity fund was still in the fundraising stage and had not yet made external
investments. The management believe that the fair value of the other unlisted investments as of 31 December 2024 was similar to
the investment cost.
22. OTHER NON-CURRENT ASSETS
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments for property, plant and equipment 994 12,593 1,188
23. INVENTORIES
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Raw materials 181,032 171,160 160,553
Work in progress 20,750 29,666 28,320
Finished goods 289,999 273,179 271,470
Others 967 189 448
492,748 474,194 460,791
Impairment allowance (9,079) (18,118) (12,902)
483,669 456,076 447,889
The movements for impairment of inventories are as follows:
As at
1 January
2022
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2022
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of raw materials – 1,932 – – 1,932
Impairment of finished goods 4,074 6,569 25 (3,521) 7,147
4,074 8,501 25 (3,521) 9,079
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-76 –


--- page 528 ---
As at
1 January
2023
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2023
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of raw materials 1,932 5,084 – (1,548) 5,468
Impairment of work in progress – 324 – – 324
Impairment of finished goods 7,147 14,056 141 (9,018) 12,326
9,079 19,464 141 (10,566) 18,118
As at
1 January
2024
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of raw materials 5,468 (1,640) – – 3,828
Impairment of work in progress 324 414 – – 738
Impairment of finished goods 12,326 10,765 81 (14,836) 8,336
18,118 9,539 81 (14,836) 12,902
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Raw materials 12,043 4,120 4,604
Work in progress 1,804 864 638
Finished goods 5,620 8,426 13,442
19,467 13,410 18,684
Impairment allowance (439) (1,849) (1,730)
19,028 11,561 16,954
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-77 –


--- page 529 ---
The movements for impairment of inventories are as follows:
As at
1 January
2022
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2022
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of finished goods – 439 – – 439
As at
1 January
2023
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2023
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of raw materials – 1,465 – – 1,465
Impairment of work in progress –1––1
Impairment of finished goods 439 (56) – – 383
439 1,410 – – 1,849
As at
1 January
2024
Accrual/
(Reversal) Exchange loss Write off
As at
31 December
2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Impairment of raw materials 1,465 (257) – – 1,208
Impairment of work in progress 1 171 – – 172
Impairment of finished goods 383 (33) – – 350
1,849 (119) – – 1,730
24. TRADE AND BILLS RECEIV ABLES
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Trade receivables 502,125 516,854 591,571
Impairment (30,149) (37,691) (42,681)
Trade receivables, net 471,976 479,163 548,890
Bills receivables 2,755 9,461 4,995
Trade and bills receivables 474,731 488,624 553,885
The bills receivables held by the Group were mostly issued by reputable banks and with short-term maturity. Accordingly,
the identified impairment loss was immaterial as at end of Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-78 –


--- page 530 ---
The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to minimise
credit risk. Overdue balances are reviewed regularly by senior management and credit limits attributed to customers are reviewed
annually. At the end of the Relevant Periods, the Group had certain concentrations of credit risk as 51.4%, 55.9% and 50.5% of the
Group’s trade receivables were due from the Group’s five largest customers, respectively. The Group had certain concentrations of
credit risk as 40.8%, 38.9% and 37.0% of the Group’s trade receivables were due from the Group’s largest customer.
An ageing analysis of the trade receivables of the Group as at the end of each of the Relevant Periods (based on the invoice
date) is as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within 1 year 485,201 496,322 569,614
1 to 2 years 12,821 7,875 5,595
2 to 3 years 828 11,028 4,038
3 to 4 years 2,134 283 10,926
4 to 5 years 160 1,190 206
Over 5 years 981 156 1,192
502,125 516,854 591,571
Impairment allowance (30,149) (37,691) (42,681)
471,976 479,163 548,890
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
At beginning of the year 25,290 30,149 37,691
Additions 12,658 8,915 7,229
Write-off (7,799) (1,373) (2,239)
At end of the year 30,149 37,691 42,681
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The
provision rates are based on aging for groupings of various customer segments with similar loss patterns. The calculation reflects
the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the
reporting date about past events, current conditions and forecasts of future economic conditions.
The Group used simplified approach by establishing a provision matrix based on its historical credit loss experience and
considering the forward-looking factors in calculating ECLs for trade receivables. During the Relevant Periods, there was no
significant fluctuation for the overall expected credit loss rates, the Group adopted similar expected credit loss rate for
simplification purpose.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-79 –


--- page 531 ---
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix:
As at 31 December 2022
Expected credit
loss rate
Gross carrying
amount
Expected credit
losses
(RMB’000) (RMB’000)
Within one year 5.00% 484,177 24,209
1 to 2 years 10.00% 11,733 1,173
2 to 3 years 20.00% 691 138
3 to 4 years 40.00% 1,386 555
4 to 5 years 60.00% 160 96
Over 5 years 100.00% 502 502
498,649 26,673
Individually assessed 100.00% 3,476 3,476
502,125 30,149
As at 31 December 2023
Expected credit
loss rate
Gross carrying
amount
Expected credit
losses
(RMB’000) (RMB’000)
Within one year 4.76% 496,322 23,647
1 to 2 years 10.00% 6,362 636
2 to 3 years 20.00% 667 133
3 to 4 years 40.00% 146 58
4 to 5 years 60.00% 350 210
Over 5 years 100.00% 156 156
504,003 24,840
Individually assessed 100.00% 12,851 12,851
516,854 37,691
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-80 –


--- page 532 ---
As at 31 December 2024
Expected credit
loss rate
Gross carrying
amount
Expected credit
losses
(RMB’000) (RMB’000)
Within one year 4.96% 569,614 28,230
1 to 2 years 10.00% 5,595 559
2 to 3 years 20.00% 2,526 505
3 to 4 years 40.00% 657 263
4 to 5 years 60.00% 137 82
Over 5 years 100.00% 383 383
578,912 30,022
Individually assessed 100.00% 12,659 12,659
591,571 42,681
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Trade receivables 35,571 42,023 40,353
Impairment allowance (2,917) (3,311) (3,243)
Trade receivables, net 32,654 38,712 37,110
Bills receivables – 135 –
Trade and bills receivables 32,654 38,847 37,110
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
At beginning of the year 4,303 2,917 3,311
(Reversal)/additions (890) 511 (62)
Write-off (496) (117) (6)
At end of the year 2,917 3,311 3,243
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-81 –


--- page 533 ---
25. PREPA YMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments 127,225 81,305 21,080
Deposits and other receivables 133,740 135,499 150,088
V alue-added tax recoverable 15,094 30,277 17,527
Prepaid income tax 3,063 2,501 2,059
Listing expense – 8,693 45,870
Others 818 607 296
279,940 258,882 236,920
Impairment allowance (80,011) (96,064) (95,046)
199,929 162,818 141,874
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments 549 2,481 815
Deposits and other receivables 92,270 90,804 90,807
Listing expense – 5,173 45,870
Others 252 1,424 2,120
93,071 99,882 139,612
Impairment allowance (72,166) (89,489) (89,175)
20,905 10,393 50,437
The balances are not secured by collateral and expected credit loss rate was minimal except for the other receivables
related to disposal of a subsidiary amounting to RMB89,082,000, pledged by the equity interest of that disposed entity, that the
Group has individually assessed the collectability of such receivable, and provided the impairment of RMB71,266,000,
RMB89,082,000 and RMB89,082,000 as at the end of the Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-82 –


--- page 534 ---
26. CASH AND CASH EQUIV ALENTS, PLEDGED DEPOSITS AND TIME DEPOSITS
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current
Cash and cash equivalents 852,071 1,062,110 711,062
Time deposits with original maturities
between three months to one year 1,018 43,231 50,169
Pledged deposits 94,971 41,390 67,971
948,060 1,146,731 829,202
Non-current
Time deposits with original maturities over one
year – 52,055 133,791
Pledged deposits 35,000 15,000 –
35,000 67,055 133,791
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Cash and cash equivalents, pledged deposits and
time deposits
Denominated in
– RMB 574,832 771,105 682,440
– USD 332,144 298,005 131,560
– EUR 1,833 15,523 32,551
– HKD 13,176 12,729 6,883
– JPY 53,459 100,198 86,084
– Others 7,616 16,226 23,475
983,060 1,213,786 962,993
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-83 –


--- page 535 ---
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current
Cash and cash equivalents 157,177 147,425 100,495
Pledged deposits 69,844 20,000 12,191
227,021 167,425 112,686
Non-current
Pledged deposits 20,000 – –
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Cash and cash equivalents, pledged
deposits and time deposits
Denominated in
– RMB 193,717 122,181 94,285
– USD 50,330 44,900 18,293
– Others 2,974 344 108
247,021 167,425 112,686
The RMB is not freely convertible into other currencies, however, under Mainland China’s Foreign Exchange
Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is
permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.
The bank balances are deposited with creditworthy banks with no recent history of default.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-84 –


--- page 536 ---
27. TRADE AND BILLS PA Y ABLES
An ageing analysis of the trade and bills payables as at the end of each of the Relevant Periods, based on the invoice date,
is as follows:
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within 1 year 498,008 627,080 695,430
1 to 2 years 10,162 8,205 12,916
2 to 3 years 1,397 1,296 3,950
Over 3 years 2,933 3,939 4,264
512,500 640,520 716,560
Trade payables are non-interest-bearing and normally settled on terms of within 30 to 60 days.
In 2024 August, the Group entered into supplier finance arrangements with Ping An Bank Co., Ltd. (“ Ping An Bank ”) and
Agricultural Bank of China Limited (“ Agricultural Bank ”), together as the “discounting banks”. Pursuant to the agreements,
Ping An Bank provided discounting the bill receivables of the Group’s suppliers without credit limit. Agricultural Bank provided a
total credit limit up to RMB50 million for discounting the bill receivables of the Group’s suppliers.
Under these supplier finance arrangements, the Group’s suppliers can elect to have their undue bill receivables from the
Group discounted by the discounting banks. Upon the Group’s approval, the discounting banks will pay the suppliers directly for
the discounted receivables. The Group will subsequently make payments to the discounting banks to settle the discounted bill
receivables. The term of the above supplier finance arrangements is usually not more than 6 months.
From the perspective of the Group, the supplier finance arrangements effect a non-cash movement from payables to
suppliers to payables to the discounting banks. As at 31 December 2024, Ping An Bank and Agricultural Bank had paid
discounting financing funds amounting to RMB32,599,000 and RMB49,903,000, respectively.
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within 1 year 176,113 45,546 47,590
1 to 2 years 392 64 483
2 to 3 years 129 198 64
Over 3 years 1,352 1,481 1,539
177,986 47,289 49,676
At the end of the Relevant Periods, certain of the Group’s pledged deposits, buildings and right-of use assets were pledged
to secure bank facilities granted to the Group for borrowings and bills payables (note 30).
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-85 –


--- page 537 ---
28. OTHER PA Y ABLES AND ACCRUALS
Group
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Payroll and welfare payables 61,230 74,738 94,319
Repurchase obligation for restricted shares
(note 36) – 62,766 47,101
Deposits and other payable 35,909 43,592 31,336
Others 18,303 7,253 8,565
115,442 188,349 181,321
Other payables are non-interest-bearing and have no fixed terms of settlement, except for repurchase obligation for
restricted shares which will be settled according to the vesting schedules.
Company
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Payroll and welfare payables 7,340 6,066 6,021
Repurchase obligation for restricted shares
(note 36) – 62,766 47,101
Deposits and other payable 10,204 460 3,445
Others 3,122 559 1,111
20,666 69,851 57,678
29. CONTRACT LIABILITIES
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Sale of products/services 12,949 14,829 17,858
Contract liabilities include advances received to deliver goods and services. The changes in contract liabilities during the
Relevant Periods were mainly due to the changes in advances received from customers.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 538 ---
30. INTEREST-BEARING BANK BORROWINGS
Group
As at 31 December
2022 2023 2024
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Current
Bank loans – secured 1.58%-3.85% 2023 234,348 2.85%-3.30% 2024 55,919 2.55%-3.15% 2025 29,522
Bank loans – unsecured 2.80%-3.50% 2023 61,087 2.85%-3.30% 2024 40,035 2.40%-2.55% 2025 79,054
Current portion of long-term bank
loans – secured – – – 2.55%-3.00% 2024 6,879 2.55%-3.50% 2025 4,543
Current portion of long-term bank
loans – unsecured 4.00% 2023 209 4.00% 2024 209 4.00% 2025 8,007
295,644 103,042 121,126
Non-current
Bank loans – secured 3.50% 2027 8,349 2.55%-3.50% 2025-2027 147,575 2.55%-3.50% 2026-2027 127,067
Bank loans – unsecured 4.00% 2025 8,200 4.00% 2025 8,000 – – –
16,549 155,575 127,067
Company
As at 31 December
2022 2023 2024
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Current
Bank loans – secured 3.50% 2023 65,070 ––––––
Bank loans – unsecured 2.80%-3.50% 2023 61,087 2.80%-2.85% 2024 40,035 2.40%-2.55% 2025 79,054
Current portion of long-term bank
loans – secured 4.00% 2023 190 2.55%-3.00% 2024 375 2.55%-2.60% 2025 250
Current portion of long-term bank
loans – unsecured 4.00% 2023 10 4.00% 2024 209 4.00% 2025 8,007
126,357 40,619 87,311
Non-current
Bank loans – secured – – – 2.55%-3.00% 2025-2026 89,600 2.55%-2.60% 2026 59,550
Bank loans – unsecured 4.00% 2025 8,209 4.00% 2025 8,000 – – –
8,209 97,600 59,550
• Certain of the Group’s buildings with net carrying amount of approximately RMB35,657,000, RMB33,866,000 and
RMB32,076,000 as at the end of Relevant Periods, respectively, were pledged to secure bank facilities granted to the
Group for borrowings and bills payables.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 539 ---
• Certain of the Group’s land use rights with a net carrying amount of approximately RMB37,433,000,
RMB30,581,000 and RMB29,902,000 as at the end of Relevant Periods, respectively, were pledged to secure bank
facilities granted to the Group for borrowings and bills payables.
• As at the end of Relevant Periods, the Group’s interest-bearing bank borrowings of RMB127,719,000,
RMB180,348,000 and RMB161,133,000, respectively, were jointly guaranteed by the Company and its subsidiaries
of the Group.
31. DEFERRED INCOME
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Government grants 32,387 34,023 30,945
The Group received government grants related to capital expenditure incurred for property, plant and equipment. The
amounts are deferred and amortised over the estimated useful lives of the respective assets.
32. DEFERRED TAX
Group
Deferred tax assets
Impairment
of assets
Deferred
income and
accruals
Unrealised
profits from
intercompany
transactions
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 7,308 2,682 – 14,976 24,966
Deferred tax (charged)/credited to
the consolidated statements of
profit or loss during the year (1,042) 570 991 2,572 3,091
Gross deferred tax assets at 31
December 2022 6,266 3,252 991 17,548 28,057
Deferred tax credited/(charged) to
the consolidated statements of
profit or loss during the year 1,953 413 392 (2,837) (79)
Gross deferred tax assets at 31
December 2023 8,219 3,665 1,383 14,711 27,978
Deferred tax charged to the
consolidated statements of
profit or loss during the year (398) (66) (740) (2,218) (3,422)
Gross deferred tax assets at 31
December 2024 7,821 3,599 643 12,493 24,556
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 540 ---
Deferred tax liabilities
Fair value
adjustment
arising from
acquisitions
Right-of-use
assets
Super
deduction of
fixed assets Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 3,907 15,336 – 19,243
Deferred tax (credited)/charged to the
consolidated statements of profit or loss
during the year (235) 2,200 757 2,722
Gross deferred tax liabilities at 31
December 2022 3,672 17,536 757 21,965
Deferred tax (credited)/charged to the
consolidated statements of profit or loss
during the year (851) (1,669) 50 (2,470)
Gross deferred tax liabilities at 31
December 2023 2,821 15,867 807 19,495
Deferred tax credited to the consolidated
statements of profit or loss during the
year (322) (2,961) (88) (3,371)
Gross deferred tax liabilities at 31
December 2024 2,499 12,906 719 16,124
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of financial position.
The following is an analysis of the deferred tax balances of the Group for financial reporting purposes:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Deferred tax assets 13,526 12,231 11,147
Deferred tax liabilities 7,434 3,747 2,715
The Group has tax losses arising in Hong Kong of RMB6,040,000, RMB17,047,000 and RMB47,036,000 for the Relevant
Periods, respectively, that are available indefinitely for offsetting against future taxable profits of the companies in which the
losses arose.
The Group also has tax losses arising in Mainland China of RMB302,758,000, RMB377,802,000 and RMB419,221,000 for
the Relevant Periods, respectively, that will expire in one to ten years for offsetting against future taxable profits.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-89 –


--- page 541 ---
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Deductible temporary differences 93,539 111,414 107,581
Tax losses 308,798 394,849 466,257
402,337 506,263 573,838
Deferred tax assets have not been recognised in respect of these losses as they have arisen in the Company and subsidiaries
that have been loss-making for some time and it is not considered probable that taxable profits will be available against which the
tax losses can be utilised.
Company
Deferred tax assets
Impairment
of assets
Deferred
income and
accruals
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 2,703 811 – 3,514
Deferred tax (charged)/credited to the
statements of profit or loss of the
Company during the year (2,703) (811) 4,266 752
Gross deferred tax assets at 31 December
2022 – – 4,266 4,266
Deferred tax charged to the statements of
profit or loss of the Company during the
year – – (1,233) (1,233)
Gross deferred tax assets at 31 December
2023 – – 3,033 3,033
Deferred tax credited to the statements of
profit or loss of the Company during the
year – – 525 525
Gross deferred tax assets at 31 December
2024 – – 3,558 3,558
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 542 ---
Deferred tax liabilities
Right-of-use
assets
RMB’000
At 1 January 2022 –
Deferred tax charged to the statements of profit or loss of the Company during the year 4,243
Gross deferred tax liabilities at 31 December 2022 4,243
Deferred tax charged to the statements of profit or loss of the Company during the year 230
Gross deferred tax liabilities at 31 December 2023 4,473
Deferred tax credited to the statements of profit or loss of the Company during the year (503)
Gross deferred tax liabilities at 31 December 2024 3,970
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of financial position.
The following is an analysis of the deferred tax balances of the Company for financial reporting purposes:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Deferred tax assets 23 – –
Deferred tax liabilities – 1,440 412
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Deductible temporary differences 84,096 102,441 102,370
Tax losses 65,179 62,268 83,928
149,275 164,709 186,298
Deferred tax assets have not been recognised in respect of these losses as they have arisen in the Company that have been
loss-making for some time and it is not considered probable that taxable profits will be available against which the tax losses can
be utilised.
APPENDIX IA ACCOUNTANTS’ REPORT
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33. SHARE CAPITAL
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Issued and fully paid: ordinary shares 378,409 385,009 384,769
A summary of movements in the Company’s share capital is as follows:
Number of shares Share capital
RMB’000
At 1 January 2022 387,480,088 387,480
Cancellation of restricted shares granted under Share Incentive Plans (9,070,800) (9,071)
At 31 December 2022 378,409,288 378,409
Issuance of restricted shares granted under Share Incentive Plans 6,600,000 6,600
At 31 December 2023 385,009,288 385,009
Cancellation of restricted shares granted under Share Incentive Plans (240,000) (240)
At 31 December 2024 384,769,288 384,769
34. RESERVES
The amounts of the Group’s reserves and the movements therein are presented in the consolidated statements of changes in
equity in the Historical Financial Information.
(a) Statutory reserve
In accordance with the Company Law of the PRC, companies registered in the PRC are required to allocate 10% of
the statutory after tax profits to the statutory reserve until the cumulative total of the reserve reaches 50% registered
capital. Subject to approval from the relevant PRC authorities, the statutory reserve may be used to offset any accumulated
losses or increase the registered capital of the companies. The statutory reserve is not available for dividend distribution to
equity holders of the PRC subsidiaries.
(b) Share award reserve
The share award reserve comprises the fair value of equity-settled share-based payment expenses, as further
explained in note 36.
(c) Capital reserve
The capital reserve mainly arose from (i) the capital contributions from the then equity holders of the Group’s
subsidiaries, after elimination of investments in subsidiaries; and (ii) the acquisition of non-controlling interest of the
Group’s subsidiaries. Details of the movement in capital reserve are set out in the consolidated statements of changes in
equity of the Historical Financial Information.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 544 ---
(d) Other comprehensive income
The other comprehensive reserve mainly represented exchange fluctuation reserve, which is used to record exchange
differences arising from the translation of the financial information of entities of which the functional currency is not
RMB.
(e) Treasury Shares
Number of shares Treasury shares
RMB’000
At 1 January 2022 15,146,107 279,076
Settlement of shares repurchased (i) (9,070,800) (117,558)
Grant of restricted shares (note 36) (6,075,307) (161,518)
At 31 December 2022 – –
Repurchase obligation for restricted shares (i) 6,600,000 62,766
Repurchase of shares (ii) 470,900 10,088
At 31 December 2023 7,070,900 72,854
Repurchase of shares (ii) 5,554,800 75,945
Repurchase obligation for restricted shares (i) (643,408) (12,635)
At 31 December 2024 11,982,292 136,164
(i) On 25 June 2021, the Company awarded 9,070,800 restricted shares to employees at the vest price of
RMB12.96 per share under Share Incentive Plans, with the consideration of RMB117,558,000. According to
the Share Incentive Plan, the Company had obligations to repurchase these restricted shares if the
performance conditions were not meet. Therefore, the Company recognised the repurchase obligation
amounting to RMB117,558,000.
As it was expected that the performance target under above grant would not be able to satisfied, on 27
January 2022, the Board of Directors approved the cancellation of such awards, and the outstanding restricted
shares were repurchased in March 2022 and cancelled in April 2022.
On 25 September 2023, the Company awarded 6,600,000 restricted shares to employees at the vest price of
RMB9.51 per share under Share Incentive Plans, with the consideration of RMB62,766,000. Accordingly, the
Company recognised the repurchase obligation with the same amount.
During 2024, part of repurchase obligations were reversed upon the vesting or cancellation of restricted
shares incentives.
(ii) The Company repurchased shares for future Share Incentive Plans through centralized price bidding by
self-owned funds, which were recognised as treasury shares as at the end of Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 545 ---
(f) Reserve movement of the Company
Y ear ended 31 December 2022
Treasury
shares
Share
premium
Share award
reserve
Statutory
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2022 (279,076) 480,279 – 69,895 422,688 693,786
Loss for the year –––– (59,809) (59,809)
Total comprehensive
income for the year –––– (59,809) (59,809)
Cancellation of shares
repurchased – (108,487) – – – (108,487)
Equity-settled share-based
payment expenses – – 3,126 – – 3,126
Settlement of repurchase
obligation for restricted
shares 117,558 –––– 117,558
Restricted shares granted
under Share Incentive
Plans 161,518 (122,029) – – – 39,489
As at 31 December 2022 – 249,763 3,126 69,895 362,879 685,663
Y ear ended 31 December 2023
Treasury
shares
Share
premium
Share award
reserve
Statutory
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 – 249,763 3,126 69,895 362,879 685,663
Profit for the year –––– 88,491 88,491
Total comprehensive income
for the year –––– 88,491 88,491
Restricted shares granted
under Share Incentive
Plans – 56,16 6––– 56,166
Equity-settled share-based
payment expenses – – 26,379 – – 26,379
Repurchase obligation for
restricted shares (62,766) –––– (62,766)
Shares repurchased for Share
Incentive Plans (10,088) –––– (10,088)
Restricted shares vested – 10,504 (10,504) – – –
Dividends declared –––– (175,204) (175,204)
Transfer from retained
profits – – – 8,849 (8,849) –
As at 31 December 2023 (72,854) 316,433 19,001 78,744 267,317 608,641
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-94 –


--- page 546 ---
Y ear ended 31 December 2024
Treasury
shares
Share
premium
Share award
reserve
Statutory
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2024 (72,854) 316,433 19,001 78,744 267,317 608,641
Profit for the year –––– 173,753 173,753
Total comprehensive income
for the year –––– 173,753 173,753
Equity-settled share-based
payment expenses – – 17,332 – – 17,332
Cancellation of shares
repurchased 2,282 (2,042) – – – 240
Repurchase obligation for
restricted shares 10,353 29,470 (29,470) – – 10,353
Shares repurchased for Share
Incentive Plans (75,945) –––– (75,945)
Dividends declared –––– (201,882) (201,882)
Transfer from retained
profits – – – 17,375 (17,375) –
As at 31 December 2024 (136,164) 343,861 6,863 96,119 221,813 532,492
35. PARTLY-OWNED SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS
Details of the Group’s subsidiaries that have material non-controlling interests are set out below:
31 December 2022
Percentage of
equity interest
held by non-
controlling
interests
Profit/(loss) for
the year
allocated to
non- controlling
interests
Dividends paid
to non-
controlling
interests
Accumulated
balances of
non-controlling
interests at the
end of 31
December 2022
RMB’000 RMB’000 RMB’000
Luanzhou Jihong 40.00% 2,664 – 37,085
Hangzhou Jimiaoyun 45.00% (8,969) – (33,334)
Shaanxi Y ongxin 49.00% (4,357) – 25,002
Ganzhou Gujiao Wine Industry
Development Co., Ltd. (“ Ganzhou
Gujiao ”) 30.00% (2,288) – 12,111
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-95 –


--- page 547 ---
The following tables illustrate the summarised financial information of the above subsidiaries. The amounts disclosed are
before any inter-company eliminations:
Luanzhou
Jihong
Hangzhou
Jimiaoyun
Shaanxi
Y ongxin
Ganzhou
Gujiao
RMB’000 RMB’000 RMB’000 RMB’000
Revenue 134,446 1,613 178,044 25,335
Total expenses (127,653) (21,544) (186,936) (32,963)
Profit/(loss) for the year 6,793 (19,931) (8,892) (7,628)
Total comprehensive income for the year 6,793 (19,960) (8,892) (7,628)
Current assets 91,775 3,541 55,678 154,763
Non-current assets 22,944 1,638 26,105 1,743
Current liabilities 18,534 51,755 30,195 116,136
Non-current liabilities 3,638 – 1,129 –
Net cash flows from/(used in) operating
activities 14,698 (61,343) (1,128) 15,042
Net cash flows used in investing activities (868) (295) – (2,043)
Net cash flows (used in)/from financing
activities (14,301) 58,050 (258) (8,300)
Net (decrease)/increase in cash and cash
equivalents (471) (3,588) (1,386) 4,699
31 December 2023
Percentage of
equity interest
held by non-
controlling
interests
Profit/ (loss) for
the year
allocated to
non- controlling
interests at
Dividends paid
to non-
controlling
interests
Accumulated
balances of
non-controlling
interests the
end of 31
December 2023
RMB’000 RMB’000 RMB’000
Luanzhou Jihong 40% 4,207 – 41,292
Hangzhou Jimiaoyun 45% (7,603) – (40,937)
Shaanxi Y ongxin 49% (1,835) – 23,167
Ganzhou Gujiao 30% (2,655) – 9,456
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-96 –


--- page 548 ---
The following tables illustrate the summarised financial information of the above subsidiaries. The amounts disclosed are
before any inter-company eliminations:
Luanzhou
Jihong
Hangzhou
Jimiaoyun
Shaanxi
Y ongxin
Ganzhou
Gujiao
RMB’000 RMB’000 RMB’000 RMB’000
Revenue 138,030 4,185 178 9,526
Total expenses (127,513) (21,081) (3,923) (18,377)
Profit/(loss) for the year 10,517 (16,896) (3,745) (8,851)
Total comprehensive income for the year 10,517 (16,896) (3,745) (8,851)
Current assets 105,441 5,548 43,781 141,956
Non-current assets 21,587 7,550 592 2,288
Current liabilities 22,949 70,402 37 111,731
Non-current liabilities 1,056 4,590 148 –
Net cash flows from/(used in) operating
activities 23,686 (10,706) 45,508 11,921
Net cash flows used in investing activities (3,794) (431) – –
Net cash flows (used in)/from financing
activities (19,473) 11,850 (5,000) (11,700)
Net increase in cash and cash equivalents 419 713 40,508 221
31 December 2024
Percentage of
equity interest
held by non-
controlling
interests
Profit/(loss) for
the year
allocated to
non-controlling
interests
Dividends paid
to non-
controlling
interests
Accumulated
balances of
non-controlling
interests at the
end of 31
December 2024
RMB’000 RMB’000 RMB’000
Luanzhou Jihong 40% 2,044 – 43,336
Hangzhou Jimiaoyun 45% (5,166) – (46,103)
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-97 –


--- page 549 ---
The following tables illustrate the summarised financial information of the above subsidiaries. The amounts disclosed are
before any inter-company eliminations:
Luanzhou
Jihong
Hangzhou
Jimiaoyun
RMB’000 RMB’000
Revenue 93,349 22,373
Total expenses (88,240) (33,854)
Profit/(loss) for the year 5,109 (11,481)
Total comprehensive income for the year 5,109 (11,481)
Current assets 106,904 3,363
Non-current assets 19,299 255
Current liabilities 18,070 75,060
Non-current liabilities –2
Net cash flows from/(used in) operating activities 3,599 (1,242)
Net cash flows (used in)/from investing activities (29,348) 497
Net cash flows from financing activities 69,588 4,237
Net decrease in cash and cash equivalents 43,839 3,492
36. SHARE BASED PA YMENTS
During the Relevant Periods, the Company has conducted a series of restricted shares incentive plans (“ Share Incentive
Plans ”) to eligible management and employees of the Group. Under the Share Incentive Plans, participants can exercise the shares
when certain criteria fulfilled.
The restricted shares granted are subject to specific lock-up periods and with service and/or performance conditions
vesting conditions which are determined by the Board of Directors. Evaluations are made as of each reporting period to assess the
likelihood of vesting conditions being met. Share-based compensation expenses are then adjusted to reflect the revision of
original estimates.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-98 –


--- page 550 ---
The following equity-settled share based payment was outstanding under the Share Incentive Plans during the Relevant
Periods:
Number of
restricted shares
Weighted average
grant day fair
value per
restricted share
(RMB)
At 1 January 2022 9,070,800 14.82
Granted 6,075,307 4.94
Cancelled (9,070,800) 14.82
At 31 December 2022 6,075,307 4.94
At 1 January 2023 6,075,307 4.94
Granted 6,600,000 8.52
V ested (2,126,300) 4.94
At 31 December 2023 10,549,007 7.18
At 1 January 2024 10,549,007 7.18
V ested (4,352,415) 6.77
Forfeited (4,288,592) 7.00
At 31 December 2024 1,908,000 8.52
The weighted-average remaining contract lives for outstanding restricted shares granted under Share Incentive Plans were
1.77, 1.53 and 1.73 years as at the end of Relevant Periods.
The fair value of the awarded shares was calculated based on the market price of the Company’s shares at the respective
grant date.
The total expenses recognised in the consolidated statements of profit or loss for restricted shares granted to the Group’s
management and employees under all share schemes were RMB3,126,000, RMB26,379,000 and RMB17,332,000 for the Relevant
Periods, respectively.
As at the end of the Relevant Periods, the Group recognised the repurchase obligation in relation to restricted shares
granted amounting to nil, RMB62,766,000 and RMB47,101,000, respectively.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-99 –


--- page 551 ---
37. BUSINESS COMBINATIONS
During the Relevant Periods, the Group held the following significant business combination:
Acquisition of SENADA BIKES
To establish and expand the product with its own brand in the e-commerce business, on 1 July 2022, the Group
through its subsidiary acquired a business (“ SENADA BIKES ”) at a consideration of RMB22,349,000.
The fair values of the identifiable assets of SENADA BIKES as at the date of acquisition were as follows:
Fair value
recognised on
acquisition
RMB’000
Non-current assets 5,159
Other current assets 1,031
Inventories 8,239
Total assets 14,429
Total identifiable net assets at fair value 14,429
Goodwill 7,920
22,349
Satisfied by:
Cash 22,349
An analysis of the cash flows in respect of the acquisition of SENADA BIKES is as follows:
RMB’000
Cash consideration paid in the year (22,349)
Net outflow of cash and cash equivalents included in cash flows from investing activities (22,349)
Since the acquisition, SENADA BIKES contributed RMB16,130,000 to the Group’s revenue and caused a loss of
RMB1,456,000 to the consolidated profit for the year ended 31 December 2022. Had the combination taken place at the
beginning of the year, the revenue of the Group and the profit of the Group for the year would have been
RMB5,387,598,000 and RMB173,111,000, respectively.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-100 –


--- page 552 ---
38. DISPOSAL OF SUBSIDIARIES
(a) Disposal of subsidiaries
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Net assets disposed of:
Cash and cash equivalents 104 5,232 958
Other current assets 3,282 3,341 15,038
Other non-current assets 46 1,142 87
Other current liabilities (1,421) (9,567) (13,020)
Other non-current liabilities – (653) −
Subtotal 2,011 (505) 3,063
Non-controlling interests − − (1,470)
Net assets attributable to the Group
disposed of: 2,011 (505) 1,593
Gain/(loss) on disposal of subsidiaries 56 515 (553)
Total consideration 2,067 10 1,040
Satisfied by:
Cash 1,034 10 1,040
An analysis of the net inflow/(outflow) of cash and cash equivalents in respect of the disposal of subsidiaries is as
follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Cash consideration 1,034 10 1,040
Cash and cash equivalents disposed of (104) (5,232) (958)
Net inflow/(outflow) of cash and
cash equivalents in respect of the
disposal of subsidiaries 930 (5,222) 82
(b) Deregistration of subsidiaries
On 14 May 2024, the Group deregistrated Shaanxi Y ongxin Paper Industry Packaging Co., Ltd. (“ Shaanxi
Y ongxin”). Before the deregistration, the Group’s direct equity interest in Shaanxi Y ongxin was 51%. Net outflow of cash
and cash equivalents in respect of the deregistration of Shannxi Y ongxin was RMB21,447,000.
During the year ended 31 December 2024, the Group deregistrated other six subsidiaries and no cashflow arose from
the deregistrations.
APPENDIX IA ACCOUNTANTS’ REPORT
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--- page 553 ---
39. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Changes in liabilities arising from financing activities
During the Relevant Periods, the Group had non-cash additions to right-of-use assets and lease liabilities of
RMB31,551,000, RMB50,109,000 and RMB34,440,000, respectively, in respect of lease arrangements for properties.
(b) Changes in liabilities arising from financing activities
Y ear ended 31 December 2022
Interest-bearing
bank borrowings Lease liabilities
RMB’000 RMB’000
At 1 January 2022 232,416 68,931
Changes from financing activities cash flows 65,965 (19,942)
New leases – 31,551
Accrual of interest 13,812 4,562
Termination of lease contracts – (7,664)
At 31 December 2022 312,193 77,438
Y ear ended 31 December 2023
Interest-bearing
bank borrowings Lease liabilities
RMB’000 RMB’000
At 1 January 2023 312,193 77,438
Changes from financing activities cash flows (60,453) (43,676)
New leases − 50,109
Accrual of interest 6,877 4,514
At 31 December 2023 258,617 88,385
Y ear ended 31 December 2024
Interest-bearing
bank borrowings Lease liabilities
RMB’000 RMB’000
At 1 January 2024 258,617 88,385
Changes from financing activities cash flows (16,507) (34,918)
New leases – 34,440
Termination of lease contracts – (8,614)
Accrual of interest 6,083 4,850
At 31 December 2024 248,193 84,143
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-102 –


--- page 554 ---
(c) Total cash outflow for leases
The total cash outflow for leases included in the consolidated statement of cash flows is as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within operating activities 2,633 5,261 3,215
Within financing activities 19,942 43,676 34,918
22,575 48,937 38,133
40. CONTINGENT LIABILITIES
As at the end of Relevant Periods, neither the Group nor the Company had any significant contingent liabilities.
41. PLEDGE OF ASSETS
Details of the Group’s assets pledged for the Group’s bank facilities are included in note 30 to the Historical Financial
Information.
42. COMMITMENTS
The Group had the following capital commitments at the end of Relevant Periods:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Contracted, but not provided for purchase of
property, plant and equipment 86,474 73,125 11,455
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-103 –


--- page 555 ---
43. RELATED PARTY TRANSACTIONS
The Group had the following transactions with related parties during the Relevant Periods:
(a) Transactions with related parties
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Sales of goods
Associates – 1,820 720
– 1,820 720
Purchases of products
Associates 3,957 4,926 3,701
3,957 4,926 3,701
Purchases of services
Associate – 679 1,619
– 679 1,619
The sales to the related parties and the purchases from the related parties were made according to the published
prices and conditions negotiated between the parties.
(b) Outstanding balances with related parties
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Amounts due to related parties
Associates 3,117 1,364 972
Amounts due from related parties
Associates – 1,453 1,243
The outstanding balances with related parties are all trade in nature.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-104 –


--- page 556 ---
(c) Compensation of key management personnel of the Group:
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Fees 346 400 798
Other emoluments:
Salaries, allowances and benefits in kind 4,292 5,403 10,393
Performance related bonuses 4,345 6,455 5,565
Equity-settled share-based payment
expenses 102 934 3,511
Pension scheme contributions 160 148 179
9,245 13,340 20,446
The Company had the following transactions with related parties during the Relevant Periods:
(a) Transactions with related parties
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Sales of goods
Associates – – 113
– – 113
Purchases of products
Associates 3,957 4,926 3,701
3,957 4,926 3,701
Purchases of services
Associate – 669 1,619
– 669 1,619
The sales to the related parties and the purchases from the related parties were made according to the published
prices and conditions negotiated between the parties.
(b) Outstanding balances with related parties
Y ear ended 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Amounts due to related parties
Associates 2,915 1,162 972
Amounts due from related parties
Associates – – 114
The outstanding balances with related parties are all trade in nature.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-105 –


--- page 557 ---
44. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments at the end of each of the Relevant Periods were as
follows:
As at 31 December 2022
Financial assets
Financial assets at
fair value through other
comprehensive income
Financial
assets at fair
value through
profit or loss
Financial
assets at
amortized
cost Total
Debt
investments
Equity
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at
fair value through other
comprehensive income – 18,500 – – 18,500
Pledged deposits – – – 129,971 129,971
Time deposits – – 1,018 – 1,018
Trade and bills receivables 23,755 – – 450,976 474,731
Financial assets included in
prepayments, other receivables
and other assets (note 25) – – – 54,547 54,547
Cash and cash equivalents – – – 852,071 852,071
23,755 18,500 1,018 1,487,565 1,530,838
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade and bills payables 512,500
Financial liabilities included in other payables and accruals (note 28) 35,909
Interest-bearing bank borrowings 312,193
Amounts due to related parties 3,117
863,719
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-106 –


--- page 558 ---
As at 31 December 2023
Financial assets
Financial assets at
fair value through other
comprehensive income
Financial
assets at fair
value through
profit or loss
Financial
assets at
amortized
cost Total
Debt
investments
Equity
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at
fair value through other
comprehensive income – 19,500 – – 19,500
Pledged deposits – – – 56,390 56,390
Time deposits – – 43,231 52,055 95,286
Trade and bills receivables 8,440 – – 480,184 488,624
Amounts due from related parties – – – 1,453 1,453
Financial assets included in
prepayments, other receivables
and other assets (note 25) – – – 39,435 39,435
Cash and cash equivalents – – – 1,062,110 1,062,110
8,440 19,500 43,231 1,691,627 1,762,798
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade and bills payables 640,520
Amounts due to related parties 1,364
Interest-bearing bank borrowings 258,617
Financial liabilities included in other payables and accruals (note 28) 106,358
1,006,859
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-107 –


--- page 559 ---
As at 31 December 2024
Financial assets
Financial assets at
fair value through other
comprehensive income
Financial
assets at fair
value through
profit or loss
Financial
assets at
amortized
cost Total
Debt
investments
Equity
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at
fair value through other
comprehensive income – 8,254 – – 8,254
Pledged deposits – – – 67,971 67,971
Time deposits – – 28,088 155,872 183,960
Financial assets at fair value
through profit or loss – – 130,863 – 130,863
Trade and bills receivables 4,204 – – 549,681 553,885
Amounts due from related parties – – – 1,243 1,243
Financial assets included in
prepayments, other receivables
and other assets (note 25) – – – 54,498 54,498
Cash and cash equivalents – – – 711,062 711,062
4,204 8,254 158,951 1,540,327 1,711,736
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade and bills payables 716,560
Financial liabilities included in other payables and accruals (note 28) 78,437
Interest-bearing bank borrowings 248,193
Amounts due to related parties 972
1,044,162
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-108 –


--- page 560 ---
45. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, time deposits, trade and bills receivables,
financial assets included in prepayments, other receivables and other assets, amounts due from related parties, amounts due to
related parties, trade and bill payables, current portion of interest-bearing bank borrowings and financial liabilities included in
other payables and accruals approximate to their carrying amounts largely due to the short-term maturities of these instruments.
Management measures the fair value of interest-bearing bank borrowings based on discounted cash flow method. The fair values
approximate to their carrying amounts.
The fair values of the non-current portion of pledged deposits and interest-bearing bank borrowings have been calculated
by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and
remaining maturities. The fair values approximate to their carrying amounts.
The unlisted investments in financial assets at fair value through profit or loss were investments issued by private equity
fund in Hong Kong. As at 31 December 2024, the private equity fund was in the fundraising stage and had not yet made
investments. The fair values approximate to their carrying amounts.
The Group’s finance department headed by the finance manager is responsible for determining the policies and procedures
for the fair value measurement of financial instruments. The Group’s finance manager reports directly to the financial director and
the audit committee. At each reporting date, the finance department analyses the movements in the values of financial instruments
and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the financial director. The
valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:
Assets measured at fair value:
Fair value measurement using
As at 31
December
2022
Quoted
prices in
active
markets
Significant
observable
inputs
Significant
unobservable
inputs
Level 1 Level 2 Level3
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables 23,755 – 23,755 –
Financial assets at fair value through profit or loss 1,018 1,018 – –
Equity investments designated at fair value
through other comprehensive income 18,500 – – 18,500
43,273 1,018 23,755 18,500
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-109 –


--- page 561 ---
Fair value measurement using
As at 31
December
2023
Quoted
prices in
active
markets
Significant
observable
inputs
Significant
unobservable
inputs
Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables 8,440 – 8,440 –
Financial assets at fair value through profit or loss 43,231 43,231 – –
Equity investments designated at fair value
through other comprehensive income 19,500 – – 19,500
71,171 43,231 8,440 19,500
Fair value measurement using
As at
31 December
2024
Quoted
prices in
active
markets
Significant
observable
inputs
Significant
unobservable
inputs
Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables 4,204 – 4,204 –
Financial assets at fair value through profit or loss 158,951 28,088 130,863 −
Equity investments designated at fair value
through other comprehensive income 8,254 – – 8,254
171,409 28,088 135,067 8,254
During the Relevant Periods, there were no transfers between Level 1 and Level 2 fair value measurements, and no
transfers into and out of Level 3 fair value measurements.
The fair values of equity investments designated at fair value through other comprehensive income has been
estimated using market method or discounted cash flow method. For trade and bills receivables measured at fair value
through other comprehensive income and time deposits measured at fair value through profit or loss due to interest linked
to some financial variables, the Group estimated their fair value by using a discounted cash flow method.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-110 –


--- page 562 ---
Set out below is a summary of significant unobservable inputs to the valuation of financial instrument together with
a quantitative sensitivity analysis as at the end of the Relevant Periods:
Valuation
technique
Significant
unobservable
input Range Sensitivity of fair value to the input
Investment A Market method One quarter
Enterprise value
(“EV”)/Sales
(“R”) multiple
of peers
31 December 2022: 0.10-0.11 5% increase/decrease in EV/R multiple
used would result in a difference in
fair value of RMB131,000
31 December 2023: 0.09-0.23 5% increase/decrease in EV/R multiple
used would result in a difference in
fair value of RMB141,000
Discount for lack
of marketability
31 December 2022:
19.00%-21.00%
5% increase/decrease in discount would
result in decrease/increase in fair
value by RMB48,000
31 December 2023:
19.00%-21.00%
5% increase/decrease in discount would
result in decrease/increase in fair
value by RMB49,000
Investment B Market method Median Enterprise
value (“ EV”)/
Sales (“ R”)
multiple of
peers
31 December 2023: 1.14-4.24 5% increase/decrease in EV/R multiple
used would result in a difference in
fair value of RMB313,000
31 December 2024: 1.38-4.35 5% increase/decrease in EV/R multiple
used would result in a difference in
fair value of RMB271,000
Discount for lack
of marketability
31 December 2023:
19.00%-21.00%
5% increase/decrease in discount would
result in decrease/increase in fair
value by RMB78,000
31 December 2024:
18.00%-20.00%
5% increase/decrease in discount would
result in decrease/increase in fair
value by RMB62,000
Investment C Discounted cash
flow method
Weighted Average
Cost of Capital
(“WAC C”)
31 December 2022:
14.15%-17.05%
5% increase/decrease in W ACC used
would result in a difference in fair
value of RMB386,000
31 December 2023:
16.21%-18.85%
5% increase/decrease in W ACC used
would result in a difference in fair
value of RMB365,000
Discount for lack
of marketability
31 December 2022:
21.38%-23.63%
5% increase/decrease in discount used
would result in a difference in fair
value of RMB101,000
31 December 2023:
20.43%-22.58%
5% increase/decrease in discount used
would result in a difference in fair
value of RMB92,000
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-111 –


--- page 563 ---
46. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank borrowings, lease liabilities, other liabilities,
cash and cash equivalents and time deposits. The main purpose of these financial instruments is to raise finance for the Group’s
operations. The Group has various other financial assets and liabilities such as trade and bills receivables and trade payables,
which arise directly from its operations.
The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk and liquidity risk. The
board of directors reviews and agrees policies for managing each of these risks and they are summarised below.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from oversea sales of products of paper
packaging and cross-border social e-commerce, and purchases of logistics and advertisement services with payments to
oversea suppliers.
The following table demonstrates the sensitivity at the end of the reporting period to a reasonably possible change in
the USD, JPY and EUR exchange rates, with all other variables held constant, of the Group’s profit before tax (arising from
USD, JPY and EUR denominated financial instruments).
Increase/
(decrease) in
foreign
currency/RMB
rate
Increase/(decrease)
in profit before tax
% RMB’000
31 December 2022
If RMB weakens against USD 5 3,156
If RMB strengthens against USD (5) (3,156)
If RMB weakens against JPY 5 6,801
If RMB strengthens against JPY (5) (6,801)
31 December 2023
If RMB weakens against JPY 5 9,004
If RMB strengthens against JPY (5) (9,004)
If RMB weakens against EUR 5 1,078
If RMB strengthens against EUR (5) (1,078)
31 December 2024
If RMB weakens against JPY 5 9,858
If RMB strengthens against JPY (5) (9,858)
If RMB weakens against USD 5 (4,153)
If RMB strengthens against USD (5) 4,153
Credit risk
The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers
who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are
monitored on an ongoing basis and the Group’s exposure to bad debts is not significant except for items individually
assessed. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group
does not offer credit terms without the specific approval of the deputy general manager.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-112 –


--- page 564 ---
Maximum exposure and year-end staging
The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s credit
policy, which is mainly based on reasonable and supportable information that is available at the reporting date about past
events, current conditions and forecasts of future economic conditions, and year-end staging classification as at the end of
each of the Relevant Periods. The amounts presented are gross amounts for financial assets.
As at 31 December 2022
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* – – – 504,880 504,880
Financial assets included in prepayments, other
receivables and other assets
– Normal** 42,311 – – – 42,311
– Doubtful** – – 92,247 – 92,247
Pledged deposits 129,971 – – – 129,971
Cash and cash equivalents 852,071 – – – 852,071
1,024,353 – 92,247 504,880 1,621,480
As at 31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* – – – 526,315 526,315
Financial assets included in prepayments, other
receivables and other assets
– Normal** 43,859 – – – 43,859
– Doubtful** – – 92,247 – 92,247
Pledged deposits 56,390 – – – 56,390
Time deposits 52,055 – – – 52,055
Cash and cash equivalents 1,062,110 – – – 1,062,110
1,214,414 – 92,247 526,315 1,832,976
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-113 –


--- page 565 ---
As at 31 December 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* − − − 596,566 596,566
Financial assets included in prepayments, other
receivables and other assets
– Normal** 56,838 − − − 56,838
– Doubtful** − − 93,546 − 93,546
Pledged deposits 67,971 − − − 67,971
Time deposits 155,872 − − − 155,872
Cash and cash equivalents 711,062 − − − 711,062
991,743 − 93,546 596,566 1,681,855
* For trade and bills receivables to which the Group applies the simplified approach for impairment,
information based on the provision matrix is disclosed in note 24 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be “normal” when they are not past due and there is no information indicating that the financial
assets had a significant increase in credit risk since initial recognition. Otherwise, the credit quality of the
financial assets is considered to be “doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade and bills receivables and
prepayments, other receivables and other assets are disclosed in notes 24 and 25 to the Historical Financial Information.
Concentrations of credit risk are managed by customers. Credit risk management is centralized according to
customers. At the end of the Relevant Periods, the Group had certain concentrations of credit risk as 51.4%, 55.9% and
50.5% of the book balance of the Group’s trade and bills receivables were due from the Group’s five largest customers,
respectively.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of
funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and
liabilities. The Group’s objective is to maintain a balance for continuity of funding to finance its working capital needs as
well as capital expenditure.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
interest-bearing borrowings. The Group’s policy is that all the borrowings should be approved by the deputy general
manager.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-114 –


--- page 566 ---
The tables below summarise the maturity profile of the Group’s financial liabilities at the end of each reporting
period based on contractual undiscounted payments:
31 December 2022
Within 1 year 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills payables 512,500 – – 512,500
Amounts due to related parties 3,117 – – 3,117
Interest-bearing bank borrowings 296,827 18,582 – 315,409
Lease liabilities 22,106 47,754 9,638 79,498
Other payables and accruals 35,909 – – 35,909
870,459 66,336 9,638 946,433
31 December 2023
Within 1 year 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills payables 640,520 – – 640,520
Amounts due to related parties 1,364 – – 1,364
Interest-bearing bank borrowings 108,713 162,322 – 271,035
Lease liabilities 26,833 61,513 6,957 95,303
Other payables and accruals 106,358 – – 106,358
883,788 223,835 6,957 1,114,580
31 December 2024
Within 1 year 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills payables 716,560 – – 716,560
Amounts due to related parties 972 – – 972
Interest-bearing bank borrowings 124,018 130,351 – 254,369
Lease liabilities 37,397 53,627 – 91,024
Other payables and accruals 78,437 – – 78,437
957,384 183,978 – 1,141,362
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a
going concern and to maintain healthy capital ratios in order to support its business and maximise equity holders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and
the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to equity holders, return capital to equity holders or issue new shares. The Group is not subject to any
externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing
capital during the Relevant Periods.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-115 –


--- page 567 ---
The Group monitors capital using a gearing ratio, which is debt divided by the equity plus debt. Debt includes
interest-bearing bank borrowings, trade and bills payables, other payables and accruals, lease liabilities and amounts due to
related parties. Capital includes equity attributable to owners of the parent. The gearing ratios as at 31 December 2022,
2023 and 2024 were as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings 312,193 258,617 248,193
Trade and bills payables 512,500 640,520 716,560
Other payables and accruals 115,442 188,349 181,321
Lease liabilities 77,438 88,385 84,143
Amounts due to related parties 3,117 1,364 972
Less: Cash and cash equivalents 852,071 1,062,110 711,062
Net debt 168,619 115,125 520,127
Equity attribute to owners of the parent 2,095,216 2,280,398 2,202,024
Equity and net debt 2,263,835 2,395,523 2,722,151
Gearing ratio 7% 5% 19%
47. EVENTS AFTER THE RELEV ANT PERIODS
Progress of share repurchase program
During the first quarter of 2025 and the period from 1 April 2025 to 30 April 2025, the Company repurchased
534,200 A shares, and 210,000 A shares, with the considerations of RMB7,225,000 and RMB2,337,000, respectively. As at
30 April 2025, the Company has cumulatively repurchased 744,200 A shares with the considerations of RMB9,562,000
under the current share repurchase program.
Distribution of profit
On 1 April 2025, the Board of Directors approved the proposed profit distribution for the year 2024, based on the
Company’s outstanding 384,769,288 A shares less repurchased 6,559,900 A shares, which was 378,209,388 shares, to
distribute cash dividends with the amount of RMB1.58 per 10 shares (including tax), a total cash dividend of RMB
59,757,000 will be distributed. The aforesaid matter was approved at the general meeting on 25 April 2025.
On 15 May 2025, the Company announced a cash dividend of RMB59,724,000 to be distributed, taking into account
of further share repurchases after the general meeting.
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the
companies comprising the Group in respect of any period subsequent to 31 December 2024.
APPENDIX IA ACCOUNTANTS’ REPORT
– IA-116 –


--- page 568 ---
The following is the text of a report, prepared for inclusion in this document, received from the
independent reporting accountants of the Company, Ernst & Young, Certified Public Accountants, Hong
Kong, for the purpose of incorporation in this document.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
ה
༸979໮
ࢭ27ᅽ
Tel ཥ༑: +852 2846 9888
Fax ෂॆ: +852 2868 4432
ey.com
INTRODUCTION
We have reviewed the interim financial information set out on pages IB-2 to IB-30, which
comprises the interim condensed consolidated statement of financial position of Xiamen Jihong Co., Ltd
(ʮ̡ , the “ Company ”) and its subsidiaries (together, the “ Group ”) as at 31
March 2025, and the related condensed consolidated statements of profit or loss, statements of
comprehensive income, statements of changes in equity and statements of cash flows of the Group for
the three months period then ended, and explanatory notes. The Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim
financial information to be in compliance with the relevant provisions thereof and International
Accounting Standard 34 Interim Financial Reporting (“IAS 34 ”). The directors of the Company are
responsible for the preparation and presentation of this interim financial information in accordance with
IAS 34. Our responsibility is to express a conclusion on this interim financial information based on our
review. Our report is made solely to you, as a body, in accordance with our agreed terms of engagement,
and for no other purpose. We do not assume responsibility towards or accept liability to any other
person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410
Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by
the Hong Kong Institute of Certified Public Accountants. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially less in scope than an audit
conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the interim
financial information is not prepared, in all material respects, in accordance with IAS 34.
Ernst & Y oung
Certified Public Accountants
Hong Kong
19 May 2025
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-1 –


--- page 569 ---
I. INTERIM FINANCIAL INFORMATION
Preparation of Interim Financial Information
Set out below is the interim financial information which forms an integral part of this accountants’
report.
The interim financial information is presented in Renminbi (“ RMB ”) and all values are rounded to
the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-2 –


--- page 570 ---
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Three months ended 31 March
Notes 2025 2024
RMB’000 RMB’000
(unaudited) (audited)
REVENUE 4 1,477,491 1,324,458
Cost of sales (805,801) (787,783)
GROSS PROFIT 671,690 536,675
Other income and gains 5 9,532 15,802
Selling and marketing expenses (513,981) (399,171)
Administrative expenses (64,571) (63,995)
Research and development expenses (32,156) (28,799)
Reversals/(accruals) of impairment
on financial assets 1,479 (1,684)
Share of (losses)/profits of associates (1,433) 523
Foreign exchange gains/(losses), net 4,273 (5,901)
Finance costs 7 (3,331) (3,121)
Other expenses and losses 5 (108) (590)
PROFIT BEFORE TAX 6 71,394 49,739
Income tax expense 8 (8,925) (10,194)
PROFIT FOR THE PERIOD 62,469 39,545
Attributable to:
Owners of the parent 59,160 42,805
Non-controlling interests 3,309 (3,260)
62,469 39,545
EARNINGS PER SHARE ATTRIBUTABLE TO
ORDINARY EQUITY HOLDERS OF THE
PARENT 10
Basic (RMB) 0.16 0.11
Diluted (RMB) 0.16 0.11
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-3 –


--- page 571 ---
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
PROFIT FOR THE PERIOD 62,469 39,545
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be reclassified to
profit or loss in subsequent periods:
Exchange differences on translation of foreign operations (73) 88
Share of other comprehensive income of associates (12) –
Net other comprehensive income that may be reclassified to
profit or loss in subsequent periods (85) 88
OTHER COMPREHENSIVE INCOME FOR THE PERIOD,
NET OF TAX (85) 88
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 62,384 39,633
Attributable to:
Owners of the parent 59,081 42,892
Non-controlling interests 3,303 (3,259)
62,384 39,633
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-4 –


--- page 572 ---
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
31 March
As at
31 December
Notes 2025 2024
RMB’000 RMB’000
(unaudited) (audited)
NON-CURRENT ASSETS
Property, plant and equipment 11 907,288 930,436
Right-of-use assets 12 168,151 176,350
Goodwill 9,585 9,585
Other intangible assets 19,105 19,910
Investment in associates 102,712 107,477
Equity investments designated at fair value through
other comprehensive income 8,254 8,254
Financial assets at fair value through profit or loss 13 130,500 130,863
Deferred tax assets 11,268 11,147
Time deposits 17 179,871 133,791
Other non-current assets 3,751 1,188
Total non-current assets 1,540,485 1,529,001
CURRENT ASSETS
Inventories 14 426,047 447,889
Trade and bills receivables 15 525,783 553,885
Prepayments, other receivables and other assets 16 150,134 141,874
Amounts due from related parties 25 1,009 1,243
Pledged deposits 17 84,814 67,971
Time deposits 17 64,228 50,169
Cash and cash equivalents 17 716,320 711,062
Total current assets 1,968,335 1,974,093
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-5 –


--- page 573 ---
As at
31 March
As at
31 December
Notes 2025 2024
RMB’000 RMB’000
(unaudited) (audited)
CURRENT LIABILITIES
Trade and bills payables 18 682,878 716,560
Other payables and accruals 19 146,272 181,321
Contract liabilities 9,698 17,858
Interest-bearing bank borrowings 20 170,204 121,126
Lease liabilities 33,962 34,678
Tax payables 12,093 8,645
Amounts due to related parties 25 723 972
Other current liabilities 3,325 3,227
Total current liabilities 1,059,155 1,084,387
NET CURRENT ASSETS 909,180 889,706
TOTAL ASSETS LESS CURRENT LIABILITIES 2,449,665 2,418,707
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings 20 105,817 127,067
Lease liabilities 43,386 49,465
Deferred income 31,042 30,945
Deferred tax liabilities 2,929 2,715
Total non-current liabilities 183,174 210,192
NET ASSETS 2,266,491 2,208,515
EQUITY
Equity attributable to owners of the parent
Share capital 384,769 384,769
Reserves 21 1,870,465 1,817,255
2,255,234 2,202,024
Non-controlling interests 11,257 6,491
Total equity 2,266,491 2,208,515
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-6 –


--- page 574 ---
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Share capital Treasury shares Share premium Share award reserve Statutory reserve
Other
comprehensive
income Retained profits Total
Non-controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2025 384,769 (136,164) 245,825 6,863 96,119 (20,849) 1,625,461 2,202,024 6,491 2,208,515
Profit for the period (unaudited) –––––– 59,160 59,160 3,309 62,469
Exchange differences on translation of foreign operations
(unaudited) ––––– (67) – (67) (6) (73)
Share of other comprehensive income of associates
(unaudited) ––––– (12) – (12) – (12)
Total comprehensive income for the period (unaudited) ––––– (79) 59,160 59,081 3,303 62,384
Equity-settled share-based payment expenses (unaudited) – – – 1,355 – – – 1,355 – 1,355
Shares repurchased for Share Incentive Plans (unaudited) – (7,226) ––––– (7,226) – (7,226)
Contribution from non-controlling interests (unaudited) –––––––– 1,463 1,463
As at 31 March 2025 (unaudited) 384,769 (143,390) 245,825 8,218 96,119 (20,928) 1,684,621 2,255,234 11,257 2,266,491
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-7 –


--- page 575 ---
Attributable to owners of the parent
Share capital Treasury shares Share premium Share award reserve Statutory reserve
Other
comprehensive
income Retained profits Total
Non-controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2024 385,009 (72,854) 218,557 19,001 78,744 (14,120) 1,666,061 2,280,398 32,456 2,312,854
Profit for the period (audited) –––––– 42,805 42,805 (3,260) 39,545
Exchange differences on translation of foreign operations
(audited) ––––– 8 7– 8 71 8 8
Total comprehensive income for the period (audited) ––––– 8 7 42,805 42,892 (3,259) 39,633
Equity-settled share-based payment expenses (audited) – – – 10,849 – – – 10,849 – 10,849
Shares repurchased for Share Incentive Plans (audited) – (62,897) ––––– (62,897) – (62,897)
Disposal/deregistration of subsidiaries (audited) –––––––– (24,646) (24,646)
As at 31 March 2024 (audited) 385,009 (135,751) 218,557 29,850 78,744 (14,033) 1,708,866 2,271,242 4,551 2,275,793
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-8 –


--- page 576 ---
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
CASH FLOWS FROM/(USED IN) OPERATING
ACTIVITIES
Cash from operations 71,720 (77,416)
Income tax paid (5,661) (19,716)
Interest received 1,896 3,097
Net cash flows from/(used in) operating activities 67,955 (94,035)
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of items of property, plant and equipment (21,205) (40,744)
Proceeds from disposal of items of property, plant and
equipment 1,218 2,828
Purchase of other intangible assets (3,000) (355)
Disposal of subsidiaries, net of cash disposed – (230)
Proceeds from deregistration of an associate 1,470 –
Dividend received from an associate 1,850 –
Dividend received from an equity investment designated at fair
value through other comprehensive income – 84
Purchase of deposits with original maturity of more than three
months when acquired (255,137) (80,000)
Proceeds from maturity of deposits with original maturity of
more than three months when acquired 196,703 45,312
Net cash flows used in investing activities (78,101) (73,105)
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-9 –


--- page 577 ---
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES
Proceeds from capital contributions by non-controlling interests 1,463 –
Deregistration of a subsidiary, net of cash disposed – (21,447)
Repurchase of shares (7,226) (62,897)
Proceeds from interest-bearing bank borrowings 93,950 77,000
Repayment of interest-bearing bank borrowings (66,100) (108,060)
Interest paid for interest-bearing bank borrowings (1,722) (1,516)
Principal portion of lease payments (6,152) (8,183)
Interest portion of lease payments (1,049) (1,116)
Listing expenses (1,528) (20,448)
Net cash flows from/(used in) financing activities 11,636 (146,667)
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIV ALENTS 1,490 (313,807)
Cash and cash equivalents at beginning of period 711,062 1,062,110
Effect of foreign exchange differences, net 3,768 (5,917)
CASH AND CASH EQUIV ALENTS AT END OF PERIOD 716,320 742,386
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-10 –


--- page 578 ---
II NOTES TO THE INTERIM FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Xiamen Jihong Co., Ltd (the “ Company ”) was incorporated in the People’s Republic of China (the “ PRC ”) as a limited
liability company on 24 December 2003. The registered address of the office of the Company is No. 9 Putou Road, Phase II,
Dongfu Industrial Zone, Haicang District, Xiamen, China. With the approval of the China Securities Regulatory Commission, the
Company completed its initial public offering and was listed on the Shenzhen Stock Exchange (stock code: 002803.SZ) on 12 July
2016. The Company is ultimately controlled by Ms. Zhuang Hao.
During the three months ended 31 March 2025 and 2024 (the “ Relevant Periods ”), the Company and its subsidiaries
(together as the “ Group ”) were principally involved in the business of paper packaging and cross-border social e-commerce.
2. BASIS OF PRESENTATION AND PRINCIPAL ACCOUNTING POLICIES
The unaudited interim financial information for the Relevant Periods has been prepared in accordance with International
Accounting Standard 34 Interim Financial Reporting (“ IAS 34 ”) issued by the International Accounting Standards Board
(“IASB ”).
The unaudited interim financial information does not include all the information, disclosures and the impact of the issued
but not yet effective international financial reporting standard required in the Historical Financial Information, and should be read
in conjunction with the Group’s Historical Financial Information for the years ended 31 December 2022, 2023 and 2024.
The accounting policies applied in the preparation of the unaudited interim financial information are consistent with those
used in the Group’s Historical Financial statements for the years ended 31 December 2022, 2023 and 2024.
The interim financial information has been prepared under the historical cost convention, except for certain trade and bills
receivables at fair value through other comprehensive income, equity investments designated at fair value through other
comprehensive income, financial assets at fair value through profit or loss and certain time deposits at fair value through profit or
loss which have been measured at fair value.
3. OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services and has three
reportable operating segments as follows:
(i) The cross-border social e-commerce operation;
(ii) The paper packaging operation; and
(iii) The other operations.
Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/loss,
which is a measure of adjusted profit/loss before tax. The adjusted profit/loss before tax is measured consistently with the Group’s
profit before tax except that impairment losses on financial assets is excluded from such measurement. Management also treats
the Company as part of the paper packaging segment.
Segment assets exclude cash and cash equivalents, time deposits, pledged deposits, deferred tax assets, equity investments
designated at fair value through other comprehensive income, financial assets at fair value through profit or loss and other
unallocated head office and corporate assets as these assets are managed on a group basis.
Segment liabilities exclude interest-bearing bank borrowings, tax payable, deferred tax liabilities and other unallocated
head office and corporate liabilities as these liabilities are managed on a group basis.
Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the
then prevailing market prices.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-11 –


--- page 579 ---
Three months ended 31 March 2025
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment revenue
Sales to external customers (unaudited) 930,071 545,776 1,644 1,477,491
Intersegment sales (unaudited) – – 974 974
Total segment revenue (unaudited) 930,071 545,776 2,618 1,478,465
Reconciliation:
Elimination of intersegment sales (unaudited) (974)
Revenue from contracts with customers (unaudited) 1,477,491
Segment results (unaudited) 33,598 38,678 (2,361) 69,915
Reconciliation:
Elimination of intersegment results (unaudited)* –
Impairment reversals on financial assets (unaudited) 1,479
Profit before tax (unaudited) 71,394
Three months ended 31 March 2024
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment revenue
Sales to external customers (audited) 725,746 547,988 50,724 1,324,458
Intersegment sales (audited) 408 – 733 1,141
Total segment revenue (audited) 726,154 547,988 51,457 1,325,599
Reconciliation:
Elimination of intersegment sales (audited) (1,141)
Revenue from contracts with customers (audited) 1,324,458
Segment results (audited) 13,806 183,562 12,214 209,582
Reconciliation:
Elimination of intersegment results (audited)* (158,159)
Impairment losses on financial assets (audited) (1,684)
Profit before tax (audited) 49,739
* The segment results of paper packaging segment contains dividends distributed by the cross-border social
e-commerce segment. During the Relevant Periods, the amounts of the distributed dividends were nil and
RMB150,000,000, respectively.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-12 –


--- page 580 ---
The following table presents the asset and liability information of the Group’s operating segments as at 31 March 2025 and
31 December 2024.
31 March 2025
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment assets 875,129 2,066,689 109,099 3,050,917
Reconciliation:
Elimination of intersegment receivables (unaudited) (644,568)
Corporate and other unallocated assets (unaudited) 1,102,471
Total assets (unaudited) 3,508,820
Segment liabilities 460,797 1,003,738 143,411 1,607,946
Reconciliation:
Elimination of intersegment payables (unaudited) (644,568)
Corporate and other unallocated liabilities (unaudited) 278,951
Total liabilities (unaudited) 1,242,329
31 December 2024
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
Segment assets 847,373 2,077,636 120,606 3,045,615
Reconciliation:
Elimination of intersegment receivables (audited) (591,880)
Corporate and other unallocated assets (audited) 1,049,359
Total assets (audited) 3,503,094
Segment liabilities 504,602 971,640 159,309 1,635,551
Reconciliation:
Elimination of intersegment payables (audited) (591,880)
Corporate and other unallocated liabilities (audited) 250,908
Total liabilities (audited) 1,294,579
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-13 –


--- page 581 ---
4. REVENUE
Revenue from contracts with customers
(a) Disaggregated revenue information
For the three months ended 31 March 2025
Segments
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited)
Types of goods or services
Cross-border social e-commerce 930,071 – – 930,071
Paper packaging – 545,776 – 545,776
Others – – 1,644 1,644
Total revenue from contracts with customers 930,071 545,776 1,644 1,477,491
Geographical markets
Northeast Asia 387,131 6,154 – 393,285
Southeast Asia 169,026 78 – 169,104
Middle East 80,908 8,487 – 89,395
Mainland China – 504,310 1,644 505,954
Europe and North America
– U.S. 108,145 155 − 108,300
– Europe and other countries in North America 182,997 1,636 − 184,633
Other countries/regions 1,864 24,956 – 26,820
Total revenue from contracts with customers 930,071 545,776 1,644 1,477,491
Timing of revenue recognition
Transferred at a point in time 930,071 545,776 1,644 1,477,491
Total revenue from contracts with customers 930,071 545,776 1,644 1,477,491
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-14 –


--- page 582 ---
Three months ended 31 March 2024
Segments
Cross-border
social
e-commerce
Paper
packaging Others Total
RMB’000 RMB’000 RMB’000 RMB’000
(audited) (audited) (audited) (audited)
Types of goods or services
Cross-border social e-commerce 725,746 – – 725,746
Paper packaging – 547,988 – 547,988
Others – – 50,724 50,724
Total revenue from contracts with customers 725,746 547,988 50,724 1,324,458
Geographical markets
Northeast Asia 373,673 4,816 – 378,489
Southeast Asia 174,219 49 – 174,268
Middle East 70,307 – – 70,307
Mainland China – 524,723 50,724 575,447
Europe and North America
– U.S. 21,319 2,587 − 23,906
– Europe and other countries in North America 85,061 211 − 85,272
Other countries/regions 1,167 15,602 – 16,769
Total revenue from contracts with customers 725,746 547,988 50,724 1,324,458
Timing of revenue recognition
Transferred at a point in time 725,746 547,988 50,724 1,324,458
Total revenue from contracts with customers 725,746 547,988 50,724 1,324,458
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of products
The performance obligation is satisfied upon the acceptance of the products by customers. For customers of
paper packaging, the contract price is usually settled within 30-90 days of delivery. For customers of cross-border
social e-commerce, the contract price is usually prepaid through online platforms or paid by cash on delivery, and
the Group normally settles with platforms or logistics service providers within 3-15 days.
Provision of services
The performance obligation is satisfied at the point in time once the services are completed and accepted by
customers based on the milestone achieved. Contract price is usually paid by customers within 30-90 days.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-15 –


--- page 583 ---
5. OTHER INCOME AND GAINS, OTHER EXPENSES AND LOSSES
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Other income
Government grants 5,441 9,927
Bank interest income 3,091 3,118
8,532 13,045
Gains
Gains on financial assets at fair value through profit or loss 405 605
Fair value gains on financial assets at fair value through profit or loss 144 –
Gains from deregistration of a subsidiary – 1,261
Gains on disposal of items of property, plant and equipment, net – 649
Others 451 242
1,000 2,757
Other income and gains 9,532 15,802
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Other expenses and losses
Losses on disposal of items of property, plant and equipment, net 67 –
Losses on disposal of subsidiaries – 553
Others 41 37
Other expenses and losses 108 590
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-16 –


--- page 584 ---
6. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Cost of inventories sold and services provided* 805,801 787,783
Advertising expenses 491,379 380,039
Depreciation of property, plant and equipment 27,610 26,335
Depreciation of right-of-use assets 8,674 9,202
Amortisation of other intangible assets 804 1,262
Equity-settled share-based payment expenses 1,355 10,849
Losses/(gains) on disposal of items of property, plant and equipment, net 67 (631)
Reversal of impairment of trade and bills receivables (1,980) (26)
Accrual of impairment of deposits and other receivables 501 1,710
Impairment of inventories 3,220 1,769
* Cost of inventories sold and services provided include impairment of inventories, expenses relating to depreciation
of property, plant and equipment, depreciation of right-of-use assets and staff costs, which are also included in the
respective total amounts disclosed separately above for each of these types of expenses.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Interest on bank borrowings 1,700 1,457
Interest on lease liabilities 1,049 1,116
Factoring charges (a) 582 548
3,331 3,121
(a) For certain trade receivables of Customer Group A, the Group entered into a factoring arrangement without recourse
with a factoring company, which is also an affiliate of Customer Group A, and recorded relevant factoring charges in
profit and loss.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-17 –


--- page 585 ---
8. INCOME TAX
The Group is subject to income tax on each entity basis on profits arising in or derived from the jurisdictions in which
members of the Group are domiciled and operate.
PRC corporate income tax
Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law ”) and Implementation Regulation of the EIT
Law, the EIT rate of the Group’s PRC subsidiaries is 25% unless subject to preferential tax as set out below.
Certain of the Group’s PRC subsidiaries are accredited as High and New Technology Enterprises and were therefore
entitled to a preferential income tax rate of 15% during the Relevant Periods. Such qualifications are subject to review by
the relevant tax authority in the PRC for every three years.
Certain subsidiaries engaged in the “Encouraged Industries in the Western Region” are eligible for the preferential
EIT rate of 15%.
Certain subsidiaries were in line with the polices in Notice on Preferential Corporate Income Tax Policies for
Kashgar and Khorgos Special Economic Development Zones in Xinjiang. The corporate income tax shall be exempted
within five years from the tax year to which the first production and operation income belongs.
Certain subsidiaries were qualified as small and micro enterprises and were entitled to preferential corporate income
tax rates of 5% during the Relevant Periods.
HK profit tax
Hong Kong profits tax is calculated at 16.5% on the estimated assessable profits for the Relevant Periods. However,
one subsidiary of the Group which is qualifying corporation can elect for the two-tiered Profits Tax rates regime. Under the
two-tiered Profits Tax rate regime, the first HK$2,000,000 of assessable profits of the qualifying Group entity established
in Hong Kong are taxed at 8.25% and the remaining profits are taxed at 16.5%.
Taxes on profits assessable elsewhere have been calculated at the rates of taxation prevailing in the respective
jurisdictions in which the Group operates.
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Current income tax
– Mainland China 6,387 9,085
– Hong Kong 2,445 393
Deferred tax 93 716
8,925 10,194
9. DIVIDENDS
No dividends were declared to the owners of the parent for the three months ended 31 March 2025 and the three months
ended 31 March 2024.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-18 –


--- page 586 ---
10. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
(a) Basic
Basic earnings per share (“ EPS ”) is calculated by dividing the profit attributable to owners of the Company by the
weighted average number of ordinary shares in issue during the Relevant Periods, respectively.
The following reflects the income and share data used in the basic earnings per share computation:
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Profit attributable to owners of the parent 59,160 42,805
Less: dividends payable to expected vested restricted shares 301 1,597
Profit attributable to owners of the Company used in calculating
basic EPS 58,859 41,208
Weighted average number of ordinary shares in issue during the
period used in the basic earnings per share calculation 372,679,295 370,033,448
Basic EPS (RMB per share) 0.16 0.11
(b) Diluted
The restricted shares granted under Share Incentive Plans by the Company have potential dilutive effect on the EPS.
Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding by the assumption of
the vesting of all potential dilutive ordinary shares arising from Share Incentive Plans (collectively forming the
denominator for computing the diluted EPS).
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Profit attributable to owners of the Company used in calculating
diluted EPS 59,160 42,805
Weighted average number of ordinary shares in issue during the
period used in the basic earnings per share calculation 372,679,295 370,033,448
Adjustments for potential shares arising from Share Incentive Plans – 883,548
Weighted average number of shares used in calculating diluted EPS 372,679,295 370,916,996
Diluted EPS (RMB per share) 0.16 0.11
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-19 –


--- page 587 ---
11. PROPERTY, PLANT AND EQUIPMENT
During the three months ended 31 March 2025, the Group acquired items of property, plant and equipment with a cost of
RMB7,668,000 (31 March 2024: RMB21,566,000).
Items of property, plant and equipment with a net book value of RMB3,206,000 were disposed of by the Group during the
three months ended 31 March 2025 (31 March 2024: RMB2,197,000), resulting in net losses on disposal of RMB67,000 (31
March 2024: net gains on disposal of RMB649,000).
12. LEASES
Right-of-use assets
For the three months ended 31 March 2025, additions to right-of-use assets were RMB453,000 (31 March 2024:
RMB4,258,000).
13. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Other unlisted investments, at fair value 130,500 130,863
The above unlisted investments were investments issued by private equity fund in Hong Kong, China. They were
mandatorily classified as financial assets at fair value through profit or loss as their contractual cash flows are not solely payments
of principal and interest.
As of 31 March 2025 and 31 December 2024, the private equity fund was still in the fundraising stage and had not yet made
external investments. The management believe that the fair value of the fund unlisted investments as of 31 March 2025 and 31
December 2024 was similar to the investment cost. The fair value change of the fund investments during the three months ended
31 March 2025 was attributable to exchange rate fluctuations.
14. INVENTORIES
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Raw materials 137,858 160,553
Work in progress 27,766 28,320
Finished goods 275,214 271,470
Others 266 448
441,104 460,791
Impairment allowance (15,057) (12,902)
426,047 447,889
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-20 –


--- page 588 ---
15. TRADE AND BILLS RECEIV ABLES
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Trade receivables 561,382 591,571
Impairment (40,689) (42,681)
Trade receivables, net 520,693 548,890
Bills receivables 5,090 4,995
Trade and bills receivables 525,783 553,885
An ageing analysis of the trade receivables of the Group as at 31 March 2025 and 31 December 2024 (based on the invoice
date) is as follows:
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Within 1 year 538,322 569,614
1 to 2 years 5,182 5,595
2 to 3 years 3,926 4,038
3 to 4 years 11,508 10,926
4 to 5 years 1,180 206
Over 5 years 1,264 1,192
561,382 591,571
Impairment allowance (40,689) (42,681)
520,693 548,890
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-21 –


--- page 589 ---
The movements in the loss allowance for impairment of trade receivables are as follows:
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
At beginning of the period/year 42,681 37,691
(Reversals)/additions (1,980) 7,229
Write-off (12) (2,239)
At end of the period/year 40,689 42,681
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The
provision rates are based on aging for groupings of various customer segments with similar loss patterns. The calculation reflects
the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the
reporting date about past events, current conditions and forecasts of future economic conditions.
As at 31 March 2025 (unaudited)
Expected credit
loss rate
Gross carrying
amount
Expected credit
losses
Within one year 4.83% 538,322 26,007
1 to 2 years 10.00% 5,182 518
2 to 3 years 20.00% 3,926 785
3 to 4 years 40.00% 833 333
4 to 5 years 60.00% 183 110
Over 5 years 100.00% 387 387
548,833 28,140
Individually assessed 100.00% 12,549 12,549
561,382 40,689
As at 31 December 2024 (audited)
Expected credit
loss rate
Gross carrying
amount
Expected credit
losses
Within one year 4.96% 569,614 28,230
1 to 2 years 10.00% 5,595 559
2 to 3 years 20.00% 2,526 505
3 to 4 years 40.00% 657 263
4 to 5 years 60.00% 137 82
Over 5 years 100.00% 383 383
578,912 30,022
Individually assessed 100.00% 12,659 12,659
591,571 42,681
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-22 –


--- page 590 ---
16. PREPA YMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Prepayments 38,730 21,080
Deposits and other receivables 142,128 150,088
V alue-added tax recoverable 10,658 17,527
Prepaid income tax 2,336 2,059
Listing expense 49,995 45,870
Others 1,828 296
245,675 236,920
Impairment allowance (95,541) (95,046)
150,134 141,874
17. CASH AND CASH EQUIV ALENTS, PLEDGED DEPOSITS AND TIME DEPOSITS
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Current
Cash and cash equivalents 716,320 711,062
Time deposits with original maturities between three months to one year 64,228 50,169
Pledged deposits 84,814 67,971
865,362 829,202
Non-current
Time deposits with original maturities between three months to one year 179,871 133,791
The RMB is not freely convertible into other currencies, however, under Mainland China’s Foreign Exchange Control
Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to
exchange RMB for other currencies through banks authorised to conduct foreign exchange business.
The bank balances are deposited with creditworthy banks with no recent history of default.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-23 –


--- page 591 ---
18. TRADE AND BILLS PA Y ABLES
An ageing analysis of the trade and bills payables as at 31 March 2025 and 31 December 2024, based on the invoice date, is
as follows:
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Within 1 year 665,877 695,430
1 to 2 years 11,075 12,916
2 to 3 years 2,635 3,950
Over 3 years 3,291 4,264
682,878 716,560
In 2024 August, the Group entered into supplier finance arrangements with Ping An Bank Co., Ltd. (“ Ping An Bank ”) and
Agricultural Bank of China Limited (“ Agricultural Bank ”), together as the “discounting banks”. Pursuant to the agreements,
Ping An Bank provided discounting the bill receivables of the Group’s suppliers without credit limit. Agricultural Bank provided a
total credit limit up to RMB50 million for discounting the bill receivables of the Group’s suppliers.
Under these supplier finance arrangements, the Group’s suppliers can elect to have their undue bill receivables from the
Group discounted by the discounting banks. Upon the Group’s approval, the discounting banks will pay the suppliers directly for
the discounted receivables. The Group will subsequently make payments to the discounting banks to settle the discounted bill
receivables. The term of the above supplier finance arrangements is usually not more than 6 months.
From the perspective of the Group, the supplier finance arrangements effect a non-cash movement of the reclassification
from payables to suppliers to payables to the discounting banks. As at 31 March 2025, Ping An Bank and Agricultural Bank had
paid discounting financing funds amounting to RMB26,457,000 and RMB24,403,000, respectively.
19. OTHER PA Y ABLES AND ACCRUALS
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Payroll and welfare payables 62,008 94,319
Repurchase obligation for restricted shares 47,101 47,101
Deposits and other payable 29,698 31,336
Others 7,465 8,565
146,272 181,321
Other payables are non-interest-bearing and have no fixed terms of settlement, except for repurchase obligation for
restricted shares which will be settled according to the vesting schedules.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-24 –


--- page 592 ---
20. INTEREST-BEARING BANK BORROWINGS
As at 31 March 2025 As at 31 December 2024
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
(unaudited) (unaudited) (unaudited) (audited) (audited) (audited)
Current
Bank loans – secured 2.21%-2.80% 2025-2026 72,506 2.55%-3.15% 2025 29,522
Bank loans – unsecured 2.21%-3.15% 2025-2026 84,017 2.40%-2.55% 2025 79,054
Current portion of long term
bank loans – secured 2.55%-3.50% 2025-2026 4,420 2.55%-3.50% 2025 4,543
Current portion of long term
bank loans – unsecured 2.00%-4.00% 2025-2026 9,261 4.00% 2025 8,007
170,204 121,126
Non-current
Bank loans – secured 2.55%-3.50% 2026-2027 80,167 2.55%-3.50% 2026-2027 127,067
Bank loans – unsecured 2.00% 2028 25,650 – – –
105,817 127,067
(a) Certain of the Group’s buildings with net carrying amount of approximately RMB31,628,000 and RMB32,076,000
as at 31 March 2025 and 31 December 2024, respectively, were pledged to secure bank facilities granted to the
Group for borrowings and bills payables.
(b) Certain of the Group’s land use rights with a net carrying amount of approximately RMB29,733,000 and
RMB29,902,000 as at 31 March 2025 and 31 December 2024, respectively, were pledged to secure bank facilities
granted to the Group for borrowings and bills payables.
(c) As at 31 March 2025 and 31 December 2024, the Group’s interest-bearing bank borrowings of RMB157,093,000 and
RMB161,133,000, respectively, were jointly guaranteed by the Company and its subsidiaries of the Group.
21. RESERVES
The amounts of the Group’s reserves and the movements therein are presented in the interim condensed consolidated
statements of changes in equity in the interim financial information.
(a) Statutory reserve
In accordance with the Company Law of the PRC, companies registered in the PRC are required to allocate 10% of
the statutory after tax profits to the statutory reserve until the cumulative total of the reserve reaches 50% registered
capital. Subject to approval from the relevant PRC authorities, the statutory reserve may be used to offset any accumulated
losses or increase the registered capital of the companies. The statutory reserve is not available for dividend distribution to
equity holders of the PRC subsidiaries.
(b) Share award reserve
The share award reserve comprises the fair value of equity-settled share-based payment expenses.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-25 –


--- page 593 ---
(c) Capital reserve
The capital reserve mainly arose from (i) the capital contributions from the then equity holders of the Group’s
subsidiaries, after elimination of investments in subsidiaries; and (ii) the acquisition of non-controlling interest of the
Group’s subsidiaries. Details of the movement in capital reserve are set out in the interim condensed consolidated
statements of changes in equity of the interim financial information.
(d) Other comprehensive income
The other comprehensive reserve mainly represented exchange fluctuation reserve, which is used to record exchange
differences arising from the translation of the financial information of entities of which the functional currency is not
RMB.
(e) Treasury Shares
Number of shares Treasury shares
RMB’000
At 31 December 2024 (audited) 11,982,292 136,164
Repurchase of shares (i) 534,200 7,226
At 31 March 2025 (unaudited) 12,516,492 143,390
(i) The Company repurchased shares for future Share Incentive Plans through centralized price bidding by
self-owned funds, which were recognised as treasury shares as at 31 March 2025 and 31 December 2024.
22. CONTINGENT LIABILITIES
As at 31 March 2025 and 31 December 2024, neither the Group nor the Company had any significant contingent liabilities.
23. COMMITMENTS
The Group had the following capital commitments at 31 March 2025 and 31 December 2024:
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Contracted, but not provided for purchase of property, plant and
equipment 26,184 11,455
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-26 –


--- page 594 ---
24. DISPOSAL AND DEREGISTRATION OF SUBSIDIARIES
(a) Disposal of subsidiaries
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Net assets disposed of:
Cash and cash equivalents – 958
Other current assets – 15,038
Other non-current assets – 87
Other current liabilities – (13,020)
Other non-current liabilities – –
Subtotal – 3,063
Non-controlling interests – (1,470)
Net assets attributable to the Group disposed of: – 1,593
Losses on disposal of subsidiaries – (553)
Total consideration – 1,040
Satisfied by:
Cash – 1,040
An analysis of the net inflow of cash and cash equivalents in respect of the disposal of subsidiaries is as follows:
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Cash consideration – 1,040
Cash and cash equivalents disposed of – (958)
Net inflow of cash and cash equivalents in respect of the disposal
of subsidiaries –8 2
(b) Deregistration of a subsidiary
On 14 May 2024, the Group properly and legally deregistrated Shaanxi Y ongxin Paper Industry Packaging Co., Ltd.
(“Shaanxi Y ongxin ”), and such deregistration has been completely settled. Before the deregistration, the Group’s direct
equity interest in Shaanxi Y ongxin was 51%. Net outflow of cash and cash equivalents in respect of the deregistration of
Shaanxi Y ongxin was RMB21,447,000, representing 49% non-controlling interest of the net asset value of Shaanxi Y ongxin
at the date of deregistration. The gains on deregistration of Shaanxi Y ongxin had been reflected in the consolidated
statements of profit or loss.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-27 –


--- page 595 ---
25. RELATED PARTY TRANSACTIONS
(a) Transactions with related parties
The Group had the following transactions with related parties during the Relevant Periods:
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Sales of goods
Associates 35 550
Purchases of products
Associates 674 1,007
Purchases of services
Associates 66 500
The sales to the related parties and the purchases from the related parties were made according to the published
prices and conditions negotiated between the parties.
(b) Outstanding balances with related parties
As at
31 March
As at
31 December
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Amounts due to related parties
Associates 723 972
Amounts due from related parties
Associates 1,009 1,243
The outstanding balances with related parties are all trade in nature.
(c) Compensation of key management personnel of the Group:
Three months ended 31 March
2025 2024
RMB’000 RMB’000
(unaudited) (audited)
Fees 205 223
Other emoluments:
Salaries, allowances and benefits in kind 2,869 1,731
Performance related bonuses – 90
Equity-settled share-based payment expenses 282 1,791
Pension scheme contributions 43 45
3,399 3,880
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-28 –


--- page 596 ---
26. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, time deposits, trade and bills receivables,
financial assets included in prepayments, other receivables and other assets, amounts due from related parties, amounts due to
related parties, trade and bill payables, current portion of interest-bearing bank borrowings and financial liabilities included in
other payables and accruals approximate to their carrying amounts largely due to the short-term maturities of these instruments.
Management measures the fair value of interest-bearing bank borrowings based on discounted cash flow method. The fair values
approximate to their carrying amounts.
The fair values of the non-current portion of pledged deposits and interest-bearing bank borrowings have been calculated
by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and
remaining maturities. The fair values approximate to their carrying amounts.
The unlisted investments in financial assets at fair value through profit or loss were investments issued by private equity
fund in Hong Kong. As at 31 March 2025 and 31 December 2024, the private equity fund was in the fundraising stage and had not
yet made investments. The fair values approximate to their carrying amounts.
The Group’s finance department headed by the finance manager is responsible for determining the policies and procedures
for the fair value measurement of financial instruments. The Group’s finance manager reports directly to the financial director and
the audit committee. At each reporting date, the finance department analyses the movements in the values of financial instruments
and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the financial director. The
valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:
Assets measured at fair value:
Fair value measurement using
As at 31
March
Quoted prices
in active
markets
Significant
observable
inputs
Significant
unobservable
inputs
2025 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited)
Trade and bills receivables 5,089 − 5,089 –
Financial assets at fair value through
profit and loss 194,728 64,228 130,500 −
Equity investments designated at fair
value through other
comprehensive income* 8,254 − − 8,254
208,071 64,228 135,589 8,254
* As of 31 March 2025, there was no significant change in the financial position and performance of equity
investments companies compared to the end of the previous period, and there was no change in the valuation
techniques or parameters disclosed in Note 45 to the Historical Financial Information in Appendix IA,
including weighted average cost of capital and discount for lack of liquidity, which contributed to the
consistency in the valuation of these equity instruments. Thus, the fair value of equity investments designated
at fair value through other comprehensive income remained the same as on 31 December 2024. The fair value
change of financial assets at fair value through profit and loss during the three months ended 31 March 2025
was attributable to exchange rate fluctuations.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-29 –


--- page 597 ---
Fair value measurement using
As at 31
December
Quoted prices
in active
markets
Significant
observable
inputs
Significant
unobservable
inputs
2024 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
(audited) (audited) (audited) (audited)
Trade and bills receivables 4,204 – 4,204 −
Financial assets at fair value through
profit and loss 158,951 28,088 130,863 −
Equity investments designated at fair
value through other
comprehensive income 8,254 – – 8,254
171,409 28,088 135,067 8,254
27. EVENTS AFTER THE RELEV ANT PERIODS
Progress of share repurchase program
During the period from 1 April 2025 to 30 April 2025, the Company repurchased 210,000 A shares with the
considerations of RMB2,337,000 under the current share repurchase program.
Distribution of profit
On 1 April 2025, the Board of Directors approved the proposed profit distribution for the year 2024, based on the
Company’s outstanding 384,769,288 A shares less repurchased 6,559,900 A shares, which was 378,209,388 shares, to
distribute cash dividends with the amount of RMB1.58 per 10 shares (including tax), a total cash dividend of RMB
59,757,000 will be distributed. The aforesaid matter was approved at the general meeting on 25 April 2025.
On 15 May 2025, the Company announced a cash dividend of RMB59,724,000 to be distributed, taking into account
of further share repurchases after the general meeting.
APPENDIX IB UNAUDITED INTERIM FINANCIAL INFORMATION
– IB-30 –


--- page 598 ---
The following information dose not form part of the Accountant’s Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as set out in
Appendix IA to this document, and is included herein for information purpose only. The unaudited pro
forma financial information should be read in conjunction with the section headed “Financial
Information” in this Prospectus, the Accountants’ Report set out in Appendix IA to this Prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets prepared
in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on the Stock
Exchange of Hong Kong Limited and with reference to Accounting Guideline 7 Preparation of Pro
F orma Financial Information for inclusion in Investment Circulars issued by the Hong Kong Institute of
Certified Public Accountants for illustration purposes only, and is set out here to illustrate the effects of
the Global Offering on the consolidated net tangible assets of the Group attributable to the owners of the
parent as of 31 December 2024 as if the Global Offering had taken place on 31 December 2024.
The unaudited pro forma statement of adjusted consolidated net tangible assets has been prepared
for illustrative purpose only and, because of its hypothetical nature, it may not give a true picture of the
consolidated net tangible assets of the Group attributable to the owner of the parent had the Global
Offering been completed as of 31 December 2024 or as at any future dates. It is prepared based on our
consolidated net tangible assets as of 31 December 2024 as set out in the Accountants’ Report as set out
in Appendix IA to this Prospectus and adjusted as described below. The unaudited pro forma adjusted
consolidated net tangible assets of the Group attributable to the owners of the Company does not form
part of the Accountants’ Report as set out in Appendix IA to this Prospectus.
Consolidated
net tangible
assets of
the Group
attributable
to owners of
the parent
as at
31 December
2024
Estimated
net Proceeds
from the
Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets
attributable
to owners of
the parent
as at
31 December
2024
Unaudited
pro forma
adjusted
consolidated
net tangible
assets per
Share as at
31 December
2024
Unaudited
pro forma
adjusted
consolidated
net tangible
assets per
Share as at
31 December
2024
RMB’000 RMB’000 RMB’000 RMB (HK$
(Note 1) (Note 2) (Note 3)
equivalent)
(note 4)
Based on an Offer Price of
HK$7.48 per Share 2,172,529 373,179 2,545,708 5.62 6.06
Based on an Offer Price of
HK$10.68 per Share 2,172,529 564,461 2,736,990 6.05 6.52
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 599 ---
Notes:
1. The consolidated net tangible assets of the Group attributable to owners of the parent as at 31 December 2024 is
arrived at after deducting other intangible assets of RMB19,910,000 and goodwill of RMB9,585,000 as at 31
December 2024 from the consolidated equity attributable to owners of the parent of RMB2,202,024,000 as at 31
December 2024 set out in the Accountants’ Report in Appendix IA to this Prospectus.
2. The estimated net proceeds from the Global Offering are based on estimated low end and high end offer prices of
HK$7.48 and HK$10.68 per H Share after deduction of underwriting fees and commissions and other related
expenses payable by the Company (excluding the listing expense that have been charged to profit or loss during the
Track Record Period).
3. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per Share are
arrived at by dividing the unaudited pro forma adjusted net tangible assets by 452,679,288 shares, being the number
of shares in issue assuming that the Global Offering had been completed on 31 December 2024 and excluding the
impact of the subsequent events: The Company (i) repurchased 744,200 A shares with the consideration of RMB9.6
million from 1 January 2025 to 30 April 2025 and (ii) on 15 May 2025, the Company announced a cash dividend of
RMB59,724,000 to be distributed. Including the impact of subsequent events, the unaudited pro forma adjusted
consolidated net tangible assets per Share as at 31 December 2024 would be HK$5.90 and HK$6.35, based on an
Offer Price of HK$7.48 and HK$10.68 per Share, respectively.
4. For the purpose of this unaudited pro forma statement of adjusted net tangible assets, the balances stated in RMB are
converted into HK$ at the rate of RMB1.0000 to HK$1.0781.
5. No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of the Group
to reflect any trading result or other transactions entered into subsequent to 31 December 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 600 ---
The following is the text of a report, prepared for the purpose of incorporation in this prospectus,
received from the reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong, in
respect of the unaudited pro forma financial information.
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
ה
༸979໮
ࢭ27ᅽ
Tel ཥ༑: +852 2846 9888
Fax ෂॆ: +852 2868 4432
ey.com
TO THE DIRECTORS OF XIAMEN JIHONG CO., LTD
We have completed our assurance engagement to report on the compilation of pro forma financial
information of Xiamen Jihong Co., Ltd (the “ Company ”) and its subsidiaries (hereinafter collectively
referred to as the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes
only. The pro forma financial information consists of the unaudited pro forma adjusted consolidated net
tangible assets as at 31 December 2024, and related notes as set out on pages II-1 to II-2 of the
prospectus dated 19 May 2025 issued by the Company (the “ Pro Forma Financial Information ”). The
applicable criteria on the basis of which the Directors have compiled the Pro Forma Financial
Information are described in Appendix II(A) to the Prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the impact
of the global offering of shares of the Company on the Group’s financial position as at 31 December
2024 as if the transaction had taken place at 31 December 2024. As part of this process, information
about the Group’s financial position has been extracted by the Directors from the Group’s financial
statements for the year ended 31 December 2024, on which an accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline (“ AG”) 7 Preparation
of Pro F orma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong
Institute of Certified Public Accountants (the “ HKICPA ”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of Ethics for
Professional Accountants issued by the HKICPA, which is founded on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for Firms
that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements which requires the firm to design, implement and operate a system of quality management
including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 601 ---
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules,
on the Pro Forma Financial Information and to report our opinion to you. We do not accept any
responsibility for any reports previously given by us on any financial information used in the
compilation of the Pro Forma Financial Information beyond that owed to those to whom those reports
were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro F orma Financial
Information Included in a Prospectus issued by the HKICPA. This standard requires that the reporting
accountants plan and perform procedures to obtain reasonable assurance about whether the Directors
have compiled the Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing
Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the Pro Forma Financial Information,
nor have we, in the course of this engagement, performed an audit or review of the financial information
used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely to
illustrate the impact of the global offering of shares of the Company on unadjusted financial
information of the Group as if the transaction had been undertaken at an earlier date selected for
purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the
transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial Information has
been properly compiled on the basis of the applicable criteria involves performing procedures to assess
whether the applicable criteria used by the Directors in the compilation of the Pro Forma Financial
Information provide a reasonable basis for presenting the significant effects directly attributable to the
transaction, and to obtain sufficient appropriate evidence about whether:
• the related pro forma adjustments give appropriate effect to those criteria; and
• the Pro Forma Financial Information reflects the proper application of those adjustments to
the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which the
Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial Information as
disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
19 May 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


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TAXATION
This appendix contains a summary of laws and regulations in respect of taxation and foreign
exchange in Mainland China and Hong Kong SAR.
This section does not address any aspect of taxation of Mainland China or Hong Kong SAR other
than income tax, capital tax, value-added tax, stamp duty and estate duty. Prospective investors are
advised to consult their own tax advisers regarding Mainland China, Hong Kong SAR and other tax
consequences of investing in H Shares.
PRC TAXATION
Taxation on Dividends
Individual Investors
In accordance with the Individual Income Tax Law of the PRC ()
(hereinafter referred to as “IIT Law”) issued by the SCNPC on September 10, 1980, last amended on August
31, 2018 and came into effect on January 1, 2019, and the Regulation on the Implementation of the Individual
Income Tax Law of the PRC (ૢԷ) (hereinafter referred to as “IIT
Rules”) last amended by the State Council on December 18, 2018 and came into effect on January 1, 2019,
dividends paid by Chinese companies to individual investors shall general be subject to withholding tax at a
rate of 20%. Meanwhile, according to the Notice of the Ministry of Finance, the State Administration of
Taxation and the China Securities Regulatory Commission on Issues concerning Differentiated Individual
Income Tax Policies on Dividends and Bonuses of Listed Companies (೼ਕᐼ҅eᗇ္ึᗫ
) (No.101 [2015] of the Ministry of Finance)
issued by the MOF on September 7, 2015 and was partially invalid on July 1, 2019, which means the Notice
does not apply to the differentiated individual income tax policies on dividends and bonuses of companies
quoted on the National Equities Exchange and Quotations, where an individual acquires the stocks of a listed
company from public offering of the company or from the stock market, if the stock holding period is more
than one year, the dividend incomes shall be exempted from personal income tax. Where an individual
acquires the stocks of a listed company from public offering of the company or from the stock market, if the
stock holding period is one month or less, the income from dividends shall be included into the taxable
incomes in full amount; if the stock holding period is more than one month and up to one year, the dividend
income shall be included into the taxable incomes at the reduced rate of 50% for the time being. Individual
income taxes on the aforesaid incomes shall be collected at the uniform rate of 20%.
For a foreign individual who is not a resident of the PRC, his/her receipt of dividends from a PRC
company is normally subject to PRC withholding tax of 20% unless specifically exempted by the
taxation authority of the State Council or reduced by an applicable tax treaty. Pursuant to the Notice of
the SAT on Issues Concerning Taxation and the Administration of Individual Income Tax Collection
After the Annulment of the Document Guo Shui Fa [1993] NO. 045 (਷೼೯ [1993]
045 ) (No. 348 [2011] of the State Administration of
Taxation)issued by the SA T on June 28, 2011, domestic non-foreign-invested enterprises issuing shares
in Hong Kong SAR may generally, when distributing dividends, withhold individual income tax at the
rate of 10%.
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For individual holders of H Shares receiving dividends who are identified as tax residents of
countries that have entered into a tax treaty with Mainland China with tax rates lower than 10%, the
distributing non-foreign-invested enterprise whose shares are listed in Hong Kong SAR may apply on
behalf of such holders for enjoying the lower preferential tax rate, and, upon approval by the tax
authorities, the amount which is over-withheld will be refunded. For individual holders of H Shares
receiving dividends who are identified as tax residents of countries that have entered into a tax treaty
with Mainland China that provides for tax rates higher than 10% but lower than 20%, the
non-foreign-invested enterprise is required to withhold the tax at the applicable rate under the treaties,
and no application to the tax authorities is required. For individual holders of H Shares receiving
dividends who are identified as tax residents of countries without taxation treaties with Mainland China,
the non-foreign-invested enterprise is required to withhold the tax at a rate of 20%.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to
Taxes on Income (τર ) signed on
August 21, 2006, the PRC government may impose tax on dividends paid to a Hong Kong SAR resident
(including natural person and legal entity) by a PRC company, but such tax shall not exceed 10% of the
total amount of the dividends payable. If a Hong Kong SAR resident directly holds 25% or more of the
equity interest in a PRC company, then the amount of such shall not exceed 5% of the total dividends
payable by the PRC company. Announcement of the SAT on the Entry into F orce and Implementation of
the Protocol V to the Arrangement between the Mainland and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income (τ
ʮѓ ) (Announcement No. 51 [2019] of the SA T) becoming effective on
December 31, 2019 states that such provisions shall not apply to arrangement made for the primary
purpose of gaining such tax benefits.
Enterprise Investors
In accordance with the Enterprise Income Tax Law of the PRC ( )
(hereinafter referred to as “EIT Law”)which was promulgated on March 16, 2007 and last amended on
December 29, 2018, and the Regulation on the Implementation of the Enterprise Income Tax Law of the
PRC (ૢԷ ) (hereinafter referred to as “EIT Rules”)which
became effective on January 1, 2008 and last amended on December 6, 2024 which took effect on
January 20, 2025, a non-resident enterprise is generally subject to a 10% enterprise income tax on
PRC-sourced income, including dividends received from a PRC resident enterprise whose shares are
issued and listed in Hong Kong SAR, if such non-resident enterprise does not have an establishment or
premises in Mainland China or has an establishment or premises in Mainland China but the
PRC-sourced income is not connected with such establishment or premises in Mainland China. The
aforesaid income tax must be withheld at source, with the payer of the income being the withholding
agent. Such withholding tax may be reduced or eliminated under an applicable treaty for the avoidance
of double taxation.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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The Notice of the SAT on the Issues Concerning Withholding the Enterprise Income Tax on the
Dividends Paid by Chinese Resident Enterprises to H-Share Holders Which are Oversea Non-resident
Enterprises (͏ΆุΣྤ̮ Hה
) issued by the SA T and became effective on November 6, 2008, further clarified
that a PRC resident enterprise must withhold enterprise income tax at a rate of 10% on dividends paid to
non-PRC resident enterprise H Shareholders which are derived out of profit generated after January 1,
2008. A non-PRC resident enterprise H Shareholder which is entitled to a preferential tax rate under an
applicable tax treaty or arrangement may, directly or through its agent, apply to the competent tax
authorities for a refund of the excess amount of tax withheld. The Reply of the SAT on Imposition of
Enterprise Income Tax on B-share and Other Dividends of Non-resident Enterprises (೼ਕᐼ҅ᗫ
͏Άุ՟੻ Bҭᔧ ) issued by the SA T on July 24, 2009
further provides that any PRC-resident enterprise that is listed on overseas stock exchanges must
withhold enterprise income tax at a rate of 10% on dividends that it distributes to non-PRC resident
enterprise shareholders.
Pursuant to Arrangements between the Mainland of China and Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes
on Income (τર ), signed on
August 21, 2006, a PRC resident enterprise which distributes dividends to its Hong Kong shareholders
shall pay income tax according to PRC laws, however, if the beneficiary of the dividends is a Hong
Kong SAR resident enterprise, which directly holds not less than 25% equity of the aforesaid enterprise
(i.e. the dividend distributor), the tax levied shall be not more than 5% of the distributed dividends. If
the beneficiary is a Hong Kong SAR resident enterprise, which directly holds less than 25% equity of
the aforesaid enterprise, the tax levied shall be not more than 10% of the distributed dividends.
Furthermore, pursuant to the Circular of the SAT on Relevant Issues relating to the Implementation
of Dividend Clauses in Tax Treaty Agreement (ٙ
), which was promulgated and with effect from February 20, 2009, all of the following
requirements should be satisfied where a fiscal resident of the other party to the tax agreement needs to
be entitled to such tax agreement treatment as being taxed at a tax rate specified in the tax agreement for
the dividends paid to it by a Chinese resident company: (i) such a fiscal resident who obtains dividends
should be a company as provided in the tax agreement; (ii) owner’s equity interests and voting shares of
the Chinese resident company directly owned by such a fiscal resident reaches a specified percentage;
and (iii) the equity interests of the Chinese resident company directly owned by such a fiscal resident, at
any time during the 12 months prior to the obtainment of the dividends, reach a percentage specified in
the tax agreement.
In addition, according to the Measures for Non-resident Taxpayers’ Enjoyment of Treaty Benefits
( ) issued on October 14, 2019 and became effective on January
1, 2020, a non-resident taxpayer satisfying the terms and conditions for enjoying the taxation treatment
may be entitled to the taxation treaties treatment itself/himself when filing a tax declaration or making a
withholding declaration through a withholding agent, and retain relevant documents and information
subject to the subsequent administration by the tax authorities.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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Taxation of Capital Gains
Individual investors
In accordance with the IIT Law and the IIT Rules, individuals are subject to individual income tax
at the rate of 20% on gains realized on the sale of equity interests in PRC resident enterprises. Under the
Notice of the MOF and SAT on Declaring that Individual Income Tax Continues to Be Exempted over
Individual Income Tax from Transfer of Shares (੻ᘱᚃᅲ
) (No. 61 [1998] of the MOF) issued by the MOF and SA T on March 30,
1998, from January 1, 1997, gains of individuals from the transfer of shares of listed companies
continue to be exempted from individual income tax. According to the current IIT Law and the IIT
Rules, the SA T has not explicitly stated whether it will continue to exempt individuals from income tax
on income derived from the transfer of listed shares. However, on December 31, 2009, the MOF, SA T
and CSRC jointly issued the Notice on Relevant Issues Concerning the Individual Income Tax on
individual Income from Transfer of Non-tradable Shares of Listed Companies (೼ਕᐼ҅
 ) (No. 167 [2009] of the
MOF), which provides that individuals income from transferring listed shares on certain domestic
exchanges shall continue to be exempted from individual income tax, except for shares of certain
specified companies (as defined in the Supplementary Notice on Issues Concerning the Levy of
Individual Income Tax on Individuals’ Income from the Transfer of Restricted Stocks of Listed
Companies issued by the MOF, SA T and CSRC on November 10, 2010) (೼ਕᐼ҅eᗇ
 ) (No. 70 [2010] of the
MOF). As at the Latest Practicable Date, the aforesaid provision has not expressly provided that
individual income tax shall be collected from non-PRC resident individuals on the sale of shares of PRC
resident enterprises listed on overseas stock exchanges such as the Stock Exchange. In practice, the
PRC tax authorities have not collected income tax from non-PRC resident individuals on gains from the
sale of shares of PRC resident enterprises listed on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law and the EIT Rules, a non-resident enterprise is generally subject
to withholding tax at a rate of 10% with respect to PRC-sourced income, including gains derived from
the disposal of equity interests in a PRC resident enterprise, if such non-resident enterprise does not
have an establishment or place in Mainland China or has an establishment or place in Mainland China
but the PRC-sourced income is not connected with such establishment or place in Mainland China. As at
the Latest Practicable Date, no legislation has expressly provided that withholding tax shall be collected
from non-resident enterprises on their income derived by them from sale of the shares in Mainland
China companies listed on overseas stock exchange. However, the possibility cannot be entirely
excluded that taxation authorities will seek to collect withholding tax on such income in the future.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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Taxation Policy of Shanghai – Hong Kong Stock Connect
On October 31, 2014, the MOF, the SA T and the CSRC jointly issued the Notice on Taxation
Policies concerning the Pilot Program of an Interconnection Mechanism for Transaction in the
Shanghai and Hong Kong Stock Markets (ʝ
 ) (No. 81 [2014] of the MOF) (hereinafter referred to as
“Shanghai-Hong Kong Stock Connect Taxation Policy”). Enterprise income tax will be levied according
to law on transferring spread income (included in total income) derived from investment by mainland
enterprise investors in stocks listed on the Stock Exchange through Shanghai-Hong Kong Stock
Connect.
Taxation Policy of Shenzhen – Hong Kong Stock Connect
On November 5, 2016, the MOF, the SA T and the CSRC jointly issued the Notice on the Relevant
Taxation Policies for the Pilot Program of the Interconnection Mechanism for Transactions in the
Shenzhen and Hong Kong Stock Markets (ʝ
 ) (hereinafter referred to as “Shenzhen-Hong Kong Stock
Connect Taxation Policy”). Pursuant to the “Shenzhen-Hong Kong Stock Connect Taxation Policy,”
personal income tax will be temporarily exempted for transfer spread income derived from investment
by mainland individual investors in stocks listed on the Stock Exchange through Shenzhen-Hong Kong
Stock Connect from December 5, 2016 to December 4, 2019. Enterprise income tax will be levied
according to law on price difference (included in total income) derived from investment by mainland
enterprise investors in stocks listed on the Stock Exchange through Shenzhen-Hong Kong Stock
Connect.
Under the Announcement of the MOF, SA T and CSRC on Continuing to Implement the Relevant
Individual Income Tax Policy for the Shanghai- Hong Kong and Shenzhen-Hong Kong Mutual Stock
market Access Mechanism and mutual recognition between the Mainland and Hong Kong Funds݁
ʝႩ
ʮѓ ) ([2019] No. 93 of the MOF Announcement) came into effect on
December 5, 2019 and the Announcement on Extending the Implementation of the Individual Income
Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the Shenzhen- Hong Kong Stock
Connect and the Mainland-Hong Kong Mutual Recognition of Funds (ୃ
ʮѓ ) which promulgated on
August 21, 2023 and implemented on the same date from December 5, 2019 to December 31, 2027,
gains on price difference from transfer of shares derived by mainland individual investors through
investment into shares listed on the Stock Exchange via the Shanghai-Hong Kong Stock Connect shall
continue to be exempted from individual income tax.
For dividends and bonus income obtained by mainland individual investors investing in H stocks
listed on the Stock Exchange through Shenzhen-Hong Kong Stock Connect, the H-stock companies
shall apply to CSDCC for provision by CSDCC to the H-stock companies of the register of mainland
individual investors, and personal income tax shall be withheld by CSDCC at the tax rate of 20%.
Individual investors who have paid withholding tax overseas may apply for tax credit to the competent
tax authority of CSDCC by producing the tax credit document. For dividends and bonus income
obtained by mainland securities investment funds investing in stocks listed on the Stock Exchange
through Shenzhen-Hong Kong Stock Connect, personal income tax will be levied according to the
aforesaid provisions.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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--- page 608 ---
Enterprise income tax will be levied according to law on dividend and bonus income (included in
total income) obtained by mainland enterprise investors from investing in stocks listed on the Stock
Exchange through Shenzhen-Hong Kong Stock Connect. In particular, enterprise income tax will be
exempted according to law for dividend and bonus income obtained by mainland resident enterprises
which hold H stocks for at least 12 consecutive months. The H-stock companies listed on the Stock
Exchange shall apply to CSDCC for provision by CSDCC to the H-stock companies of the register of
mainland individual investors, and the H-stock companies will not withhold dividend and bonus income
tax for mainland enterprise investors. The tax payable shall be declared and paid by the enterprises
themselves.
Stamp Duty
Pursuant to the Stamp Duty Law of the People’s Republic of China ()
promulgated on June 10, 2021 and effective on July 1, 2022, the PRC stamp duty is applicable to the
entities and individuals that conclude taxable vouchers or conduct securities trading within the territory
of Mainland China, and the entities and individuals outside the territory of Mainland China that
conclude taxable vouchers that are used inside Mainland China. Therefore, the purchase and disposal of
H shares by non-PRC investors outside of Mainland China does not apply to the relevant provisions of
the Stamp Duty Law of the PRC ( ).
Estate Duty
Mainland China currently has not imposed any estate duty.
MAJOR TAXATION OF THE COMPANY IN THE PRC
Enterprise Income tax
The EIT Law and the EIT Rules provide that the EIT rate applicable to all enterprises, resident or
non-resident, shall be 25% generally.
Value-added tax
Pursuant to the Provisional Regulations on V alue-added Tax of the PRC (೼
ᅲБૢԷ ) amended by the State Council and became effective on November 19, 2017 and the Detailed
Rules for the Implementation of the Provisional Regulations on V alue-added Tax of the PRC (ʕശɛ͏
ۆamended by the MOF on October 28, 2011 and effective on
November 1, 2011, all entities and individuals in Mainland China engaging in the sale of goods, the
provision of processing, repairs and replacement services, and the importation of goods are required to
pay value-added tax. For taxpayers selling or importing goods, the general tax rate shall be 17% unless
otherwise specified in the aforesaid regulations.
According to the Notice on the Adjustment to VAT Rates ( ) (Cai
Shui [2018] No. 32), promulgated by the MOF and the State Administration of Taxation on April 4,
2018, and became effective as of May 1, 2018, the V A T rates of 17% and 11% applicable to the
taxpayers who have V A T taxable sales activities or imported goods are adjusted to 16% and 10%,
respectively.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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According to the Announcement on Relevant Policies for Deepening V alue-Added Tax Reform (ᗫ
ʮѓ ) (2019 No. 39 of MOF, State Administration of Taxation and
General Administration of Customs), promulgated by the MOF, the State Administration of Taxation
and the General Administration of Customs on March 20, 2019 and became effective on April 1, 2019,
the V A T rates of 16% and 10% applicable to the taxpayers who have V A T taxable sales activities or
imported goods are adjusted to 13% and 9%, respectively.
FOREIGN EXCHANGE ADMINISTRATION IN THE PRC
The lawful currency of the PRC is the Renminbi. The SAFE, authorized by the PBOC, is
empowered with the functions of administering all matters relating to foreign exchange, including the
enforcement of foreign exchange regulations.
On January 29, 1996, the State Council promulgated the Regulations of the PRC on the
Management of F oreign Exchanges (ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ ) (hereinafter referred to as the
“Regulations of the Management of Foreign Exchanges”) which became effective on April 1, 1996. The
Regulations of the Management of Foreign Exchanges classifies all international payments and transfers
into current account items and capital account items. Most of the current account items are no longer
subject to SAFE’s approval, while capital account items still are. The Regulations of the Management of
Foreign Exchanges were subsequently amended on January 14, 1997 and August 5, 2008. The latest
amendment to the Regulations of the Management of Foreign Exchanges clearly states that the State
will not impose any restriction on international current account payments and transfers.
On June 20, 1996, the PBOC promulgated the Circular of the People’s Bank of China on Issuing
the Provisions on the Settlement and Sale of and Payment in F oreign Exchange (Ι
) (No. 210 [1996] of the PBOC) (hereinafter referred to as the
“Settlement Provisions”) which became effective on July 1, 1996. The Settlement Regulations abolished
the remaining restrictions on convertibility of foreign exchange under current account items, while
retaining the existing restrictions on foreign exchange transactions under capital account items.
According to relevant laws and regulations of the PRC, PRC enterprises (including
foreign-invested enterprises) which require foreign exchange for transactions relating to current account
items, may, without the approval of SAFE, effect payment from their foreign exchange accounts at the
designated foreign exchange banks, on the strength of valid receipts and proof of transactions.
Foreign-invested enterprise that need to distribute profits to their shareholders in foreign exchange and
Chinese enterprise that need to pay fixed dividends in foreign exchange in accordance with the
requirements shall pay from its foreign exchange account or pay at the designated foreign exchange
bank by a resolution of the board of directors on the distribution of profits.
The Decisions of the State Council on a Group of Administrative Approval Items Cancelled or
Adjusted and Other Matters ( ) (No. 50
[2014] of the State Council) promulgated on October 23, 2014 has canceled the approval requirement of
the SAFE and it branches for the remittance and settlement of the proceeds raised from the overseas
listing of the foreign shares into RMB domestic accounts.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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--- page 610 ---
Pursuant to the Notice on Issues Concerning the F oreign Exchange Administration of Overseas
Listing ( ) ([2014] No. 54 of the SAFE)
issued by the SAFE on December 26, 2014, a domestic issuer shall, within 15 business days from
completion of its initial public offering overseas, register the overseas listing with the SAFE’s local
branch at the place of its incorporation. The proceeds from an overseas listing of a domestic issuer may
be remitted to a domestic account or deposited overseas, and the use of the proceeds shall be consistent
with the content of the document and other disclosure documents.
Pursuant to the Notice on Reforming and Regulating the Policies for the Administration of F oreign
Exchange Settlement under the Capital Accounts (ձ஝ᇍ༟͉ධͦഐි၍ଣ
) (No. 16 [2016] of the SAFE) promulgated by the SAFE on June 9, 2016, discretionary
settlement of foreign exchange capital income can be settled at the banks based on the actual operating
needs of the domestic companies. The proportion of discretionary settlement of foreign exchange
capital income for domestic companies is temporarily set at 100%. The SAFE may timely adjust the
above proportion based on international balance of payments.
Pursuant to the Notice of the State Administration of F oreign Exchange on Further Facilitating
Cross-border Trade and Investment ( )
(No. 28 [2019]), which was promulgated by the State Administration of Foreign Exchange on October
23, 2019, non-investment foreign-invested enterprises are permitted to use their capital funds to make
equity investments in Mainland China, provided that such investments do not violate the Special
Administrative Measures for the Access of Foreign Investment (Negative List) (ɝतй၍ଣ
݄( ૶ఊ )) and the target investment projects in Mainland China are genuine and in compliance
with laws.
APPENDIX III TAXA TION AND FOREIGN EXCHANGE
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PRC LA WS AND REGULATIONS
The PRC Legal System
The PRC legal system is based on the PRC Constitution (the “ Constitution ”) and is made up of
written laws, administrative regulations, local regulations, autonomous regulations, separate
regulations, rules and regulations of State Council departments, rules and regulations of local
governments, laws of special administrative regions and international treaties of which the PRC
Government is a signatory, and other regulatory documents. Court judgments do not constitute legally
binding precedents, although they are used for the purposes of judicial reference and guidance. The
Constitution is China’s fundamental law, formulated by the National People’s Congress (the “ NPC ”),
and has the highest legal effect.
The NPC and the Standing Committee of the NPC (the “ Standing Committee ”) are empowered to
exercise the legislative power of Mainland China. The NPC is responsible for formulating and amending
the basic laws governing civil and criminal matters, state organs and other matters. The Standing
Committee is empowered to formulate and amend laws other than those required to be enacted by the
NPC and may supplement and amend parts of laws enacted by the NPC during the adjournment of the
NPC, provided that such supplements and amendments are not in conflict with the basic principles of
such laws. The State Council is the highest administrative authority of the PRC and has the power to
formulate administrative regulations based on the Constitution and laws. The people’s congresses of
provinces, autonomous regions and municipalities and their respective standing committees may
formulate local regulations based on the specific circumstances and actual requirements of their own
respective administrative areas, provided that such local regulations do not violate any provision of the
Constitution, laws or administrative regulations. People’s congresses of national autonomous areas have
the power to enact autonomous regulations and separate regulations in light of the political, economic
and cultural characteristics of the ethnic groups in the areas concerned, provided that such autonomous
and separate regulations do not violate the basic principles of the laws or administrative regulations; No
adaptations shall be made to specific provisions on national autonomous areas contained in the
Constitution, autonomy law of national areas and other relevant laws and administrative regulations.
The people’s congresses of cities divided into districts and their respective standing committees may
formulate local regulations on aspects such as urban and rural construction and management,
environmental protection and historical and cultural protection based on the specific circumstances and
actual needs of such cities, provided that such local regulations do not contravene any provision of the
Constitution, laws, administrative regulations and local regulations of their respective provinces or
autonomous regions. If the law provides otherwise on the matters concerning formulation of local
regulations by cities divided into districts, those provisions shall prevail. Such local regulations will
become enforceable after being reported to and approved by the standing committees of the people’s
congresses of the relevant provinces or autonomous regions. The standing committees of the people’s
congresses of the provinces or autonomous regions examine the legality of local regulations submitted
for approval, and such approval should be granted within four months if they are not in conflict with the
Constitution, laws, administrative regulations and local regulations of such provinces or autonomous
regions. Where, during the examination for approval of local regulations of cities divided into districts
by the standing committees of the people’s congresses of the provinces or autonomous regions, conflicts
are identified with the rules and regulations of the people’s governments of the provinces or
autonomous regions concerned, a decision should be made by the standing committees of the people’s
congresses of provinces or autonomous regions to resolve the issue.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
–I V - 1–


--- page 612 ---
The ministries and commissions of the State Council, the People’s Bank of China, the National
Audit Office and the subordinate institutions with administrative functions directly under the State
Council may formulate departmental rules within the jurisdiction of their respective departments based
on the laws and administrative regulations, and the decisions and orders of the State Council. Provisions
of departmental rules should be the matters related to the enforcement of the laws and administrative
regulations, and the decisions and orders of the State Council. The people’s governments of the
provinces, autonomous regions, municipalities and cities or autonomous prefectures divided into
districts may formulate rules and regulations based on the laws, administrative regulations and local
regulations of such provinces, autonomous regions and municipalities.
According to the Constitution, the power to interpret laws is vested in the Standing Committee of
the NPC. Pursuant to the Resolution of the Standing Committee of the NPC Providing an Improved
Interpretation of the Law (䁑ᙄ ) passed on
June 10, 1981: issues related to the application of laws in a court trial should be interpreted by the
Supreme People’s Court, issues related to the application of laws in a prosecution process of a
procuratorate should be interpreted by the Supreme People’s Procuratorate, and the other issues related
to laws other than the above-mentioned should be interpreted by the State Council and the competent
authorities. The State Council and its ministries and commissions are also vested with the power to give
interpretations of the administrative regulations and departmental rules which they have promulgated.
At the regional level, the power to interpret regional laws is vested in the regional legislative and
administrative authorities which promulgate such laws.
The PRC Judicial System
Under the Constitution and the Law of Organization of the People’s Courts of the PRC (ʕശɛ
), the PRC judicial system is made up of the Supreme People’s Court, the
local people’s courts, the military courts and other special people’s courts. The local people’s courts are
divided into three levels, the basic people’s courts, the intermediate people’s courts and the higher
people’s courts. The basic people’s courts may set up civil, criminal and economic divisions, and certain
people’s courts based on the facts of the region, population and cases. The intermediate people’s courts
have divisions similar to those of the basic people’s courts and may set up other special divisions, such
as the intellectual property division, if needed. These two levels of people’s courts are subject to
supervision by people’s courts at higher levels. The Supreme People’s Court is the highest judicial
authority in the PRC. It supervises the administration of justice by the people’s courts at all levels and
special people’s courts. The Supreme People’s Procuratorate is authorized to supervise the judgment
and ruling of the people’s courts at all levels which have been legally effective, and the people’s
procuratorate at a higher level is authorized to supervise the judgment and ruling of a people’s court at
lower levels which have been legally effective.
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A people’s court takes the rule of the “final after two trails”, that is, the judgments or rulings of
the second instance at a people’s court are final. A party may appeal against the judgment or ruling of
the first instance of a local people’s court. The people’s procuratorate may present a protest to the
people’s court at the next higher level in accordance with the procedures stipulated by the laws. In the
absence of any appeal by the parties and any protest by the people’s procuratorate within the time limit
of appeal, the judgments or rulings of first instance of the people’s court are final. Judgments or rulings
of the second instance of the intermediate people’s courts, the higher people’s courts and the Supreme
People’s Court, and judgments or rulings of the first instance of the Supreme People’s Court are final.
However, if the Supreme People’s Court finds some definite errors in a legally effective judgment,
ruling or conciliation statement of the people’s court at any level, or if the people’s court at a higher
level finds such errors in a legally effective judgment, ruling or conciliation statement of the people’s
court at a lower level, it has the authority to review the case itself or to direct the lower-level people’s
court to conduct a retrial. If the chief judge of all levels of people’s courts finds some definite errors in a
legally effective judgment, ruling or conciliation statement, and considers a retrial is preferred, such
case shall be submitted to the judicial committee of the people’s court at the same level for discussion
and decision. The death penalty shall be reported to the Supreme People’s Court for approval, unless it
is judged by the Supreme People’s Court in accordance with the law.
The Civil Procedure Law of the PRC ( ) (the “ PRC Civil Procedure
Law ”) issued on April 9, 1991 by the Standing Committee of the NPC, last revised on September 1,
2023, and implemented on January 1, 2024, prescribes the conditions for instituting a civil action, the
jurisdiction of the people’s courts, the procedures for conducting a civil action, and the procedures for
enforcement of a civil judgment or ruling. All parties to a civil action conducted within Mainland China
must abide by the PRC Civil Procedure Law. A civil case is generally heard by the court located in the
defendant’s place of domicile. Parties to a dispute over a contract or any other right or interest in
property may, by a written agreement, choose the people’s court at the place of domicile of the
defendant, at the place where the contract is performed or signed, at the place of domicile of the
plaintiff, at the place where the subject matter is located or at any other place actually connected to the
dispute to have jurisdiction over the dispute, but the provisions regarding hierarchical jurisdiction and
exclusive jurisdiction shall not be violated.
A foreign individual, a person without nationality, a foreign enterprise or a foreign organization is
given the same litigation rights and obligations as a citizen, a legal person or other organizations of
Mainland China when initiating actions or defending against litigations at a PRC court. Should a foreign
court limit the litigation rights of citizens or enterprises in Mainland China, the PRC court may apply
the same limitations to the citizens and enterprises of such foreign country. A foreign individual, a
person without nationality, a foreign enterprise or a foreign organization must engage a lawyer in
Mainland China in case he or it needs to engage a lawyer for the purpose of initiating actions or
defending against litigations at a PRC court.
If any party to a civil action refuses to perform acts specified in a judgment or written order or any
other legal document in accordance with the execution notice, the people’s court may carry out
compulsory execution or entrust such performance to a relevant unit or other persons, and the person
subjected to execution shall bear the expenses thus incurred. The time limit for the submission of an
application for enforcement shall be two years. The termination or suspension of the time limit for the
submission of an application for enforcement shall be governed by the provisions on the termination or
suspension of the statute of limitation.
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In accordance with the international treaties to which the PRC is a signatory or participant or
according to the principle of reciprocity, a people’s court and a foreign court may request each other to
serve documents, conduct investigation and collect evidence and conduct other actions on its behalf. A
PRC court shall not accommodate any request made by a foreign court which will result in the violation
of sovereignty, security or public interests of Mainland China. Where a party applies for enforcement of
a legally effective judgment or ruling made by a people’s court, and the opposite party or his property is
not within the territory of the People’s Republic of China, the applicant may directly apply to a foreign
court with jurisdiction for recognition and enforcement of the judgment or ruling, or the people’s court
may, in accordance with the provisions of international treaties to which the PRC is a signatory or in
which the PRC is a participant or the principle of reciprocity, request recognition and enforcement by a
foreign court, unless the people’s court considers that the recognition or enforcement of such judgment
or ruling would violate the basic legal principles of the PRC, its sovereignty or national security or the
public’s interests.
The PRC company law, trial measures and guidelines for articles of association
The PRC Company Law (the “ Company Law ”) issued on December 29, 1993 by the Standing
Committee of the NPC, last revised on December 29, 2023, and came into effect on July 1, 2024
regulates companies to protect the legitimate rights and interests of companies, shareholders and
creditors.
The Trial Measures and its five interpretative guidelines promulgated by the CSRC on February
17, 2023 came into effect on March 31, 2023 and were applicable to the direct and indirect overseas
share subscription and listing of domestic companies.
According to the Trial Measures and its interpretative guidelines, where a domestic company
directly offering and listing overseas, it shall formulate its articles of association in line with the
Guidelines for Articles of Association of Listed Companies (ˏ), or the Guidelines
for Articles of Association, in place of the Mandatory Provisions for Articles of Association of
Companies to be Listed Overseas which ceased to apply from March 31, 2023. The Guidelines for
Articles of Association were promulgated by the CSRC on December 16, 1997 and last amended on
March 28, 2025.
Set out below is a summary of the major provisions of the Company Law, the Trial Measures and
the Guidelines for Articles of Association which are applicable to our Company.
General Provisions
A “joint stock limited company” (“ company ”) refers to a corporate legal person incorporated in
Mainland China under the PRC Company Law with independent legal person properties and
entitlements to such legal person properties. The liability of the company for its own debts is limited to
all the properties it owns and the liability of its shareholders for the company is limited to the extent of
the shares they subscribe for.
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Incorporation
A company may be incorporated by promotion or public subscription. A company may be
incorporated by 1 to 200 promoters, but at least half of the promoters must reside in Mainland China. A
company incorporated by promotion is the one with registered capital entirely subscribed for by the
promoters. Where a company is incorporated by public subscription, unless otherwise provided, the
promoters are required to subscribe for not less than 35% of the total shares of the company, and the
remaining shares can be listed to the public or specific parties.
For companies incorporated by way of promotion, the registered capital shall be the total capital
subscribed for by all promoters as registered with the relevant administrative bureau for industry and
commerce. Shares in the company shall not be issued to others unless the registered capital has been
fully paid up.
For companies incorporated by way of public subscription, the registered capital is the amount of
total paid-up capital as registered with the relevant administrative bureau for industry and commerce.
The promoters shall subscribe for the shares required to be subscribed for by them and pay up their
capital contributions. Procedures relating to the transfer of titles to non-monetary assets shall be duly
completed in accordance with laws if such assets are to be contributed as capital.
The promoters shall convene an inaugural meeting within 30 days after the issued shares have
been completely paid up and shall give notice to all subscribers or make a public announcement of the
date of the inaugural meeting 15 days prior to the meeting. The inaugural meeting may be convened
only with the presence of promoters and subscribers holding shares representing more than 50% of the
total issued shares of the company. Matters to be dealt with at the inaugural meeting include adopting
the draft articles of association proposed by the promoters and electing the board of directors and the
board of supervisors of the company. Any resolution of the meeting shall be approved by subscribers
with more than half of the voting rights of those present at the meeting.
Within 30 days after the conclusion of the inaugural meeting, the board of directors shall apply to
the registration authority for registration of the incorporation of the company. A company is formally
established and has the qualification of a legal person once the registration has been approved by the
relevant registration authority and a business license has been issued.
A company’s promoter shall be liable for the followings: the debts and expenses incurred in the
establishment process jointly and severally if the company cannot be incorporated; the refund of
subscription monies paid by the subscribers together with interest at bank rates of deposit for the same
period jointly and severally if the company cannot be incorporated; the compensation of any damages
suffered by the company as a result of the promoters’ fault in the course of its establishment.
Registered Shares
Under the Company Law, shareholders may make capital contributions in cash, or with
non-monetary property that may be valued in money and legally transferred, such as contribution in
kind or with an intellectual property rights or land use rights.
The Trial Measures provides that domestic enterprises that are listed overseas may raise funds and
distribute dividends in foreign currencies or Renminbi.
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Under the Trial Measures, for a domestic company directly offering and listing overseas,
shareholders of its domestic unlisted shares applying to convert such shares into shares listed and traded
on an overseas trading venue shall conform to relevant regulations promulgated by the CSRC, and
authorize the domestic company to file with the CSRC on their behalf. The domestic unlisted shares
mentioned in the preceding paragraph refer to the shares that have been issued by domestic enterprises
but have not been listed or listed for trading on domestic exchanges. Domestic unlisted shares shall be
centrally registered and deposited with domestic securities registration and settlement institutions. The
registration and settlement arrangements of overseas listed shares shall be subject to the provisions of
overseas listing places.
Under the Company Law, when a company issues shares in registered form, it shall maintain a
register of shareholders, stating the following matters: (i) the name and domicile of a shareholder; (ii)
the number of shares held by each shareholder; (iii) the serial number of the shares held by each
shareholder; and (iv) the date on which each shareholder acquired the shares.
Allotment and Issue of Shares
All issue of shares of a joint stock limited company shall be based on the principles of equality
and fairness. The same class of shares must carry equal rights. Shares issued at the same time and within
the same class must be issued on the same conditions and at the same price. It may issue shares at par
value or at a premium, but it may not issue shares below the par value.
Domestic enterprises issued and listed overseas shall file with the CSRC in accordance with Trial
Measures, submit filing reports, legal opinions and other relevant materials, and truthfully, accurately
and completely explain shareholder information and other information. Where a domestic enterprise
directly issues and is listed overseas, the issuer shall file with the CSRC. If a domestic enterprise is
indirectly listed overseas, the issuer shall designate a major domestic operating entity as the domestic
responsible person and file with the CSRC.
Increase in Share Capital
Under the Company Law, in the case of a joint stock limited company issuing new shares,
resolutions shall be passed at the shareholders’ general meeting in respect of the class and number of
new shares, the issue price of the new shares, the commencement and end dates for the issuance of new
shares and the class and number of the new shares proposed to be issued to existing shareholders. When
a company launches a public offering of new shares under the permission of the securities regulatory
authority of the State Council, it must publish a Prospectus for the new shares and financial and
accounting reports, and prepare the share subscription form. After payment in full for the new shares
issued, a company must change its registration with a company registration authority and make an
announcement accordingly.
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Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
(i) to prepare a balance sheet and a property list;
(ii) a company makes a resolution at shareholders’ general meeting to reduce its registered
capital;
(iii) a company shall inform its creditors within 10 days and publish an announcement in
newspapers or on the National Enterprise Credit Information Publicity System within 30
days after the approval of resolution of reducing registered capital;
(iv) the creditors shall have the right to require a company to repay its debts or provide
corresponding guarantees within 30 days after receiving the notice or within 45 days after
the announcement if the creditors have not received the notice;
(v) when a company reduces its registered capital, it shall register the change with a company
registration authority in accordance with the law.
Share Buy-Back
No company shall purchase its own shares other than in any of the following circumstances:
1. reduces its registered capital;
2. merge with a company which is one of its existing shareholders;
3. use of its shares for carrying out an employee stock ownership plan or equity incentive plan;
4. requests from shareholders who object to a resolution of a shareholders’ general meeting on
merger or division of the company to acquire their shares by the company;
5. use of shares for conversion of convertible corporate bonds issued by a listed company; or
6. the share buyback is necessary for a listed company to maintain its company value and
protect its shareholders’ equity.
Any company’s purchase of its own shares for any reason specified in Items 1 and 2 of the
preceding paragraph shall be subject to a resolution of the general meeting; any company’s purchase of
its own shares for any reason specified in Items 3, 5 and 6 of the preceding paragraph may be subject to
a resolution of the board meeting with more than two thirds of directors present, according to the
provisions of the Articles of Associations or upon authorization by the general meeting.
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Following any company’s purchase of its own shares pursuant to the first paragraph of this Article,
the company shall, in the event of a purchase made pursuant to Item 1, cancel the relevant shares within
ten days of the purchase, or in the event of a purchase made pursuant to Item 2 or 4, transfer or cancel
the relevant shares within six months of the purchase, or in the event of a purchase made pursuant to
Item 3, 5 or 6, hold a total number of its own shares not more than 10% of the total shares issued by the
company and transfer or cancel the relevant shares within three years of the purchase.
Any company that purchases its own shares shall perform the information disclosures obligations
specified in the Securities Law of the PRC. Any purchase of its own shares by a listed company in the
event of Item 3, 5, or 6 of the first paragraph of this Article shall be made by way of a public centralized
trading.
No company may take a pledge of its own stock.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations Shareholders’ transfer of shares must be made on a stock exchange established in
accordance with the law or in other ways prescribed by the State Council. Shareholders’ transfer of
registered shares must be endorsed or otherwise prescribed by laws or administrative regulations.
Transfer of bearer shares requires delivery of the stock to the assignee.
Under the Company Law, the shares issued by the company before the public offering of shares
cannot be transferred within one year from the date of listing of the company’s shares on the stock
exchange. The directors, supervisors and senior management of the company shall not transfer more
than 25.0% of their respective company shares during their term of office and shall not transfer any of
their company shares within one year from the company’s listing date.
Shareholders
The company’s articles of association set forth the rights and duties of its shareholders, which are
binding on all shareholders. Pursuant to the Company Law and the Mandatory Provisions, the rights of
shareholders include:
• the right to attend shareholders’ general meetings in person or by proxy and to vote in
respect of the number of shares held;
• the right to transfer their shares in accordance with the applicable laws, regulations and the
company’s articles of association;
• the right to inspect the company’s articles of association, share register, counterfoil of
company debentures, minutes of shareholders’ general meetings, resolutions of board
meetings, resolutions of meetings of the board of supervisors and financial and accounting
reports and to make proposals or enquires on the company’s business operations;
• where a resolution passed by shareholders’ general meetings or the board of directors
violates the articles of association or infringe the lawful rights and interests of shareholders,
the right to institute an action in a people’s court demanding the cessation of such unlawful
infringement;
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• the right to receive dividends based on the number of shares held; and
• any other rights of shareholders specified in the company’s articles of association;
The obligations of a shareholder include: to abide by the company’s articles of association, to pay
the subscription monies in respect of the shares subscribed for; to be liable for the company’s debts and
liabilities to the extent of the amount of subscription monies agreed to be paid in respect of the shares
subscribed for; not to abuse the shareholders’ rights to prejudice the interests of the company or other
shareholders thereof; not to abuse the independent status of the company as a legal person and a joint
stock limited company to prejudice the interests of the creditor(s) of the company; and any other
obligations specified in the company’s articles of association.
Shareholders’ General Meetings
The general meeting is the organ of authority of the company, which exercises its powers in
accordance with the Company Law. The general meeting may exercise its powers:
• to elect and dismiss the directors and supervisors (not being representative(s) of employees)
and to decide on the matters relating to the remuneration of directors and supervisors;
• to review and approve the reports of the board of directors;
• to review and approve the reports of the supervisory board;
• to review and approve the company’s profit distribution proposals and loss recovery
proposals;
• to decide on any increase or reduction of the company’s registered capital;
• to decide on the issue of corporate bonds;
• to decide on merger, division, dissolution and liquidation of the company or change of its
corporate form;
• to amend the company’s articles of association; and
• to exercise any other authority stipulated in the articles of association.
A shareholders’ general meeting is required to be held once every year. An extraordinary general
meeting is required to be held within two months of the occurrence of any of the following:
• the number of directors is less than the number stipulated by the Company Law or less than
two-thirds of the number specified in the articles of association;
• the outstanding losses of the company amounted to one-third of the company’s total paid-in
share capital;
• shareholders individually or in aggregate holding 10% or more of the company’s shares
request that an extraordinary general meeting is convened;
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• the board deems necessary;
• the supervisory board proposes to hold; or
• any other circumstances as provided for in the articles of association.
A shareholders’ general meeting shall be convened by the board of directors and presided over by
the chairman of the board of directors. In the event that the chairman is incapable of performing or is
not performing his duties, the meeting shall be presided over by the vice chairman. In the event that the
vice chairman is incapable of performing or is not performing his duties, a director nominated by half or
more of the directors shall preside over the meeting. Where the board of directors is incapable of
performing or is not performing its duties to convene the general meeting, the supervisory board shall
convene and preside over shareholders’ general meeting in a timely manner. If the supervisory board
fails to convene and preside over shareholders’ general meeting, shareholders individually or in
aggregate holding 10% or more of the company’s shares for 90 days or more consecutively may
unilaterally convene and preside over shareholders’ general meeting.
In accordance with the Company Law, a notice of annual general meeting shall be given to all
shareholders 20 days prior to the meeting. A notice of extraordinary general meeting shall be given to
all shareholders 15 days prior to the meeting.
In accordance with the Company Law, shareholders alone or in aggregate holding more than 1% of
the shares of the company may put forth proposals and submit the same in writing to the board of
directors 10 days before a general meeting. The board of directors shall notify other shareholders within
2 days after receiving such proposals, and submit the interim proposals to the general meeting for
review and approval if such proposals are within the scope of its duties and powers.
Under the Company Law, shareholders present at a shareholders’ general meeting have one vote
for each share they hold, save that the company’s shares held by the company are not entitled to any
voting rights.
An accumulative voting system may be adopted for the election of directors and supervisors at the
general meeting pursuant to the provisions of the articles of association or a resolution of the general
meeting. Under the accumulative voting system, each share shall be entitled to the number of votes
equivalent to the number of directors or supervisors to be elected at the general meeting, and
shareholders may consolidate their votes for one or more directors or supervisors when casting a vote.
Under the Company Law and the Guidelines for Articles of Association, the passing of any
resolution requires affirmative votes of shareholders representing more than half of the voting rights
represented by the shareholders who attend the shareholders’ general meeting. Matters relating to
merger, division or dissolution of a company, increase or reduction of registered capital, change of
corporate form or amendments to the articles of association must be approved by more than two-thirds
of the voting rights held by the shareholders present at the meeting.
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Board
A company shall have a board, which shall consist of at least 3 members. The term of a director
shall be stipulated in the articles of association, provided that no term of office shall last for more than
three years. A director may serve consecutive terms if re-elected. A director shall continue to perform
his/her duties as a director in accordance with the laws, administrative regulations and the articles of
association until a duly reelected director takes office, if re-election is not conducted in a timely manner
upon the expiry of his/her term of office or if the resignation of directors results in the number of
directors being less than the quorum.
Under the Company Law, the board of directors may exercise its powers:
• to convene shareholders’ general meetings and report on its work to the shareholders’
general meetings;
• to implement the resolutions of the general meetings;
• to decide on the company’s operational plans and investment proposals;
• to formulate the company’s profit distribution proposals and loss recovery proposals;
• to formulate proposals for the increase or reduction of the company’s registered capital and
the issue of corporate bonds;
• to formulate proposals for the merger, division or dissolution of the company or change of
corporate form;
• to decide on the setup of the company’s internal management organs;
• to appoint or dismiss the company’s manager and decide on his/her remuneration and, based
on the manager’s recommendation, to appoint or dismiss any deputy general manager and
financial officer of the company and to decide on their remunerations;
• to formulate the company’s basic management system; and
• to exercise any other authority stipulated in the articles of association.
Meetings of the board of directors shall be convened at least twice each year. Notices of meeting
shall be given to all directors and supervisors 10 days before the meeting. Interim board meetings may
be proposed to be convened by shareholders representing more than 10% of the voting rights, more than
one-third of the directors or the supervisory board. The chairman shall convene the meeting within 10
days of receiving such proposal and preside over the meeting. The board may otherwise determine the
means and the period of notice for convening an interim board meeting. Meetings of the board of
directors shall be held only if more than half of the directors are present. Resolutions of the board shall
be passed by more than half of all directors. Each director shall have one vote for a resolution to be
approved by the board. Directors shall attend board meetings in person. If a director is unable to attend
for any reason, he/she may appoint another director to attend the meeting on his/her behalf by a written
power of attorney specifying the scope of authorizations.
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If a resolution of the board of directors violates the laws, administrative regulations or the articles
of association or resolutions of the general meeting, and as a result of which the company sustains
serious losses, the directors participating in the resolution are liable to compensate the company.
However, if it can be proved that a director expressly objected to the resolution when the resolution was
voted on, and that such objection was recorded in the minutes of the meeting, such director shall be
relieved from that liability.
Under the Company Law, the following person may not serve as a director in a company:
• a person who is unable or has limited ability to undertake any civil liability;
• a person who has been convicted of an offense of corruption, bribery, embezzlement,
misappropriation of property or destruction of the socialist economic order, or who has been
deprived of his political rights due to his crimes, in each case where less than five years have
elapsed since the date of completion of the sentence, or a person who was given a suspended
sentence, where less than two years have elapsed since the expiration of the probation;
• a person who has been a former director, factory manager or manager of a company or an
enterprise that has entered into insolvent liquidation and who was personally liable for the
insolvency of such company or enterprise, where less than three years have elapsed since the
date of the completion of the bankruptcy and liquidation of the company or enterprise;
• a person who has been a legal representative of a company or an enterprise that has had its
business license revoked due to violations of the law or has been ordered to close down by
law and the person was personally responsible, where less than three years have elapsed
since the date of such revocation; and
• a person who is listed as a defaulter by a people’s court since he/she is liable for relatively
large amount of debt that is overdue.
Where a company elects or appoints a director to which any of the above circumstances applies,
such election or appointment shall be null and void. A director to which any of the above circumstances
applies during his/her term of office shall be released of his/her duties by the company.
Under the Company Law, the board shall appoint a chairman and may appoint a vice chairman.
The chairman and the vice chairman shall be elected with approval of more than half of all the directors.
The chairman shall convene and preside over board meetings and review the implementation of board
resolutions. The vice chairman shall assist the chairman to perform his/her duties. Where the chairman
is incapable of performing or is not performing his/her duties, the duties shall be performed by the vice
chairman. Where the vice chairman is incapable of performing or is not performing his/her duties, a
director nominated by more than half of the directors shall perform his/her duties.
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Supervisory Board
A company may have a supervisory board composed of not less than three members. Each term of
office of a supervisor is three years and he/she may serve consecutive terms if reelected. A supervisor
shall continue to perform his/her duties as a supervisor in accordance with the laws, administrative
regulations and the articles of association until a duly re-elected supervisor takes office, if re-election is
not conducted in a timely manner upon the expiry of his/her term of office or if the resignation of
supervisors results in the number of supervisors being less than the quorum.
The supervisory board shall consist of representatives of the shareholders and an appropriate
proportion of representatives of the company’s staff, of which the proportion of representatives of the
company’s staff shall not be less than one-third, and the actual proportion shall be determined in the
articles of association. Representatives of the company’s staff at the supervisory board shall be
democratically elected by the company’s staff at the staff representative assembly, general staff meeting
or otherwise. Directors and senior management shall not act concurrently as supervisors. The
supervisory board shall appoint a chairman and may appoint a vice chairman. The chairman and the vice
chairman of the supervisory board shall be elected by more than half of the supervisors.
The chairman of the supervisory board shall convene and preside over supervisory board meetings.
Where the chairman of the supervisory board is incapable of performing or is not performing his/her
duties, the vice chairman of the supervisory board shall convene and preside over supervisory board
meetings. Where the vice chairman of the supervisory board is incapable of performing or is not
performing his/her duties, a supervisor recommended by more than half of the supervisors shall convene
and preside over supervisory board meetings.
The supervisory board may exercise its powers:
• to review the company’s financial position;
• to supervise the directors and senior management in their performance of their duties and to
propose the removal of directors and senior management who have violated laws,
regulations, the articles of association or resolutions of the shareholders’ general meetings.
• when the acts of director or senior management personnel are detrimental to the company’s
interests, to require the director and senior management to correct these acts;
• to propose the convening of extraordinary shareholders’ general meetings and to convene and
preside over shareholders’ general meetings when the board fails to perform the duty of
convening and presiding over shareholders’ general meetings under the Company Law;
• to submit proposals to the shareholders’ general meetings;
• to bring actions against directors and senior management personnel pursuant to the relevant
provisions of the Company Law; and
• to exercise any other authority stipulated in the articles of association.
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Supervisors may be present at board meetings and make inquiries or proposals in respect of the
resolutions of the board. The supervisory board may investigate any irregularities identified in the
operation of the company and, when necessary, may engage an accounting firm to assist its work at the
cost of the company.
Manager and Senior Management
Under the Company Law, a company shall have a manager who shall be appointed or removed by
the board of directors. The manager is responsible to the board of directors and exercise his/her
functions and powers according to the provisions of the articles of association or the authorization of
the board of directors. The manager attends the meetings of the board of directors as a non-voting
member.
According to the Company Law, senior management refers to the manager, deputy manager,
financial officer, secretary to the board of a listed company, and other personnel as stipulated in the
articles of association.
Duties of Directors, Supervisors, General Managers and Other Senior Management
Directors, supervisors and senior management are required under the Company Law to comply
with the relevant laws, administrative regulations and the articles of association, and carry out their
duties of loyalty and diligence. Directors, supervisors and senior management are prohibited from
abusing their authority in accepting bribes or other unlawful income and from misappropriating the
company’s property. Directors and senior management are prohibited from:
• embezzling the company’s property or misappropriating company funds;
• depositing company funds into accounts under their own names or the names of other
individuals to deposit;
• giving bribes or accepting any other illegal proceeds by taking advantage of their power;
• accepting commissions paid by a third party for transactions conducted with the company;
• unauthorized divulgence of confidential information of the company; and
• other acts in violation of their duty of loyalty to the company.
If any director, supervisor or senior management directly or indirectly concludes a contract or
conducts a transaction with the company, he/she shall report the matters relating to the conclusion of the
contract or transaction to the board of directors or shareholders’ general meeting, subject to the
approval of the board of directors or shareholders’ general meeting by a resolution according to the
articles of association.
The provisions of the preceding paragraph shall apply if any close relatives of directors,
supervisors or senior management, or any of the enterprises directly or indirectly controlled by
directors, supervisors or senior management or any of their close relatives, or any parties otherwise
having related-party relationship with directors, supervisors or senior management, concludes a
contract or conducts a transaction with the company.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
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--- page 625 ---
Neither director, supervisor or senior management may take advantage of his/her position to seek
any business opportunity that belongs to the company for himself/herself or any other person except
under any of the following circumstances:
(i) where he/she has reported to the board of directors or the shareholders’ meeting and has been
approved by a resolution of the board of directors or the shareholders’ meeting according to
the Articles of Association;
(ii) where the company cannot make use of the business opportunity as stipulated by laws,
administrative regulations or the Articles of Association.
A director, supervisor or senior management who contravenes law, administrative regulation or
articles of association in the performance of his/her duties resulting in any loss to the company shall be
liable to the company for compensation.
Where a director, supervisor or senior management is required to attend a shareholders’ general
meeting, such director, supervisor or senior management shall attend the meeting and answer the
inquiries from shareholders.
Finance and Accounting
A company shall establish its own financial and accounting systems according to the laws,
administrative regulations and the regulations of the competent financial departments of the State
Council. At the end of each financial year, a company shall prepare a financial report which shall be
audited by an accounting firm in accordance with the laws. The financial and accounting reports shall be
prepared in accordance with the laws, administrative regulations and the regulations of the financial
departments of the State Council.
The company’s financial reports shall be made available for shareholders’ inspection at the
company 20 days before the convening of an annual general meeting. A joint stock limited company that
makes public stock offerings shall publish its financial reports.
When distributing each year’s profits after taxation, the company shall set aside 10% of its profits
after taxation for the company’s statutory common reserve fund until the fund has reached 50% or more
of the company’s registered capital. When the company’s statutory common reserve fund is not
sufficient to make up for the company’s losses for the previous years, the current year’s profits shall
first be used to make good the losses before any allocation is set aside for the statutory common reserve
fund. After the company has made allocations to the statutory common reserve fund from its profits
after taxation, it may, upon passing a resolution at a shareholders’ general meeting, make further
allocations from its profits after taxation to the discretionary common reserve fund. After the company
has made good its losses and made allocations to its discretionary common reserve fund, the remaining
profits after taxation shall be distributed in proportion to the number of shares held by the shareholders,
except for those which are not distributed in a proportionate manner as provided by the articles of
association.
Profits distributed to shareholders by a resolution of a shareholders’ general meeting or the board
of directors before losses have been made good and allocations have been made to the statutory common
reserve fund in violation of the requirements described above must be returned to the company. The
company shall not be entitled to any distribution of profits in respect of shares held by it.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
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--- page 626 ---
The premium over the nominal value of the shares of the company earned from the issue of share
and other income as required by CSRC to be treated as the capital reserve fund shall be accounted for as
the capital reserve fund. The common reserve fund of a company shall be applied to make good the
company’s losses, expand its business operations or increase its capital. When using a company’s
reserves to cover its losses, any discretionary reserve and statutory reserve balances shall first be used
to cover such losses; if there is still a shortfall, the capital reserve may be used in accordance with
regulations. Upon the transfer of the statutory common reserve fund into capital, the balance of the fund
shall not be less than 25% of the registered capital of the company before such transfer.
The company shall have no accounting books other than the statutory books. The company’s assets
shall not be deposited in any account opened under the name of an individual.
Appointment and Dismissal of Accounting Firms
Pursuant to the Company Law, the engagement or dismissal of an accounting firm responsible for
the company’s auditing shall be determined by a shareholders’ general meeting or the board of directors
in accordance with the articles of association. The accounting firm should be allowed to make
representations when the general meeting or the board of directors conduct a vote on the dismissal of
the accounting firm. The company should provide true and complete accounting evidence, accounting
books, financial and accounting reports and other accounting information to the engaged accounting
firm without any refusal or withholding or falsification of information.
The Guidelines for Articles of Association provides that the company guarantees to provide true
and complete accounting vouchers, accounting books, financial accounting reports and other accounting
materials to the employed accounting firm, and shall not refuse, conceal or falsely report. And the audit
fee of the accounting firm shall be decided by the general meeting of shareholders.
Profit Distribution
Under the Company Law, a company shall not distribute profits before losses are covered and the
statutory reserve fund is drawn.
Dissolution and Liquidation
Under the Company Law, a company shall be dissolved for any of the following reasons:
• the term of its operation set out in the articles of association has expired or other events of
dissolution specified in the articles of association have occurred;
• the shareholders have resolved at a shareholders’ general meeting to dissolve the company;
• the company is dissolved by reason of its merger or division;
• the business license of the company is revoked or the company is ordered to close down or to
be dissolved in accordance with the laws; or
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
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--- page 627 ---
• the company is dissolved by a people’s court in response to the request of shareholders
holding shares that represent more than 10% of the voting rights of all shareholders of the
company, on the grounds that the operation and management of the company has suffered
serious difficulties that cannot be resolved through other means, rendering ongoing existence
of the company a cause for significant losses to the shareholders.
If the company encounters the reasons for dissolution as stipulated in the preceding paragraph, it
shall publicize the reasons for dissolution through the National Enterprise Credit Information Publicity
System within ten days.
In the event of first point above, the company may carry on its existence by amending its articles
of association. The amendments to the articles of association in accordance with the provisions
described above shall require the approval of more than two-thirds of voting rights of shareholders
attending a shareholders’ general meeting.
Where the company is dissolved under the circumstances set forth in paragraph 1, 2, 4 or 5 above,
it should establish a liquidation committee within 15 days of the date on which the dissolution matter
occurs. The liquidation committee shall be composed of directors or any other person determined by a
shareholders’ general meeting. If a liquidation committee is not established within the prescribed
period, the company’s creditors may file an application with a people’s court to appoint relevant
personnel to form a liquidation committee to administer the liquidation. The people’s court should
accept such application and form a liquidation committee to conduct liquidation in a timely manner.
The sort out committee may exercise following powers during the liquidation:
• to sort out the company’s assets and to prepare a balance sheet and an inventory of assets;
• to notify the company’s creditors or publish announcements;
• to deal with any outstanding business related to the liquidation;
• to pay any overdue tax together with any tax arising during the liquidation process;
• to settle the company’s claims and liabilities;
• to handle the company’s remaining assets after its debts have been paid off; and
• to represent the company in any civil procedures.
The liquidation committee shall notify the company’s creditors within 10 days of its establishment
and publish an announcement in newspapers or on the National Enterprise Credit Information Publicity
System within 60 days.
A creditor shall lodge his claim with the liquidation committee within 30 days of receipt of the
notification or within 45 days of the date of the announcement if he has not received any notification. A
creditor shall report all matters relevant to his claimed creditor’s rights and furnish relevant evidence.
The liquidation committee shall register such creditor’s rights. The liquidation committee shall not
make any settlement to creditors during the period of the claim.
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--- page 628 ---
Upon disposal of the company’s property and preparation of the required balance sheet and
inventory of assets, the liquidation committee shall draw up a liquidation plan and submit this plan to a
shareholders’ general meeting or a people’s court for endorsement. The remaining part of the company’s
assets, after payment of liquidation expenses, employee wages, social insurance expenses and statutory
compensation, outstanding taxes and the company’s debts, shall be distributed to shareholders in
proportion to shares held by them. The company shall continue to exist during the liquidation period,
although it cannot conduct operating activities that are not related to the liquidation. The company’s
property shall not be distributed to shareholders before repayments are made in accordance with the
requirements described above.
Upon liquidation of the company’s property and preparation of the required balance sheet and
inventory of assets, if the liquidation committee becomes aware that the company does not have
sufficient assets to meet its liabilities, it must apply to a people’s court for a declaration of bankruptcy
in accordance with the laws. After the people’s court accepts the application for bankruptcy, the
liquidation committee shall hand over the liquidation matters to the bankruptcy administrator
designated by the people’s court.
Members of the liquidation committee shall fulfill liquidation responsibilities with a duty of
loyalty and diligence.
Any member of the liquidation committee who neglects to fulfill his/her liquidation duties, thus
causing any loss to the company shall be liable for compensation, and any member of the liquidation
committee who cause any loss to any creditor due to his/her intentional or gross negligence shall be
liable for compensation.
Upon completion of the liquidation, the liquidation committee shall prepare a liquidation report to
be submitted to the shareholders’ general meeting or a people’s court for confirmation, and submit to
the company registration authority to apply for cancelation of the company’s registration.
Overseas Listing
According to the Trial Measures, where an issuer makes an overseas initial public offering or
listing, it shall file with the CSRC within 3 working days after submitting the application documents for
overseas issuance and listing. If an issuer issues securities in the same overseas market after overseas
issuance and listing, it shall file with the CSRC within 3 working days after the completion of the
issuance. If an issuer issues and lists in other overseas markets after overseas issuance and listing, it
shall be filed in accordance with the provisions of the first paragraph of this article. Moreover, if the
filing materials are complete and meet the requirements, the CSRC shall complete the filing within 20
working days from the date of receiving the filing materials, and publicize the filing information
through the website. If the filing materials are incomplete or do not meet the requirements, the CSRC
shall inform the issuer of the materials to be supplemented within 5 working days after receiving the
filing materials. The issuer shall supplement the materials within 30 working days.
Loss of Share Certificates
shareholder may, in accordance with the public notice procedures set out in the PRC Civil
Procedure Law, apply to a people’s court if his share certificate(s) in registered form is either stolen,
lost or destroyed, for a declaration that such certificate(s) will no longer be valid. After the people’s
court declares that such certificate(s) will no longer be valid, the shareholder may apply to the company
for the issue of a replacement certificate(s).
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
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--- page 629 ---
Suspension and Termination of Listing
The Company Law has deleted provisions governing suspension and termination of listing. The
PRC Securities Law (2019 revision) (ج2019ࠈࡌ) ) has also deleted
provisions regarding suspension of listing. Where listed securities fall under the delisting circumstances
stipulated by the stock exchange, the stock exchange shall terminate its listing and trading in
accordance with the business rules.
According to the Trial Measures, in case of active or compulsory termination of listing, the issuer
shall report the specific situation to the CSRC within 3 working days from the date of occurrence and
announcement of the relevant matters.
The PRC Securities Laws, Regulations and Regulatory Regimes
The PRC has promulgated a number of regulations that relate to the issue and trading of the Shares
and disclosure of information of companies. In October 1992, the State Council established the
Securities Committee and CSRC. The Securities Committee is responsible for coordinating the drafting
of securities regulations, formulating securities-related policies, planning the development of securities
markets, directing, coordinating and supervising all securities-related institutions in Mainland China
and administering CSRC. CSRC is the regulatory arm of the Securities Committee and is responsible for
the drafting of regulatory provisions governing securities markets, supervising securities companies,
regulating public offerings of securities by PRC companies in Mainland China or overseas, regulating
the trading of securities, compiling securities-related statistics and undertaking relevant research and
analysis. In April 1998, the State Council consolidated the Securities Committee and CSRC and
reformed CSRC.
On April 22, 1993, the State Council promulgated the Provisional Regulations Concerning the
Issue and Trading of Shares (၍ଣᅲБૢԷ ) governing the application and approval
procedures for public offerings of shares, issuance of and trading in shares, the acquisition of listed
companies, deposit, clearing and transfer of shares, the disclosure of information, investigation,
penalties and dispute resolutions with respect to a listed company.
On December 25, 1995, the State Council promulgated the Regulations of the State Council
Concerning Domestic Listed F oreign Shares of Joint Stock Limited Companies (ࠢ
 ). These regulations principally govern the issue, subscription, trading
and declaration of dividends and other distributions of domestic listed foreign shares and disclosure of
information of joint stock limited companies having domestic listed foreign shares.
The Securities Law of the PRC () (the “ PRC Securities Law ”) was
enacted by the Standing Committee of the NPC on December 29, 1998, which became effective on July
1, 1999 and was latest revised on December 28, 2019. It was the first national securities law in the PRC,
and is divided into 14 chapters and 226 articles comprehensively regulating activities in Mainland China
securities market, including the issue and trading of securities, takeovers by listed companies, securities
exchanges, securities companies and the duties and responsibilities of the State Council’s securities
regulatory authorities. Article 224 of the PRC Securities Law provides that domestic enterprises issuing
securities overseas directly or indirectly or listing their securities overseas shall comply with the
relevant provisions of the State Council. Currently, the issue and trading of foreign issued securities
(including shares) are principally governed by the regulations and rules promulgated by the State
Council and CSRC.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
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--- page 630 ---
Arbitration And Enforcement Of Arbitral Awards
Under the Arbitration Law of the People’s Republic of China (), or the
Arbitration Law, amended by the Standing Committee of the NPC on September 1, 2017 and effective
on January 1, 2018, the Arbitration Law is applicable to economic disputes involving foreign parties,
and all parties have entered into a written agreement to refer the matter to an arbitration committee
constituted in accordance with the Arbitration Law. An arbitration committee may, before the
promulgation by the PRC Arbitration Association of arbitration regulations, formulate interim
arbitration rules in accordance with relevant regulations under the Arbitration Law and the PRC Civil
Procedure Law. Where both parties have agreed to settle disputes by means of arbitration, the people’s
court will refuse to take legal action brought by a party in the people’s court.
Under the Arbitration Law, an arbitral award is final and binding on the parties. If a party fails to
comply with an award, the other party to the award may apply to the people’s court for enforcement
according to the PRC Civil Procedure Law. A people’s court may refuse to enforce an arbitral award
made by an arbitration commission if there is any procedural irregularity (including irregularity in the
composition of the arbitration committee or the making of an award on matters beyond the scope of the
arbitration agreement or the jurisdiction of the arbitration commission). A party seeking to enforce an
arbitral award of foreign arbitration commission against a party who or whose property is not within
Mainland China shall apply to a foreign court with jurisdiction over the case for recognition and
enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognized and
enforced by the people’s court in accordance with the principles of reciprocity or any international
treaty concluded or acceded to by Mainland China.
According to the Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral
Awards between the Mainland and the Hong Kong Special Administrative Region (׵
τર ) promulgated by the Supreme People’s Court on
January 24, 2000 and effective on February 1, 2000, and the Supplementary Arrangement of the
Supreme People’s Court on Mutual Enforcement of Arbitral Awards between the Mainland and the Hong
Kong Special Administrative Region (ٙ
໾̂τર) promulgated by the Supreme People’s Court on November 26, 2020 and effective on
November 27, 2020, awards made by PRC arbitral authorities can be enforced in Hong Kong SAR, and
Hong Kong SAR arbitration awards are also enforceable in Mainland China.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -20 –


--- page 631 ---
MATERIAL DIFFERENCES BETWEEN CERTAIN ASPECTS OF COMPANY LA W IN THE PRC
AND HONG KONG SAR
Hong Kong company law is primarily set out in the Companies Ordinance and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, supplemented by common law and rules of
equity that apply to Hong Kong SAR. As a joint stock limited company incorporated in the PRC that is
seeking a listing of shares on the Stock Exchange, we are governed by the Company Law and all other
rules and regulations promulgated pursuant to the Company Law. Set out below is a summary of certain
material differences between Hong Kong company law and the Company Law. This summary is,
however, not intended to be an exhaustive comparison.
Corporate Existence
Under Hong Kong company law, a company with share capital shall be incorporated by the
Registrar of Companies in Hong Kong which issues a certificate of incorporation of the company upon
its incorporation, and the company will acquire an independent corporate existence. A company may be
incorporated as a public company or a private company. Pursuant to the Companies Ordinance, the
articles of association of a private company incorporated in Hong Kong SAR shall contain certain
pre-emptive provisions. A public company’s articles of association do not contain such pre-emptive
provisions.
Under the Company Law, a joint stock limited company may be incorporated by promotion or
public subscription.
Share Capital
The Company Law does not provide for authorized share capital. The share capital of a company
incorporated in Hong Kong SAR would be its issued share capital. The full proceeds of a share issue
will be credited to share capital and becomes the company’s share capital. Under Hong Kong SAR law,
the directors of a Hong Kong SAR company may, with the prior approval of the shareholders if required,
issue new shares of the company.
The Company Law does not provide for authorized share capital. The Company’s registered
capital is the amount of its issued share capital. Any increase in the company’s registered capital must
be approved by the general meeting and shall be approved by/filed with the relevant PRC governmental
and regulatory authorities (if applicable).
Under the Company Law, the shares may be subscribed for in the form of money or non-monetary
assets (other than assets not entitled to be used as capital contributions under relevant laws or
administrative regulations). For non-monetary assets to be used as capital contributions, appraisals must
be carried out to ensure there is no overvaluation or undervaluation of the assets. There is no such
restriction on a company incorporated in Hong Kong SAR.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
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--- page 632 ---
Restrictions on Shareholding and Transfer of Shares
Under the PRC law, A Shares of the company, which are denominated and subscribed for in
Renminbi, can be subscribed for and traded by PRC investors, qualified overseas institutional investors
or qualified overseas strategic investors, while also being eligible securities under the Northbound
Trading Link, A Shares of the company can be subscribed for and traded by Hong Kong SAR and other
overseas investors in accordance with the rules and limits of Shenzhen-Hong Kong Stock Connect.
Overseas listed shares, which are denominated in Renminbi and subscribed for in a currency other than
Renminbi, may only be subscribed for, and traded by, investors from Hong Kong SAR, Macau SAR and
Taiwan or any country and territory outside Mainland China, or qualified domestic institutional
investors, except as allowed under Tentative Regulatory Measures for Qualified Domestic Institutional
Investors Investing in Overseas Securities ( ). If the
H shares are eligible securities under the Southbound Trading Link, they are also subscribed for and
traded by PRC investors in accordance with the rules and limits of Shanghai-Hong Kong Stock Connect
or Shenzhen-Hong Kong Stock Connect.
Under the Company Law, a promoter of a joint stock limited company is not allowed to transfer
the shares it holds for a period of one year after the date of establishment of the company. Shares in
issue prior to a public offering of the company cannot be transferred within one year from the listing
date of the shares on a stock exchange. Shares in a joint stock limited company held by its directors,
supervisors and senior management and transferred each year during their term of office shall not
exceed 25% of the total shares they held in a company, and the shares they held in a company cannot be
transferred within one year from the listing date of the shares, and also cannot be transferred within half
a year after the said personnel has left office. The articles of association may set other restrictive
requirements on the transfer of a company’s shares held by its directors, supervisors and senior
management.
There are no restrictions on shareholdings and transfers of shares under Hong Kong SAR law apart
from (i) the restriction on the company to issue additional Shares within 6 months after the Global
Offering, and (ii) the prohibition of controlling shareholders from disposing of shares within 12 months
after the lockup.
Notice of General Meetings
Under the Company Law, notice of an annual general meeting must be given not less than 20 days
before the meeting. Whereas notice of an extraordinary general meeting must be given not less than 15
days before the meeting.
For a limited company incorporated in Hong Kong SAR, the notice period for an annual general
meeting is at least 21 days and in any other case, at least 14 days.
Quorum for General Meetings
The Company Law does not specify any quorum requirement for a general meeting.
Under Hong Kong SAR law, the quorum for a general meeting is two members, unless the articles
of association of a company specifies otherwise or the company has only one member, in which case the
quorum is one.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -22 –


--- page 633 ---
V oting at General Meetings
Under the Company Law, the passing of any resolution requires more than one-half of the
affirmative votes held by the shareholders present in person or by proxy at a general meeting except in
cases such as proposed amendments to the articles of association, increase or decrease of registered
capital, merger, division, dissolution or change in the form of the company, which require two-thirds of
the affirmative votes cast by shareholders present in person or by proxy at a general meeting.
Under Hong Kong SAR law, an ordinary resolution is passed by a simple majority of affirmative
votes cast by shareholders present in person, or by proxy, at a general meeting, and a special resolution
is passed by not less than three-fourths of affirmative votes casted by shareholders present in person, or
by proxy, at a general meeting.
Variation of Class Rights
The Company Law has no specific provision relating to variation of class rights. However, the
Company Law states that the State Council can promulgate requirements relating to other kinds of
shares.
Under the Companies Ordinance, no rights attached to any class of shares can be varied except (i)
with the passing of a special resolution by the shareholders of the relevant class at a separate meeting
sanctioning the variation, (ii) with the written consent of shareholders representing at least three-fourths
of the total voting rights of shareholders of the relevant class, or (iii) if there are provisions in the
articles of association relating to the variation of those rights, then in accordance with those provisions.
Derivative Action by Minority Shareholders
Under Hong Kong SAR company law, minority shareholders may, with the leave of the Court, start
a derivative action against directors who have committed a breach of their fiduciary duties to the
company, if such directors control a majority of votes at a general meeting, thereby effectively
preventing a company from suing the directors in breach of their duties in its own name.
Under the Company Law, in the event where the directors and senior management of a joint stock
limited company violate laws, administrative regulations or the articles of association, resulting in
losses to the company, the shareholders individually or in aggregate holding over 1% of the company’s
shares for more than 180 consecutive days may request in writing the supervisory committee to initiate
proceedings in the people’s court. In the event that the supervisors violate as such, the above said
shareholders may send written request to the board of directors to initiate proceedings in the people’s
court. Upon receipt of such written request from the shareholders, if the supervisory committee or the
board of directors refuses to initiate such proceedings, or has not initiated proceedings within 30 days
upon receipt of the request, or if under urgent situations, failure of initiating immediate proceeding may
cause irremediable damages to the company, the above said shareholders shall, for the benefit of the
company’s interests, have the right to initiate proceedings directly to the court in their own name.
In addition, the Guidelines for Articles of Association of Listed Companies provide other remedies
against the Directors, Supervisors and senior management who breach their duties to the Company.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -23 –


--- page 634 ---
Minority Shareholder Protection
Under the Companies Ordinance, a shareholder who alleges that the affairs of a company
incorporated in Hong Kong SAR are conducted in a manner unfairly prejudicial to his/her interests may
petition to the Court to make an appropriate order to give relief to the unfairly prejudicial conduct. In
addition, on the application of a specified number of members, the Financial Secretary of Hong Kong
SAR may appoint inspectors who are given extensive statutory powers to investigate the affairs of a
company incorporated or registered in Hong Kong SAR.
The Company Law provides that any shareholders holding 10% or above of voting rights held by
all shareholders of company may request a people’s court to dissolve the company to the extent that the
operation or management of the company experiences any serious difficulties and its continuous
existence would cause serious losses to them, and no other alternatives can resolve such difficulties.
Directors
The Company Law, unlike Hong Kong SAR company law, does not contain any requirements
relating to the declaration of directors’ interests in material contracts, restrictions on directors’
authority in making major dispositions, restrictions on companies providing certain benefits to directors
and indemnification in respect of directors’ liability as well as prohibitions against compensation for
loss of office without shareholders’ approval. The Guidelines for Articles of Association of Listed
Companies, however, contain certain requirements and restrictions on major disposals and specify the
circumstances under which a director shall be liable for making compensation.
Supervisory Committee
Under the Company Law, a joint stock limited company’s directors and senior management are
subject to the supervision of a supervisory committee. There is no mandatory requirement for the
establishment of a supervisory committee for a company incorporated in Hong Kong SAR.
The Guidelines for Articles of Association of Listed Companies provide that Supervisors shall
abide by laws, administrative regulations and the Articles of Association, and shall owe fiduciary and
due diligence duties to the Company. Supervisors shall not abuse their authority by accepting bribes or
other illegal income, nor shall they convert company property.
Fiduciary Duties
In Hong Kong SAR, directors owe fiduciary duties to the company, including the duty not to act in
conflict with the company’s interests. Furthermore, the Companies Ordinance has codified the
directors’ statutory duty of care.
Under the Company Law, directors, supervisors, managers and other senior management personnel
of a company have the duty of loyalty and diligence to the company. Such persons shall abide by the
articles of association of the company, perform their duties honestly and diligently, safeguard the
interests of the company, and shall not use their position and authority in the company for their personal
gain.
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HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
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--- page 635 ---
Financial Disclosure
Under the Company Law, a joint stock limited company is required to make available at the
company for inspection by shareholders its financial report 20 days before its annual general meeting.
In addition, a joint stock limited company of which the shares are publicly offered must publish its
financial report.
The Companies Ordinance requires a company incorporated in Hong Kong SAR to send to every
shareholder a copy of its financial statements, auditors’ report and directors’ report, which are to be
presented before the company in its annual general meeting, not less than 21 days before such meeting.
According to the PRC laws, a company shall prepare its financial and accounting reports as at the end of
each accounting year, and submit the same to accounting firms for auditing as required by law.
Information on Directors and Shareholders
The Company Law gives shareholders the right to inspect the company’s articles of association,
register of shareholders, minutes of the general meetings, resolution at the board meeting, resolution at
the meeting of supervisory committee and financial and accounting reports. Under the articles of
association, shareholders have the right to inspect and copy (at reasonable charges) certain information
on shareholders and on directors which is similar to the rights of shareholders of Hong Kong SAR
companies under the Companies Ordinance.
Corporate Reorganization
Corporate reorganization involving a company incorporated in Hong Kong SAR may be effected in
a number of ways, such as a transfer of the whole or part of the business or property of the company in
the course of voluntary winding up to another company pursuant to Section 237 of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance or a compromise or arrangement between the
company and its creditors or between the company and its members pursuant to Section 673 and
Division 2 of Part 13 of the Companies Ordinance, which requires the sanction of the court. In addition,
subject to the shareholders’ approval, an intra-group wholly-owned subsidiary may also be
amalgamated horizontally or vertically under the Companies Ordinance.
Under the PRC law, merger, division, dissolution of the company or change in the form of the
company has to be approved by shareholders attending the general meeting and holding two-thirds or
more of the voting rights.
Mandatory Transfers
Under the Company Law, a company is required to make transfers equivalent to certain prescribed
percentages of its after tax profit to the statutory reserve fund. There are no corresponding provisions
under Hong Kong SAR law.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -25 –


--- page 636 ---
Remedies of a Company
Under the Company Law, if a director, supervisor or senior management in carrying out his duties
infringes any law, administrative regulation or the articles of association of a company, which results in
damage to the company, that director, supervisor or manager should be responsible to the company for
such damages.
The Listing Rules require listed companies’ articles of association to provide for remedies of the
company similar to those available under Hong Kong SAR law (including rescission of the relevant
contract and recovery of profits from a director, supervisor or senior management).
Dividends
Pursuant to relevant PRC laws and regulations, a company in certain circumstances shall withhold,
and pay to the relevant tax authorities, any tax payable on any dividends or other distributions payable
to a shareholder.
Under the Company Law and Hong Kong SAR laws, dividends once declared will become debts
payable to shareholders. Under Hong Kong SAR law, the limitation period for an action to recover a
debt (including the recovery of declared dividends) is six years, whereas under the PRC laws, the
relevant limitation period is three years. The company must not exercise its powers to forfeit any
unclaimed dividend in respect of shares until after the expiry of the applicable limitation period.
Closure of Register of Shareholders
The Companies Ordinance provides that the register of shareholders of a company must not be
closed for the registration of transfers of shares for more than thirty days (extendable to sixty days in
certain circumstances) in a year, whereas, as required by the PRC Law, share transfers shall not be
registered within 20 days before the date of convening a general meeting or within five days before the
base date of distribution of dividends.
SUMMARY OF MATERIAL DIFFERENCES BETWEEN THE HONG KONG LISTING RULES
AND SHENZHEN STOCK EXCHANGE LISTING RULES
As our A Shares are listed on the SZSE, we are also subject to the Shenzhen Stock Exchange
Listing Rules. Set out below is a summary of the material differences between the Hong Kong Listing
Rules and the Shenzhen Stock Exchange Listing Rules.
Periodic Financial Reporting
There are material differences in financial reporting standards and practices regarding, for
example, industry-specific financial reporting requirements, announcement of preliminary results, form
and content of periodic financial reports and post-vetting of periodic financial reports.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -26 –


--- page 637 ---
Classification and Disclosure Requirements for Notifiable Transactions
The method of classification of notifiable transactions under the Hong Kong Listing Rules and the
disclosure requirement pertaining to such transactions differ from those under the Shenzhen Stock
Exchange Listing Rules.
Connected Transactions
The definition of a connected person under the Hong Kong Listing Rules and the definition of a
related party under the Shenzhen Stock Exchange Listing Rules are different. In addition, the disclosure
and shareholder approval requirements for connected transactions under the Hong Kong Listing Rules
and for related party transactions and shareholders’ approval requirements under the Shenzhen Stock
Exchange Listing Rules, as well as the respective exemptions are different.
Disclosure of inside information
The scope, timing and method of disclosure of inside information are different between the Hong
Kong Listing Rules and Shenzhen Stock Exchange Listing Rules.
APPENDIX IV SUMMARY OF PRINCIPAL PRC AND
HONG KONG SAR LEGAL AND REGULATORY PROVISIONS
– IV -27 –


--- page 638 ---
This Appendix mainly provides investors with an overview of the Articles of Association. As the
following information is in summary form, it does not contain all the information that may be important
to investors.
SHARES AND REGISTERED CAPITAL
The shares of the Company shall be issued in an open, fair and equal manner. Each share of the
same class shall rank pari passu with each other. Shares of a class in each issuance shall be issued under
the same terms and at the same price. Each of the shares shall be subscribed for at the same price by any
entity or individual.
INCREASE, DECREASE, REPURCHASE AND TRANSFER OF SHARES
Increase and Decrease of Shares
According to the operation and development needs of the Company, subject to the laws and
regulations, the Company may increase the capital by the following ways upon approval of special
resolutions at the Shareholders’ general meeting:
(i) Public issuance of shares;
(ii) Non-public issuance of shares;
(iii) Distribution of bonus shares to existing shareholders;
(iv) Converting the reserve funds into share capital;
(v) Other means approved by the laws, administrative regulations or approved by the CSRC.
Our Company may decrease our registered share capital and shall comply with the procedures
stipulated in Company Law of the PRC and the Articles of Association.
Repurchase of Shares
Company shall not to repurchase its own shares, unless otherwise under the circumstances:
(i) Reduce our Company’s registered capital;
(ii) Merger with other companies which hold our shares;
(iii) Using the shares as an employee stock ownership plan or equity incentive plan;
(iv) Purchasing its shares from Shareholders who have voted against the resolutions on the
merger or division of the Company at a Shareholders’ general meeting upon their request;
(v) Use of shares for conversion of convertible corporate bonds issued by the Company;
(vi) Necessary for the Company to maintain its value and protect the interests of the
shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 1–


--- page 639 ---
A resolution shall be passed at the Shareholders’ general meeting when the Company is to
repurchase its own shares under the circumstances (i) and (ii) set out above. In case of the
circumstances stipulated in (iii), (v) and (vi) above, a resolution of the Company’s Board shall be
passed by more than two-thirds of the Directors attending the Board meeting. After the Company has
repurchased its own shares in accordance with the circumstances above, the shares so repurchased shall
be canceled within ten days from the date of purchase (under the circumstance set out in (i) above), or
shall be transferred or canceled within six months (under the circumstances set out in (ii) and (iv)
above). If the Company repurchases its shares under the circumstances set out in (iii), (v) and (vi)
above, the total number of shares held by the Company shall not exceed 10% of the total issued shares
of the Company, and such shares shall be transferred or canceled within three years.
If the share repurchase is made under the circumstances stipulated in (iii), (v) or (vi) above, it
shall be conducted by way of open centralized trading at stock exchange or by way of offer.
Transfer of Shares
Shares of the Company held by the founders shall not be transferred within one year from the date
of incorporation of the Company. Shares of the Company that were issued prior to a public issue shall
not be transferred within one year from the date on which shares of the Company are listed and traded
on the stock exchange.
The Directors, Supervisors and senior management of the Company shall notify the Company of
their holdings of shares in the Company and the changes therein. The shares transferrable by them
during each year of their tenures shall not exceed 25% of their total holdings of shares in the Company.
The shares in the Company held by them shall not be transferred within one year from the date on which
the Company’s shares are listed for trading. The shares in the Company held by them shall not be
transferred within half a year from their departure from the Company. Where the listing rules of the
place where the Company’s shares are listed provide otherwise in respect of the restrictions on the
transfer, such rules shall prevail.
Any gains from sale of Company’s shares or other securities with an equity nature by the
Directors, Supervisors and senior management members or shareholders holding 5% or more of the
Company’s shares within six months after their purchase of the same, and any gains from the purchase
of the shares or other securities with an equity nature by any of the aforesaid parties within six months
after sale of the same shall be disgorged and paid to the Company, and the Board of Directors of the
Company shall be responsible for recovering such gains from the abovementioned parties. However, a
securities company which holds 5% or more of the Company’s shares as a result of its undertaking of
the untaken shares in an offer, sale those Company’s shares shall not be subject to the six-month time
limit as set out above.
Shares or other securities with the nature of equity held by Directors, Supervisors, senior
executives and individual shareholders as mentioned in the preceding paragraph include shares or other
securities with the nature of equity held by their spouses, parents or children, or held by them by using
other people’s accounts.
If the Board of Directors of the Company fails to comply with the above paragraph of this Article,
the Shareholders are entitled to request the Board of Directors to do so within 30 days. If the Board of
Directors of the Company fails to comply within the aforesaid period, the Shareholders are entitled to
initiate litigation directly in the People’s Court in their own names for the interest of the Company. And
if the Board of Directors fails to implement the provisions set forth in this Article, the responsible
Directors shall bear joint and several liability in accordance with law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 2–


--- page 640 ---
SHAREHOLDERS AND SHAREHOLDERS’ GENERAL MEETINGS
Shareholders
The Company shall make a register of shareholders in accordance with evidentiary documents
provided by the securities registration authorities. The register of Shareholders is sufficient evidence to
prove that the Shareholders hold the Company’s Shares. The original register of Shareholders of H
shares is kept in Hong Kong SAR and is available for inspection by Shareholders, but the Company may
suspend the registration of Shareholders in accordance with applicable laws and regulations and the
securities regulatory rules of the place where the Company’s Shares are listed. Shareholders shall enjoy
rights and assume obligations according to the class of shares they hold. Shareholders holding shares of
the same class shall enjoy the same rights and assume the same obligations.
The rights of our shareholders are as follows:
(i) To receive distribution of dividends and other forms of benefits according to the number of
shares held;
(ii) To legally require, convene, preside over, participate in or authorize proxies of Shareholders
to attend the General Meeting and exercise corresponding voting rights;
(iii) To supervise operational activities of our Company, provide suggestions or submit queries;
(iv) To transfer, grant and pledge the Company’s shares held according to the provisions of the
laws, administrative regulations and the Articles of Association;
(v) To read the Articles of Association, the list of Shareholders, Company bond stubs, General
Meeting minutes, resolutions of meetings of the Board of Directors, resolutions of meetings
of the Board of Supervisors and financial and accounting reports;
(vi) To participate in the distribution of the remaining assets of our Company according to the
proportion of shares held upon our termination or liquidation;
(vii) To require our Company to acquire the shares from Shareholders voting against any
resolutions adopted at the General Meeting concerning the merger and division of the
Company;
(viii) Other rights conferred by laws, administrative regulations, regulations of the authorities,
regulatory rules where our Company’s shares are listed, or the Articles of Association.
Where any Shareholder demands to read the relevant information or obtain any of the aforesaid
materials, he shall submit to the Company written documents proving the class(es) and number of shares
he holds. The Company shall provide the relevant information or materials in accordance with the
Shareholder’s demand after verifying the Shareholder’s identity.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 3–


--- page 641 ---
In the event that any resolution of the Shareholders’ general meeting or resolution of the Board of
Directors violates laws or administrative regulations, the Shareholder is entitled to request the People’s
Court to deem it as invalid. In the event that the convening procedure or voting method of the
Shareholders’ general meeting or the Board meeting violates any of laws, administrative regulations or
the Articles of Association, or any resolution of which violates the Articles of Association, the
Shareholder is entitled to request the People’s Court to overturn the resolution within 60 days upon the
resolution was adopted.
The obligations of Shareholders are as follows:
(i) To abide by laws, administrative regulations and the Articles of Association;
(ii) To provide Share capital according to the Shares subscribed for and Share participation
methods;
(iii) Not to return Shares unless prescribed otherwise in laws and administrative regulations;
(iv) Not to abuse Shareholders’ rights to infringe upon the interests of the Company or other
Shareholders; not to abuse the Company’s status as an independent legal entity or the limited
liability of Shareholders to damage the interests of the Company’s creditors;
Any company Shareholder who abuses Shareholders’ rights and causes the Company or other
Shareholders to suffer a loss shall be liable for making compensation in accordance with the law. Any
Shareholder who abuses the status of the Company as an independent legal entity or the limited liability
of Shareholders to evade debts and seriously damages the interests of the Company’s creditors shall
assume joint and several liability for the Company’s debts.
The controlling Shareholders and actual controllers of the Company shall not use their connected
relationship to damage the legitimate interests of the Company; Who violate Articles of Association and
cause losses to the Company shall be liable for compensation.
Controlling Shareholders and ultimate controllers of the Company shall have a duty of care to the
Company and Public Shareholders. Controlling Shareholders shall exercise their investors’ rights in
strict accordance with the law and shall not damage the lawful interests of the Company or of public
Shareholders in any way such as via the distribution of profits, an asset reorganization, external
investments, the use of Company’s funds or the provision of a loan guarantee, nor shall they abuse their
controlling positions to damage the interests of the Company or of public Shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 4–


--- page 642 ---
General Provisions for Shareholders’ General Meetings
The General Meetings are divided into annual general Shareholders’ meetings and extraordinary
general Shareholders’ meetings. The annual general shareholders’ meeting shall be convened once a
year and be held within six months of the end of the previous fiscal year.
The Shareholders’ general meeting is the organ of authority of the Company, which exercises its
powers in accordance with the PRC Company Law:
(i) To decide on the Company’s operational policies and investment plans;
(ii) To elect or remove the Directors and Supervisors (other than the employee representatives)
and to decide on matters relating to the remuneration of Directors and Supervisors;
(iii) To examine and approve reports of the Board of Directors;
(iv) To examine and approve reports of the Board of Supervisors;
(v) To examine and approve the Company’s proposed annual financial budget and final accounts;
(vi) To examine and approve the Company’s proposals for profit distribution plans and loss
recovery plans;
(vii) To decide on any increase or decrease of the Company’s registered capital;
(viii) To decide on the issue of corporate bonds by the Company;
(ix) To decide on matters such as merger, division, dissolution and liquidation or change of
corporate form of the Company;
(x) To amend the Articles of Association;
(xi) Resolution on appointment and dismissal of an accounting firm by the Company;
(xii) To examine and approve the provision of guarantees stipulated in Article 42;
(xiii) To examine matters relating to the purchases and disposals of the Company’s material assets
within one year, which exceed 30% of the Company’s latest audited total assets;
(xiv) To examine and approve matters relating to changes in the use of proceeds;
(xv) To examine and approve the equity incentive plans and employee stock ownership plans;
(xvi) To examine other matters as required by the laws, administrative regulations, departmental
rules, the Articles of Association of the Company or the securities regulatory rules of the
place where the Company’s shares are listed, which shall be decided by the Shareholders’
general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 5–


--- page 643 ---
The external guarantee matters of the Company shall be submitted to the Board of Directors or the
General Meeting for deliberation. The following acts of external guarantee of the Company shall be
submitted to the General Meeting for deliberation and approval:
(i) Any guarantee to be provided after the total amount of external guarantees provided by the
Company and the subsidiaries it controls has at least or exceeded 50% of the Company’s net
assets as audited in the latest period;
(ii) Any guarantee to be provided after the total amount of external guarantees provided by the
Company and the subsidiaries it controls has at least or exceeded 30% of the Company’s total
assets as audited in the latest period;
(iii) The amount of guarantee provided by the company within one year exceeds 30% of the latest
audited total assets of the company;
(iv) Any guarantee to be provided for a party whose ratio of liabilities to assets exceeds 70%;
(v) The single guarantee for an amount more than 10% of the Company’s net assets audited in
the latest period;
(vi) The guarantee to be provided to a Shareholder, or to an ultimate controller or related party
thereof;
(vii) Other guarantees required by the relevant laws or administrative regulations and the
securities regulatory rules in the jurisdiction where the shares of the Company are listed that
shall be considered by the Shareholders’ general meeting.
The guarantee in item (2) of the preceding paragraph shall be approved by special resolution at the
General Meeting.
The Company shall convene an extraordinary general meeting within two months from the date of
the occurrence of any of the following circumstances:
(i) The number of directors is less than 5 or less than two-thirds of the number prescribed in
these Articles of Association;
(ii) The uncovered losses of our Company reach one-third of its total paid-in share capital;
(iii) The Shareholders with 10% or more shares of the Company separately or jointly request;
(iv) The Board of Directors considers it necessary;
(v) The Board of Supervisors proposes that such a meeting shall be held;
(vi) Other circumstances conferred by the laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s shares are listed and the
Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 6–


--- page 644 ---
Convening of Shareholders’ General Meetings
Shareholders who individually or collectively hold more than 10% of the shares of the Company
shall have the right to request the Board of Directors to convene an extraordinary general meeting, and
shall submit such request in writing to the Board of Directors. The Board of Directors shall in
accordance with the provisions of laws, administrative regulations and the Articles of Association,
provide written feedback on whether or not to convene the extraordinary general meeting within 10 days
after receiving the request.
Where the Board of Directors agrees to convene an extraordinary general meeting, it shall issue a
notice of convening the general meeting within 5 days after the resolution of the Board of Directors is
made, and changes to the original request in the notice shall be subject to the consent of the relevant
shareholders. Where the Board of Directors does not agree to convene an extraordinary general meeting,
or fails to give feedback within 10 days after receiving the request, shareholders who individually or
collectively hold more than 10% of the Company’s shares have the right to propose to the Board of
Supervisors to hold an extraordinary general meeting, and shall make a written request to the Board of
Supervisors.
Where the Board of Supervisors agrees to convene an extraordinary general meeting, it shall issue
a notice of convening the general meeting within 5 days of receiving the request, and any changes to the
original request in the notice shall be subject to the consent of the relevant shareholders. Where the
Board of Supervisors fails to issue a notice of the general meeting within the prescribed time limit, it
shall be deemed that the Board of Supervisors has not convened and presided over the general meeting,
and shareholders who individually or collectively hold more than 10% of the Company’s shares for
more than 90 consecutive days may convene and preside over it on their own.
Where the Board of Supervisors or shareholders decide to convene a Shareholders’ general
meeting by themselves, they shall notify the Board of Directors in writing and file with the relevant
branch office of the CSRC where the Company locates and SZSE at the same time. Prior to the
announcement of the resolution of the Shareholders’ general meeting, the shareholding ratio of the
convening shareholders shall not be less than 10%. The Board of Supervisors or the convening
shareholders shall submit relevant supporting materials to the relevant branch office of the CSRC where
the Company locates and SZSE when issuing the notice of the general meeting and the announcement of
the resolutions of the Shareholders’ general meeting.
The expenses necessary for the Shareholders’ general meeting convened by the Board of
Supervisors or the shareholders themselves shall be borne by the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 7–


--- page 645 ---
Notice of Shareholders’ General Meeting
The notice of a Shareholders’ general meeting includes the following:
(i) The time, place and duration of the meeting;
(ii) The matters and proposals to be discussed at the meeting;
(iii) In plain language: all Shareholders have the right to attend the general meeting of
shareholders, and may entrust a proxy in writing to attend the meeting and vote. Such a
proxy does not need to be a shareholder of the Company;
(iv) The shareholding registration date of the Shareholders entitled to attend the general meeting;
(v) name and telephone number of the permanent contact person for conference affairs;
(vi) Timing and Procedures of V oting by Internet and Otherwise.
The convener shall notify all Shareholders by way of announcement 21 days prior to the convening
of the annual general meeting, and each Shareholder shall be notified by way of announcement 15 days
prior to the convening of the extraordinary general meeting.
Proposals at Shareholders’ General Meetings
The Board of Directors, the Board of Supervisors and Shareholders who individually or jointly
hold more than 3% of the shares of the Company shall have the right to put forward proposals to the
Company. Shareholders who individually or collectively hold more than 3% of the shares of the
Company may submit an interim proposal in writing to the convener 10 days prior to the convening of
the Shareholders’ general meeting. The convener shall issue a supplementary notice of the
Shareholders’ general meeting within 2 days after receiving the proposal, and announce the contents of
the interim proposal. Where the Shareholders’ general meeting is postponed in accordance with the
requirements of the securities regulatory rules of the place where the Company’s shares are listed due to
the issuance of a supplementary notice of the Shareholders’ general meeting, the convening of the
Shareholders’ general meeting shall be postponed in accordance with the provisions of the securities
regulatory rules of the place where the Company’s shares are listed.
Proxy for the Shareholders’ General Meeting
A shareholder may attend and vote at the shareholders’ general meeting in person or by proxy.
Individual shareholders attending the meeting in person shall present their personal identity cards
or other valid certificates or documents or proof of shareholding. Proxies attending the meeting shall
present their personal identity cards and the proxy statements from the shareholder.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 8–


--- page 646 ---
Corporate shareholders shall be represented by its legal representative or proxies authorized by the
legal representative. Legal representatives attending the meeting shall present their personal identity
cards or valid documents that can prove its identity as the legal representative. Proxies authorized to
attend the meeting shall present their personal identity cards or the written proxy statement legally
issued by the legal representative of the legal person shareholder, except for shareholders who are a
recognized clearing house as defined in the relevant ordinances in force from time to time under the
laws of Hong Kong SAR or the securities regulatory rules of the place where the shares of the Company
are listed (hereinafter referred to as the “ Recognized Clearing House ”) or its proxy.
If the shareholder is a Recognized Clearing House (or their proxies), the shareholder may
authorize its company representative or one or more persons as it deems appropriate to act as its
representative at any General Meeting or any class of shareholders; however, if more than one person is
authorized, the power of attorney shall specify the number and class of shares in respect of which each
such person is so authorized. A person so authorized may act on behalf of the Recognized Clearing
House (or their proxies) as if such person were an individual shareholder of the Company (without
presenting a shareholding certificate, notarized authorization and/or further evidence confirming its
duly authorization).
V oting at the Shareholders’ General Meeting
The resolutions of the Shareholders’ meeting divided into ordinary resolutions and special
resolutions. An ordinary resolution at a shareholders’ general meeting shall be passed by more than half
of the voting rights held by the shareholders present at the shareholders’ general meeting (including
proxies). A special resolution at a shareholders’ general meeting shall be passed by at least two-thirds of
the voting rights held by the shareholders present at the shareholders’ general meeting (including
proxies).
Shareholders (including proxies) shall exercise voting rights based on the number of shares with
voting rights held by them, and each share shall be entitled to one vote.
Where material issues affecting the interests of minority shareholders are considered at the
shareholders’ general meeting, the votes of minority shareholders shall be counted separately. The
separate votes counting results shall be disclosed publicly in a timely manner.
The shares held by the Company shall have no voting right, and shall not be included in the total
number of shares with voting rights of shareholders present at the shareholders’ general meeting. If a
shareholder purchases shares with voting rights of the Company in violation of the provisions of Article
63(1) and (2) of the Securities Law, the voting rights of such shares in excess of the prescribed
proportion shall not be exercised and shall not be counted towards the total number of shares with
voting rights present at the shareholders’ general meeting for thirty-six months after the purchase.
If any shareholder, under applicable laws and regulations and Hong Kong Listing Rules, is
required to abstain from voting on any particular matter being considered or is restricted to voting only
for or only against any particular matter being considered, any votes cast by or on behalf of such
shareholder in contravention of such requirement or restriction shall not be counted.
The Board of Directors, independent Directors, shareholders holding more than one per cent of the
shares with voting rights or investor protection agencies established in accordance with laws as the
solicit person. Except for statutory conditions, the Company shall not impose minimum shareholding
restrictions on the solicitation of voting rights.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
–V - 9–


--- page 647 ---
The resolution of the General Meeting includes ordinary resolution and special resolution. The
following matters shall be approved by the General Meeting through ordinary resolutions:
(i) Work report of the Board of Directors and the Board of Supervisors;
(ii) Plans of earnings distribution and loss make-up schemes drafted by the Board of Directors;
(iii) Appointment or dismissal of the members of the Board of Directors and the Board of
Supervisors, and their payment and payment methods;
(iv) Annual budgets plan and final accounts plan of the Company;
(v) Annual report of the Company;
(vi) Other matters other than those approved by special resolution stipulated in the laws,
administrative regulations, securities regulatory rules of the place where the Company’s
Shares are listed or the Articles of Association.
The following matters shall be approved by special resolution at the General Meeting:
(i) The increase or reduction of the registered capital of the Company;
(ii) The division, spin-off, merger, dissolution and liquidation of the Company or change of
company form;
(iii) Any amendment to the Articles of Association;
(iv) Purchase or sale of significant assets within a year which exceeds 30% of the Company’s
audited total assets for the latest period;
(v) Share option incentive plan;;
(vi) Spin-off Subsidiary Listing;
(vii) Issuance of shares, convertible corporate bonds, preferred Stock or other category of
securities recognize by the CSRC;
(viii) Repurchase of Shares for Purpose of Reduction of Registered Capital;
(ix) Significant asset reorganization;
(x) A resolution of the Shareholders’ general meeting of the Company to voluntarily withdraw
the listing of its shares from trading on the SZSE and/or the Hong Kong Stock Exchange, and
to decide not to trade on the Exchange or to apply for trading or transfer of its shares to other
trading venues;
(xi) Other matters as required by the laws, administrative regulations, other securities regulatory
rules of the place where the Company’s Shares are listed and the Articles of Association, and
matters approved by ordinary resolution of the General Meeting which are believed could
materially affect our Company and need to be approved by special resolution.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -10 –


--- page 648 ---
DIRECTORS AND BOARD OF DIRECTORS
Directors
Directors’ term of office shall be three years. Upon expiration of the term, the Director may be
re-elected. Director can be senior management personnel. However, provided that the total number of
Directors who concurrently serve as Senior Management Members shall not exceed half (1/2) of the
total number of Directors of the Company.
The Company has independent directors and the Board of Directors should not be less than three
or one-third independent directors.
The directors shall abide by laws, administrative regulations and the Articles of Association, and
bear fiduciary obligations towards the Company:
(i) Shall not abuse their authority to accept bribes or other illegal income and shall not
misappropriate the properties of the Company.;
(ii) Shall not misappropriate company funds;
(iii) The assets of the Company shall not be deposited in any personal account;
(iv) Shall not, in violation of the Articles of Association, loan Company’s funds to any other
person or provide guarantees to any other person without the approval of the General
Meeting or the Board of Directors;
(v) Shall not conclude any contract or engage in any transaction with the Company either in
violation of the Articles of Association or without the approval of the General Meeting;
(vi) Shall not use the advantages provided by their own positions to pursue business opportunities
that properly belong to the Company to engage in the same business as the Company either
for their own account or for the account of any other person without the approval of the
General Meeting;
(vii) Shall not accept commissions paid by others for transactions conducted with the Company as
their own;
(viii) Shall not disclose confidential Company’s information without authorization;
(ix) Shall not abuse their connected relationships to damage the Company’s interests;
(x) To be honest and trustworthy in the performance of duties, to exercise rights in the overall
interests of the Company and all shareholders within the scope of his or her authorities, to
avoid actual or potential conflicts of interest and duty, and to put the interests of the
Company and all shareholders above his or her own interests in the event of conflict of
interest;
(xi) Other fiduciary obligations stipulated in laws, administrative regulations, departmental rules,
other securities regulatory rules of the place where the company’s shares are listed and the
Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -11 –


--- page 649 ---
The income obtained by the director in violation of above article shall belong to the Company; If
losses are caused to the Company, it shall be liable for compensation.
Directors shall abide by laws, administrative regulations and the Articles of Association, and have
the following diligent obligations to the Company:
(i) In principle, attend the board of directors’ meeting in person, act diligently in a normal and
reasonable prudent manner, and express clear opinions on the matters deliberated; where an
independent director is unable to attend a board meeting in person for any reason, he/she
shall prudently select and entrust in writing another director to attend the meeting on his/her
behalf; an independent director shall not entrust a non-independent director to attend a
meeting on his/her behalf;
(ii) Shall prudently, earnestly and diligently exercise the powers the Company grants to them to
ensure that the Company conducts its commercial activities in a manner that complies with
the requirements of state laws, administrative regulations and government economic policies,
and that the Company’s commercial activities do not go beyond the scope of the business
activities stipulated in the Company’s business license;
(iii) Shall treat all Shareholders fairly;
(iv) Shall maintain a timely awareness of the operation and management of the Company;
(v) Shall carefully read various business and financial reports of the Company and reports of the
Company in public media, promptly understand and continuously pay attention to the
operation and management status of the Company’s business as well as material events that
have occurred or are likely to occur in the Company and their effects, promptly report to the
board of directors issues existing in the Company’s business activities, and refrain from
indirectly dealing with the following:
(vi) Shall sign written statements confirming the regular reports of the Company, and ensure that
the information disclosed by the Company is true, accurate and complete;
(vii) Shall provide information and materials to the Board of Supervisors and shall not obstruct
the Board of Supervisors or individual Supervisors from performing its or their duties;
(viii) Other obligations of diligence stipulated in the laws, administrative regulations,
departmental rules, other securities regulatory rules of the place where the Company’s Shares
are listed, and Articles of Association.
The fiduciary duty assumed by the Directors shall not be automatically relieved within a
reasonable period after the resignation report has not come into effect or has come into effect after the
end of the term of office. The duty of confidentiality of the Company’s business secrets shall remain
valid after the end of the term of office, until the secrets become public information.
Without the provisions of the Articles of Association or the lawful authorization of the Board of
Directors, no Director shall act in his own name on behalf of the Company or the Board of Directors.
When a Director acts in his/her own name, the Director shall declare his/her position and identity in
advance if the third party reasonably believes that the Director is acting on behalf of the Company or the
Board of Directors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -12 –


--- page 650 ---
Chairman
The Board of Directors shall appoint a Chairman. The Chairman and vice chairman shall be
elected by more than one half of all Directors.
Board of Directors
The Board of Directors consists of eleven Directors, five of whom are independent Directors. The
board of directors shall have one chairman and one vice chairman who shall be elected by the board of
directors.
The Board of Directors exercises the following powers:
(i) To convene the general Shareholders’ meeting and report on work to the General Meeting;
(ii) Implement the resolutions of the General Meeting;
(iii) Determine the business and investment plans of our Company;
(iv) Devise the annual financial budget and closing account plans of our Company;
(v) Devise the earnings distribution and loss offset plans of our Company;
(vi) Formulate the plans for increasing or decreasing our Company’s registered capital, the
issuance of corporate bonds or other securities, as well as the listing of the stock of our
Company;
(vii) Formulate plans for major acquisitions of the Company, in case of the circumstances
stipulated of the Articles of Association the buy-back of shares of our Company, corporate
merger, separation, dissolution and changing the form of our Company;
(viii) Determine such matters as the Company’s external investment, purchase or sale of assets,
asset pledge, external guarantee, entrusting wealth management, connected transaction and
external donation within the scope authorized by the General Shareholders’ Meeting;
(ix) Decide on the setup of our Company’s internal management organization;
(x) To decide on matters such as appointment or dismissal of the Company’s general manager,
secretary to the Board of Directors and other senior officers and on their compensation and
incentives/disincentives; to decide on matters such as appointment or dismissal of the
Company’s vice general manager, chief financial officer and other senior management and on
their compensation and incentives/disincentives based on the nominations by the general
manager;
(xi) Set the basic management systems of our Company;
(xii) Make the modification plan to the Articles of Association;
(xiii) Manage the disclosure of company information;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -13 –


--- page 651 ---
(xiv) Request to the general meeting of shareholders to hire or replace the accounting firm
auditing for the company;
(xv) Attend to the work report of our Company’s general manager and review the work of the
general manager;
(xvi) To determine the acquisition of shares of the Company by the Company in accordance with
Articles 24 (3), 24 (5) and 24 (6) of these Articles subject to compliance with the regulatory
rules for securities of the jurisdiction where the shares of the Company are listed;
(xvii) Other powers and duties authorized by the laws, administrative regulations, regulations of
the authorities, the Articles of Association and the shareholders’ meeting.
Meetings of the Board of Directors shall be attended by more than one-half of the Directors before
the Board of Directors meeting can be convened.
The Board of Directors shall determine the authority of external investment, acquisition and sale
of assets, asset mortgage, external guarantee matters, entrusted financial management, connected
transactions, external donations, and establish strict review and decision-making procedures; major
investment projects shall be reviewed by relevant experts and professionals and reported to the
shareholders’ meeting for approval.
If any Director has connection with the enterprise involved in the resolution made at a Board
meeting, the said Director shall not vote on the said resolution for himself/herself or on behalf of
another Director. The Board meeting may be held when more than half of the non-connected Directors
attend the meeting. The resolution of the Board meeting shall be passed by more than half of the
non-connected Directors. If the number of non-connected Directors attending the meetings is less than
three, the issue shall be submitted to the shareholders’ general meeting for consideration. If there are
any additional restrictions on Directors’ participation in and voting at Board meetings in accordance
with laws and regulations and the securities regulatory rules of the place where the Company’s shares
are listed, such provisions shall prevail.
Special Committees under the Board
The special committees shall be responsible to the Board of Directors, and perform their duties
according to the Articles of Association and the authorization granted by the Board of Directors.
Secretary to the Board
The Company shall have a Secretary to the Board of Directors, and shall be responsible for the
preparation of the shareholders’ general meeting and Board meeting and shall deal with information
disclosure and other matters. The Secretary to the Board of Directors shall comply with the relevant
provisions of the laws, administrative regulations, departmental rules and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -14 –


--- page 652 ---
General Manager and Other Senior Management Members
Our Company has one general manager, appointed or dismissed by the Board of Directors. The
general manager of our Company is responsible to the Board of Directors and exercises the following
powers:
(i) To be in charge of the Company’s production, operation and management, and to organize
and implement the resolutions of the Board of Directors and report on works to the Board of
Directors;
(ii) To organize and implement the Company’s annual business plan and investment proposals;
(iii) To draft plans for the establishment of the Company’s internal management organizations;
(iv) To draft the fundamental management system of the Company;
(v) To formulate specific rules and regulations for the Company;
(vi) To propose to the Board of Directors on the appointment or dismissal of deputy general
manager, financial officer;
(vii) To appoint or dismiss management personnel other than those required to be appointed or
dismissed by the Board of Directors;
(viii) Other functions and powers conferred by the Articles of Association or the Board of
Directors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -15 –


--- page 653 ---
SUPERVISORS AND BOARD OF SUPERVISORS
Supervisors
Each Supervisor shall serve for a term of three years. Upon expiry of the term, the Supervisor may
be re-appointed upon re-election. The Directors and senior management members shall not act
concurrently as Supervisors.
The Supervisors may attend the meetings of the Board of Directors.
Board of Supervisors
The Company shall have a Board of Supervisors. The Board of Supervisors shall consist of three
Supervisors and one chairman. The chairman of the Board of Supervisors shall be elected by a simple
majority of all Supervisors. The Board of Supervisors shall consist of Shareholder’s representatives and
employee’s representatives.
The Board of Supervisors shall exercise the following functions and powers:
(i) To examine regular reports and document of stock issue prepared by the Board of Directors
and propose written examination suggestions, supervisors Shall sign written statements
confirming the regular reports and document of stock issue;
(ii) To review the Company’s financial position;
(iii) To supervise the Directors and senior management members’ acts in performing their duties
in the Company, and to propose a removal of any Director or senior management member in
violation of any laws, administrative regulations, the Articles of Association or resolutions
adopted at the shareholders’ general meeting;
(iv) To demand any Director or senior management member who acts in a manner which is
harmful to the Company’s interest to rectify such behavior;
(v) To propose to convene an extraordinary general meeting, and to convene and preside over
shareholders’ general meetings where the Board of Directors fails to perform its duty to do
so as required by the Company Law;
(vi) To submit proposals to shareholders’ general meetings;
(vii) To initiate legal proceedings against any Director or senior management member according
to Article 151 of the Company Law;
(viii) To investigate into unusual operation of the Company and if necessary, to engage an
accounting firm, a law firm or other professional institutions to assist in its work at the
expenses of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -16 –


--- page 654 ---
QUALIFICATIONS AND RESPONSIBILITIES OF DIRECTORS, SUPERVISORS AND SENIOR
MANAGEMENT
None of the following persons shall serve as our Director, Supervisor or senior management:
(i) A person who has no civil capacity or has limited civil capacity;
(ii) A person who has committed an offense of corruption, bribery, infringement of property,
misappropriation of property or disruption of the socialism economic order and has been
punished because of committing such offense where less than five years have lapsed
following the completion of the implementation of the punishment; or who has been deprived
of his/her political rights for committing an offense where less than five years have lapsed
following such deprivation;
(iii) A person who is a former director, factory manager or manager or enterprise which has
entered into insolvent liquidation and is personally liable for the insolvency of such company
or enterprise, where less than three years have lapsed following the date of the completion of
the insolvency and liquidation of such company or enterprise;
(iv) A person who is a former legal representative of a company or enterprise which had its
business license revoked or had been ordered to close down due to violation of the laws and
has incurred personal liability, where less than three years have lapsed since the date of the
revocation of such business license;
(v) A person who has a relatively large sum of debt, which was not paid at maturity;
(vi) A person who is currently being prohibited from participating in the securities market by the
CSRC and such barring period has not elapsed;
(vii) A person who has been determined publicly by the stock exchange as not suitable for acting
as a director of a listed company;
(viii) A person who has been publicly reprimanded or circulated a notice of criticism for at least
three times by the stock exchange in recent three years;
(ix) A person who has been put on file for investigation by judicial authorities due to suspected
criminal offenses or been put on file for investigation by the CSRC due to suspected
violation of laws, with no definite conclusion established;
(x) Any other circumstances stipulated by laws, administrative regulations or departmental rules
are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -17 –


--- page 655 ---
FINANCIAL AND ACCOUNTING SYSTEM
The Company shall establish its financial and accounting system in accordance with the laws,
administrative regulations and the provisions stipulated by the relevant authorities of the PRC. The
Company shall adopt the Gregorian calendar year for its fiscal year, i.e. the fiscal year shall be from
January 1 to December 31.
The Company shall submit and disclose its annual reports to the CSRC and the stock exchange in
the place where the Company’s shares are listed within four months from the end of each fiscal year,
and its interim reports to the relevant branch office of the CSRC and the stock exchange in the place
where the Company’s shares are listed within two months from the end of the first half of each fiscal
year.
The financial and accounting reports shall be prepared in accordance with relevant laws,
administrative regulations and requirements of the CSRC and the stock exchange in the place where the
Company’s shares are listed.
The Company will not establish account books other than the statutory account books. The assets
of the Company shall not be deposited in any personal account.
The Company is required to allocate 10% of its profits into its statutory reserve fund when
distributing each year’s after-tax profits. When the cumulated amount of the statutory reserve fund of
the Company has reached 50% or more of its registered capital, no further allocations is required.
Where the statutory reserve fund of the Company is insufficient to make up the losses of the
Company for the preceding year, profits of the current year shall be applied to make up the losses before
any allocation to the statutory reserve fund in accordance with the provisions in the preceding
paragraph. Subject to a resolution of the shareholders’ general meeting, after allocation has been made
to the Company’s statutory reserve fund from its after-tax profits, the Company may set aside funds for
the discretionary reserve fund.
After making up of losses and appropriation to reserve funds, balance of the profit after tax shall
be distributed to shareholders in proportion to their shareholdings, unless otherwise stipulated in the
Articles of Association.
If the General Meeting violates the above provisions and profits are distributed to the Shareholders
before the Company makes up for losses or makes allocations to the statutory reserve fund, the profits
distributed in violation of the provisions must be returned by such Shareholders to the Company.
No profit shall be distributed in respect of the shares of the Company which are held by the
Company. The Company shall appoint one or more collection agents for H shareholders in Hong Kong
SAR. The collection agents shall collect on behalf of the relevant H shareholders the dividends
distributed and other funds payable by the Company in respect of the H shares, and hold such monies in
their custody pending payment to the H shareholders concerned. The collection agents appointed by the
Company shall meet the requirements of the laws, regulations and the securities regulatory rules of the
place where the Company’s shares are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -18 –


--- page 656 ---
Reserve funds of the Company are used for recovering losses of the Company and expanding scale
of operation of the Company or conversion into its capital, but capital reserve fund shall not be used for
making up the Company’s losses. When the statutory reserve funds are converted into capital, the
remaining balance of such reserve fund must not be less than 25% of its registered capital before such
conversion.
The Company shall implement a positive profit distribution policy, attach importance to the
provision of reasonable returns to its shareholders, maintain the continuity and stability of the profit
distribution policy and comply with the relevant provisions of laws and regulations.
After the General Meeting of our Company make a resolution on profit distribution plan, the Board
of Directors shall complete the distribution within 2 months after the convening of the General Meeting.
The specific profit distribution plan can be adjusted in accordance with such provisions and the actual
situation when cannot be implemented within two months due to the provisions of laws and regulations
and securities regulatory rules of the place where the Company’s shares are listed.
The Company has implemented an internal audit system and equipped with full-time auditors to
conduct internal audit and supervision on the Company’s financial revenue and expenditures and
economic activities. The internal audit system of the Company and the duties of the auditors shall be
implemented upon approval by the Board.
The Company shall appoint such accounting firm which has complied with the Securities Law for
carrying out the audit for the accounting statements, net asset verification and other relevant
consultancy services. The term of appointment is one (1) year and can be re-appointed.
The appointment of accounting firm by the Company shall be subject to the approval of the
shareholders’ general meetings. The Board of Directors may not appoint accounting firm before the
approval of the shareholders’ general meeting.
The Company guarantees that it shall provide the appointed accounting firm with true and
complete accounting vouchers, accounting books, financial and accounting reports and other accounting
information, and that it engages without any refusal, withholding, and misrepresentation.
The audit fees or the method for determining the audit fee of an accounting firm shall be
determined at the shareholders’ general meeting.
If the Company removes or no longer re-appoints the accounting firm, it shall notify such
accounting firm fifteen days in advance. When shareholders vote for the removal of such accounting
firm, such accounting firm shall be entitled to state its opinions at the shareholders’ general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -19 –


--- page 657 ---
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The Company shall be dissolved for the following reasons:
(i) Expiry of term of business stipulated in the Articles of Association or occurrence of any
other trigger for dissolution stipulated in the Articles of Association;
(ii) The General Meeting adopts a resolution to dissolve our Company;
(iii) Our Company needs to be dissolved for the purpose of merger or division;
(iv) The business license is revoked, or our Company is ordered to close or be eliminated
according to applicable law;
(v) Where our Company encounters significant difficulties in business and management,
continuous survival may be significantly detrimental to the interests of the shareholders, and
the difficulties may not be overcome through other means, shareholders who hold more than
10% of all voting rights of the Company’s shareholders may request the People’s Court to
dissolve the Company.
Where our Company is dissolved due to the provisions set forth in i, ii, iv, v above, the liquidation
team shall be established within 15 days from the date of the event leading to liquidation to commence
dissolution. The personnel of the liquidation team shall consist of the persons determined by the
Directors or the General Meeting.
Within 10 days of the establishment of the liquidation team, the creditors shall be notified and an
announcement shall be published in the qualified media and Hong Kong Stock Exchange
(www.hkexnews.hk ) within 60 days. The creditors shall declare their claims to the liquidation team
within 30 days of the date on which the notice is received or 45 days of the date of announcement if the
notice is not received.
Creditors who declare claims shall state relevant issues related to the claims and provide proofs.
The liquidation team shall carry out registration of the claims. During the period for declaration of
claims, the liquidation group shall not make any repayment to the creditors.
During the liquidation, our Company shall continue to exist, but shall not carry out business
activities irrelevant to the liquidation. The property of our Company shall not be distributed to any
shareholder before full payments have been made out of the property according to the aforesaid
provision.
In the event the liquidation team finds that, after taking stock of our Company’s property and
preparing the balance sheet and list of property, that the assets are insufficient to pay the debts, it shall
apply to the people’s court to declare bankruptcy to the law.
After our Company is declared bankrupt by ruling of the people’s court, according to the law of
insolvency of company implement insolvency and liquidation.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -20 –


--- page 658 ---
AMENDMENT TO THE ARTICLES OF ASSOCIATION
Under any of the following circumstances, the Company shall amend the Articles of Association:
(i) Following the revision of the Company Law or relevant laws and administrative regulations,
the matters stipulated in the Articles of Association contradict the provisions of the revised
laws and administrative regulations;
(ii) There is any change to the Company’s particulars which result in inconsistency with the
matters set out in the Articles of Association;
(iii) A Shareholders’ General Meeting has decided on making amendments to the Articles of
Association.
If the amendment to the Articles of Association adopted by resolution of the shareholders’ general
meeting is subject to the approval of the competent authority, it shall be reported to the competent
authority for approval; if it involves matters of company registration, the registration of the changes
shall be made with the company registration authority in accordance with the law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION OF THE COMPANY
– V -21 –


--- page 659 ---
A. FURTHER INFORMATION ABOUT OUR COMPANY AND OUR SUBSIDIARIES
1. Incorporation
Our Company, was established in the PRC on December 24, 2003 and converted into a joint
stock company under the PRC Company Law on December 3, 2010.
The registered address of our Company is No. 9 Putou Road, Dongfu Industry Park II,
Haicang District, Xiamen City, Fujian Province, PRC 361025. Our Company has established a
principal place of business in Hong Kong SAR at Office 5, 15/F, Bank of East Asia Harbour View
Centre, No. 56 Gloucester Road, Hong Kong SAR, and has been registered as a non-Hong Kong
company in Hong Kong SAR under Part 16 of the Hong Kong Companies Ordinance on March 13,
2024. Mr. Lee Chung Shing (ϓ ) has been appointed as our authorized representative for the
acceptance of service of process in Hong Kong SAR. The address for service of process on our
Company in Hong Kong SAR is the same as our Company’s principal place of business in Hong
Kong SAR.
As we are incorporated in the PRC, our corporate structure and Articles of Association are
subject to the relevant laws and regulations of the PRC. A summary of the relevant provisions of
our Articles of Association is set out in Appendix V to this Prospectus. A summary of certain
relevant aspects of the laws and regulations of the PRC is set out in Appendix IV to this
Prospectus.
2. Changes in the share capital of our Company
As at the date of our incorporation on December 24, 2003, our registered capital was
RMB1,518,000, which was fully paid up upon establishment. On December 3, 2010, our Company
was converted into a joint stock company, and our registered capital was RMB85,000,000 divided
into 85,000,000 shares with a nominal value of RMB1.00 each. On July 12, 2016, we completed
the initial public offering and listing on the SZSE of our A Shares (stock code: 002803).
Immediately after the listing of A Shares, our registered capital was RMB116,000,000 divided into
116,000,000 Shares with a nominal value of RMB1.00 each. Subsequently and as at the Latest
Practicable Date, following a series of capital increases, private placement and share repurchases,
our registered capital was RMB384,769,288 divided into 384,769,288 shares with a nominal value
of RMB1.00 each.
For further details, see “History and Corporate Structure – Our Corporate History” in this
Prospectus.
Save as disclosed herein, there has been no alteration in the share capital of our Company
within the two years immediately preceding the date of this Prospectus.
3. Resolutions of our Shareholders
At an extraordinary general meeting of our Company held on February 2, 2024, among other
things, the following resolutions were passed by the Shareholders of our Company:
(a) the issue of the H Shares of nominal value of RMB1.00 each and such H Shares be
listed on the Stock Exchange;
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-1 –


--- page 660 ---
(b) the number of H Shares to be issued initially shall not be more than 67,910,000 shares
(representing approximately 15% of the total number of issued Shares as enlarged by
the Global Offering);
(c) subject to the completion of the Global Offering, the Articles of Association be
approved and adopted, which shall only become effective on the Listing Date and the
Board be authorized to amend the Articles of Association in accordance with any
comments from the Stock Exchange and the relevant PRC regulatory authorities; and
(d) the Board or its authorized individual be authorized to handle all matters relating to,
among other things, all matters relating to the Global Offering, the issue and listing of
the H Shares.
4. Changes in the share capital of our subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are set out in
Note 1 of the Accountants’ Report set out in Appendix IA to this Prospectus.
The following alteration in the share capital of our subsidiaries took place within the two
years immediately preceding the date of this Prospectus:
Name of Subsidiary Date of Change(s)
Share Capital
before Change
Share Capital
after Change
Langfang Jihong November 2023 RMB50,000,000 RMB120,000,000
Jinan Jihong Packaging
Limited* (Λᑌ̍ༀ
ʮ̡ )
December 2023 RMB32,000,000 RMB50,000,000
Guizhou Jihong Brand
Planning and Management
Co., Limited* (ۜ
ʮ̡ )
June 2024 RMB500,000,000 RMB10,000,000
Xi’an Danjun E-commerce
Co., Limited* ( Гτʗᒺཥ
ʮ̡ )
October 2024 RMB5,000,000 RMB1,000,000
Lucky Ecommerce June 2023 US$50,000 US$1,000,000
Giimall Cloud Technology
Co., Limited (ಥΛ⃍ථ
ʮ̡ )
August 2023 HK$100,000 HK$2,900,000
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-2 –


--- page 661 ---
5. Restrictions on Repurchase of Shares
Please refer to “Summary of the Articles of Association of the Company” in Appendix V to
this Prospectus for details.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following contracts (not being contracts entered into in the ordinary course of our
business) have been entered into by us within the two years preceding the date of this Prospectus
and are or may be material:
(1) the cornerstone investment agreement ( ਿͩҳ༟՘ᙄ ) dated May 15, 2025 entered into
by our Company, Shen Zhenyu, China International Capital Corporation Hong Kong
Securities Limited and CMB International Capital Limited, pursuant to which Shen
Zhenyu agreed to subscribe for H Shares at the Offer Price in the aggregate amount of
Hong Kong dollar equivalent of US$10,000,000, details of which are included in the
section headed “Cornerstone Investors” in this Prospectus;
(2) the cornerstone investment agreement ( ਿͩҳ༟՘ᙄ ) dated May 15, 2025 entered into
by our Company, Timber Kangaroo Capital Limited, China International Capital
Corporation Hong Kong Securities Limited and CMB International Capital Limited,
pursuant to which Timber Kangaroo Capital Limited agreed to subscribe for H Shares
at the Offer Price in the aggregate amount of Hong Kong dollar equivalent of
US$3,000,000, details of which are included in the section headed “Cornerstone
Investors” in this Prospectus;
(3) the cornerstone investment agreement ( ਿͩҳ༟՘ᙄ ) dated May 15, 2025 entered into
by our Company, Y ulong International Capital Limited, China International Capital
Corporation Hong Kong Securities Limited and CMB International Capital Limited,
pursuant to which Y ulong International Capital Limited agreed to subscribe for H
Shares at the Offer Price in the aggregate amount of Hong Kong dollar equivalent of
US$7,000,000, details of which are included in the section headed “Cornerstone
Investors” in this Prospectus; and
(4) the Hong Kong Underwriting Agreement.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-3 –


--- page 662 ---
2. Intellectual property rights of our Group
Trademarks
(1) Trademarks for which registration has been granted
As of the Latest Practicable Date, we were the registered owner of and had the right to
use the following trademarks which we consider to be or may be material to our business:
No. Trademark
Place of
Registration
Registration
number Registered Owner Class
Registration
Date Expiry Date
1.
 PRC 54472740 Our Company 32 January 14,
2022
January 13,
2032
2.
 PRC 8896371 Our Company 40 December 14,
2021
December 13,
2031
3.
 PRC 8896293 Our Company 16 December 14,
2021
December 13,
2031
4.
 PRC 8838950 Our Company 40 November 28,
2011
November 27,
2031
5.
 PRC 8838913 Our Company 16 November 28,
2011
November 27,
2031
6.
 PRC 53665807 Our Company 33 May 7,
2022
May 6,
2032
7.
 PRC 58330196 Our Company 32 November 14,
2022
November 13,
2032
8.
 Hong Kong
SAR
305427450 Lucky Ecommerce 3, 9, 11, 14, 16,
17, 18, 21, 24,
25, 27, 35
October 23,
2020
October 22,
2030
9.
U.S. 6606425 Hongkong Shize 12
(International);
19, 21, 23, 31,
35, 44 (U.S.)
January 4,
2022
January 4,
2032
10.
PRC 53815611 Zhengzhou Jikeyin 25 September 14,
2021
September 13,
2031
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-4 –


--- page 663 ---
No. Trademark
Place of
Registration
Registration
number Registered Owner Class
Registration
Date Expiry Date
11.
 Japan 6420928 Jiketuo (Shenzhen)
Digital
Technology Co.,
Ltd.* (ן܄( ଉ
έ)ࠢ
ʮ̡)
8 July 27, 2021 July 27, 2031
12.
Japan 6745007 Jiketuo (Shenzhen)
Digital
Technology Co.,
Ltd.* (ן܄( ଉ
έ)ࠢ
ʮ̡)
9 October 13,
2023
October 13,
2033
13.
Japan 6474944 Zhengzhou Jikeyin 25 November 22,
2021
November 22,
2031
14.
 Japan 6786265 Giiktop
(Hong Kong)
Digital
Technology
Co., Limited
3 March 11,
2024
March 11,
2034
15.
Hong Kong
SAR
306475708 Our Company 35 February 14,
2024
February 13,
2034
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-5 –


--- page 664 ---
Patents
As at the Latest Practicable Date, our Group had registered the following patents in the
PRC which are material to the business of our Group:
No. Patent
Registered
owner
Registration
number
Date of
registration
1. A portable packaging box
(ɓ၇˓౤ό̍ༀଷ )
Our Company ZL201921464229.5 September 4, 2019
2. A packaging box with exposed bottle
body (̍ༀଷ )
Our Company ZL201921465181.X September 4, 2019
3. A packaging box structure
(ɓ၇̍ༀଷഐ࿴ )
Our Company ZL201921275164.X August 7, 2019
4. A handle with an external cup
(౤˓ )
Our Company ZL201920918486.5 June 18, 2019
5. A structure for beverage carriers
(౤ᘫഐ࿴ )
Our Company ZL201920918579.8 June 18, 2019
6. A new type of paper cup
(؎)
Our Company ZL201920817532.2 May 31, 2019
7. A packaging box for drinks
(̍ༀଷ )
Our Company ZL201920481523.0 April 10, 2019
8. A structure for food containers
(ഐ࿴ )
Our Company ZL201920163281.0 January 29, 2019
9. A diffuse reflective layer structure of
packaging box and its
manufacturing technique
(ᄴഐ࿴ʿ
Չ͛ପʈᖵ )
Our Company ZL201410251787.9 June 9, 2014
10. An antibacterial acaricidal printing
base oil mother solution and a
printing base oil prepared from
mother solution and a preparation
method thereof ( ɓ၇ҵഽᚨ㿭Ι
ΙՏ
ج)
Our Company ZL201310058365.5 February 25, 2013
11. A water-soluble cream-resistant
printing ink and preparation
method thereof (ذ
ج)
Our Company ZL201010294960.5 September 28, 2010
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-6 –


--- page 665 ---
No. Patent
Registered
owner
Registration
number
Date of
registration
12. Offset printing ink solvent and
preparation method thereof
(ج)
Our Company ZL200910061354.6 March 27, 2009
13. Aqueous plastic printing ink for food
indirect contact and preparation
method thereof
(ኈʿՉ
ج)
Our Company ZL200510120545.7 December 28, 2005
14. A thermal insulated tote bag
(๝˓౤஛ )
Our Company ZL202120142541.3 January 19, 2021
15. A leak-proof tote bag
(ɓ၇ԣဍ˥˓౤஛ )
Our Company ZL202120142961.1 January 19, 2021
16. A tote bag with handles
(˓౤஛ )
Our Company ZL202120143826.9 January 19, 2021
17. A waterproof cup holder
(ϖ )
Our Company ZL202120144252.7 January 19, 2021
18. A packaging box ( ɓ၇̍ༀଷ ) Our Company ZL202022510756.4 November 3, 2020
19. A portable packaging
(䆝ό̍ༀ )
Our Company ZL202022390578.6 October 23, 2020
20. A pneumatic reversing lifting
intelligent transfer platform
(౽ঐᔷ༶̨̻ )
Zhengzhou
Jikeyin
ZL202011518333.5 December 21, 2020
21. An auxiliary regulating mechanism
for express logistics packaging
(̍ༀႾпሜືዚ࿴ )
Zhengzhou
Jikeyin
ZL202011428672.4 December 7, 2020
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-7 –


--- page 666 ---
Copyrights
As at the Latest Practicable Date, our Group had registered the following copyrights in
the PRC which are material to the business of our Group:
No. Copyright Registered owner Registration number
Development
completion date
1. Bottles (twenty) of
Guijiang Ling
(൮ᔽ˿ɚɤৢଧ )
Our Company ਷Ъ೮ο -2021-F-00198893 February 6, 2021
2. Packing Boxes (twenty) of
Guijiang Ling
(൮ᔽ˿ɚɤ̍ༀଷ )
Our Company ਷Ъ೮ο -2021-F-00198892 February 6, 2021
3. Bottles of Guijiang Ling
(൮ᔽ˿ৢଧ )
Our Company ਷Ъ೮ο -2021-F-00198883 February 6, 2021
4. Packing Boxes of
Guijiang Ling
(൮ᔽ˿̍ༀଷ )
Our Company ਷Ъ೮ο -2021-F-00198886 February 6, 2021
5. Bottles of Guizhou Chun
Wine ( ൮ψቐৢଧ )
Our Company ਷Ъ೮ο -2021-F-00198889 February 6, 2021
6. Packing Boxes of
Guijiang Chun Wine
(൮ᔽቐ̍ༀଷ )
Our Company ਷Ъ೮ο -2021-F-00198896 February 6, 2021
7. Bottles of Guijiang Y un
Wine ( ൮ᔽ㣠ৢଧ )
Our Company ਷Ъ೮ο -2021-F-00198885 February 6, 2021
8. Standard Packaging Boxes
of Guizhou Jiang Wine
(൮ψᔽৢᅺ๟ᅵ̍ༀ
ଷ)
Our Company ਷Ъ೮ο -2021-F-00198887 February 6, 2021
9. Handbag Side Series of
Guizhou Jiang Wine
(ࠦ
ӻΐ)
Our Company ਷Ъ೮ο -2021-F-00198888 February 6, 2021
10. Packing Boxes of
Guijiang Y un Wine
(൮ᔽ㣠̍ༀଷ )
Our Company ਷Ъ೮ο -2021-F-00198879 February 6, 2021
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-8 –


--- page 667 ---
Software Copyrights
As of the Latest Practicable Date, we had registered the following software copyrights
which we consider to be or may be material in relation to our Group’s business:
No. Copyright
Registered
owner
Registration
number
Place of
Registration Creation Date
1. Product inventory
prediction and
analysis management
system V1.0 (௪
၍ଣӻ
୕V1.0)
Zhengzhou
Jikeyin
2022SR0221866 PRC August 10, 2021
2. Mail intelligent
analysis and
management system
V1.0 (ؓ
၍ଣӻ୕ V1.0)
Zhengzhou
Jikeyin
2022SR0221864 PRC October 18,
2021
3. Intelligent collection
and statistics system
of Internet-based
advertising design
material V1.0 (׵
ࠇ
ࠇ
ӻ୕V1.0)
Zhengzhou
Jikeyin
2022SR0221867 PRC December 9,
2021
4. AR-based advertising
material collection
system V1.0 ( ᄿѓ९
ҿARમණӻ୕ V1.0)
Zhengzhou
Jikeyin
2022SR0061893 PRC November 24,
2021
5. Warehouse inventory
management system
V1.0 (Ꮇ௪஬၍ଣ
ӻ୕V1.0)
Zhengzhou
Jikeyin
2022SR0063547 PRC November 19,
2021
6. Cross-border
e-commerce
customer service
email management
system V1.0 ( ༨ྤཥ
ඉ΁၍ଣӻ
୕V1.0)
Zhengzhou
Jikeyin
2022SR0061894 PRC November 22,
2021
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-9 –


--- page 668 ---
No. Copyright
Registered
owner
Registration
number
Place of
Registration Creation Date
7. Holo Shopping App
with Android version
V1.0 (HoloيAPP
AndroidوV1.0)
Zhengzhou
Jikeyin
2021SR0225458 PRC December 24,
2020
8. Holo Shopping App
with iOS version
V1.0 (HoloيAPP
iOSوV1.0)
Zhengzhou
Jikeyin
2021SR0224396 PRC December 24,
2020
9. Giikin Advertising and
Marketing
Intelligent Delivery
Platform V1.0 (܄
Ιᄿѓᐄቖ౽ঐҳ
̨̻ V1.0)
Zhengzhou
Jikeyin
2023SR1140306 PRC December 16,
2022
10. Big Data Precision
Marketing
Promotion Platform
V1.0 ( ɽᅰኽၚ๟ᐄ
ቖપᄿ̨̻ V1.0)
Zhengzhou
Jikeyin
2023SR0531608 PRC December 16,
2022
11. Giikin Talent Mapping
System V1.0 (Ι
ɛʑήྡӻ୕ V1.0)
Zhengzhou
Jikeyin
2023SR0651672 PRC April 22, 2022
12. Giikin Indicator
Monitoring System
V1.0 (ᅺ္
છӻ୕ V1.0)
Zhengzhou
Jikeyin
2023SR0691688 PRC August 22, 2022
13. Giikin Integrated
Intelligent
Management
Network Platform
V1.0 (ΙၝΥ
౽ঐ၍ଣၣഖ̨̻
V1.0)
Xi’an Jikeyin 2018SR308408 PRC April 1, 2018
14. Intelligent Traffic
Diversion
Advertising
Information
Monitoring and
Control System V1.0
(ࢹڦ
္၍છՓӻ୕ V1.0)
Xi’an Jikeyin 2023SR0348930 PRC December 25,
2022
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-10 –


--- page 669 ---
No. Copyright
Registered
owner
Registration
number
Place of
Registration Creation Date
15. Enterprise Internal
Advertising Data
Analysis System
V1.0 ( Άุʫ௅ᄿѓ
ӻ୕ V1.0)
Xi’an Jikeyin 2021SR1427707 PRC January 11, 2021
Domain Names
As of the Latest Practicable Date, we had registered the following domain name which
we consider to be or may be material in relation to our Group’s business:
No. Domain Name Registrant
Date of
Registration Expiry Date
1. jihong.cn Our Company May 30,
2010
May 30,
2026
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of interests
(a) Disclosure of interest of Substantial Shareholders
For information on the persons (other than Directors, Supervisors and chief executive
of our Company) who, immediately following the completion of the Global Offering, will or
will be deemed or taken to have interests and/or short positions in our Company’s Shares or
underlying Shares which would be required to be disclosed to our Company and the Stock
Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or directly or
indirectly, interested in 10% or more of the nominal value of any class of share capital
carrying rights to vote in all circumstances at the general meetings of any other member of
our Group, please see “Substantial Shareholders” in this Prospectus for details.
Save as disclosed in the section headed “Substantial Shareholders” in this Prospectus,
as of the Latest Practicable Date, our Directors were not aware of any persons who would,
immediately following the completion of the Global Offering, having or be deemed or taken
to the beneficial interests or short position in our Shares or underlying Shares which would
fall to be disclosed to our Company under the provisions of Divisions 2 and 3 of Part XV of
the SFO, or directly or indirectly be interested in 10% or more of the issued voting shares of
any member of our Group or had option in respect of such capital.
The substantial Shareholders of our Company does not have interests in any member of
our Group (other than our Company).
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-11 –


--- page 670 ---
(b) Disclosure of interest of Directors and Supervisors in the registered capital of our
Company or associated corporations of our Company
Immediately following the completion of the Global Offering, the interests or short
positions of our Directors, Supervisors and chief executive of our Company in the Shares,
underlying Shares and debentures of our Company or any associated corporation (within the
meaning of Part XV of the SFO) which will have to be notified to us and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions
which they are taken or deemed to have under such provisions of SFO) or which will be
required, pursuant to section 352 of the SFO, to be entered in the register referred to therein,
or will be required, pursuant to the Model Code for Securities Transactions by Directors and
Listed Issuers (contained in Appendix C3 of the Listing Rules) to be notified to us and the
Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of
Listed Issuers, will be as follows:
Interests in the Shares of our Company
Name of
Director/
Supervisor
Nature of
interest Class
Number of
Shares directly
and indirectly
held
immediately
following the
completion of
the Global
Offering
(1)
Approximate
percentage of
shareholding in
the relevant
class of Shares
immediately
following the
completion of
the Global
Offering (1)
Approximate
percentage of
shareholding in
the total issued
share capital
immediately
following the
completion of
the Global
Offering (1)
Ms. Zhuang
Hao
Beneficial
interest
A Shares 69,623,082 18.09 15.38
Interest of
person acting
in concert
(2)
A Shares 53,866,003 14.00 11.89
Mr. Zhuang
Shu
Beneficial
interest
A Shares 34,671,025 9.01 7.66
Interest of
person acting
in concert
(2)
A Shares 88,818,060 23.08 19.61
Mr. Zhang
Heping
Beneficial
interest
A Shares 6,236,125 1.62 1.38
Interest of
person acting
in concert
(2)
A Shares 117,252,960 30.47 25.89
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-12 –


--- page 671 ---
Name of
Director/
Supervisor
Nature of
interest Class
Number of
Shares directly
and indirectly
held
immediately
following the
completion of
the Global
Offering
(1)
Approximate
percentage of
shareholding in
the relevant
class of Shares
immediately
following the
completion of
the Global
Offering (1)
Approximate
percentage of
shareholding in
the total issued
share capital
immediately
following the
completion of
the Global
Offering (1)
Mr. Lu Tashan Beneficial
interest
A Shares 875,000 (3) 0.23 0.19
Interest of
person acting
in concert
(2)
A Shares 122,614,085 31.86 27.08
Mr. Wang
Y apeng
Beneficial
interest
A Shares 12,179,900 (4) 3.16 2.69
Notes:
(1) The calculation is based on the total number of 384,769,288 A Shares and 452,679,288 Shares
in issue immediately following the completion of the Global Offering.
(2) Ms. Zhuang Hao, Mr. Zhuang Shu, Ms. He Jingying, Mr. Zhang Heping, Mr. Zhuang Zhenhai,
Mr. Lu Tashan and Tibet Y ongyue are parties acting in concert and are our Single Largest Group
of Shareholders. Please refer to “History and Corporate Structure – Our Shareholders Acting in
Concert” for further details.
(3) The relevant Shares held by Mr. Lu Tashan consisted of (i) 306,250 A Shares granted under the
2023 Restricted Share Incentive Plan which were released from lock-up in accordance with the
2023 Release Mechanism on October 23, 2024; and (ii) 568,750 restricted A Shares granted
under the 2023 Restricted Share Incentive Plan. Please refer to “History and Corporate
Structure – Our Corporate History – Adoption of the 2023 Restricted Share incentive Plan” for
further details.
(4) The relevant Shares held by Mr. Wang Y apeng include 260,000 restricted A Shares granted
under the 2023 Restricted Share Incentive Plan which shall only become saleable upon the
expiration of the corresponding lock-up periods. Please refer to “History and Corporate
Structure – Our Corporate History – Adoption of the 2023 Restricted Share Incentive Plan” for
further details.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-13 –


--- page 672 ---
2. Particulars of service contracts
We have entered into a contract with each of our Directors and Supervisors. The principal
particulars of these service contracts include (i) the term of service, and (ii) termination
mechanism in accordance with their respective term. The service contracts may be renewed in
accordance with our Articles of Association and the applicable Listing Rules.
Save as disclosed above, none of the Directors or Supervisors has entered into any service
contracts as a director or supervisor with any member of our Group (excluding contracts expiring
or determinable by the employer within one year without payment of compensation (other than
statutory compensation)).
3. Remuneration of Directors and Supervisors
For each year of the Track Record Period, the aggregate remuneration (including fees,
salaries, contributions to pension schemes, housing allowances and other allowances and benefits
in kind and discretionary bonuses but excluding the restricted A Shares granted under the 2023
Restricted Share Incentive Plan, as further explained in “E. 2023 Restricted Share Incentive Plan”
below) paid to our Directors and Supervisors were approximately RMB 8.1 million, RMB11.9
million and RMB 19.0 million, respectively.
Save as disclosed above, no other payments have been made or are payable, for each year of
the Track Record Period, by any of member of our Group to any of our Directors or Supervisors.
4. Directors’ Competing Interests
None of our Directors are interested in any business apart from our Group’s business which
competes or is likely to compete, directly or indirectly, with the business of our Group.
5. Disclaimers
Save as disclosed in this Appendix and in sections headed “Directors, Supervisors and Senior
Management” and “Substantial Shareholders” in this Prospectus:
(a) none of our Directors or Supervisors or chief executive of our Company has any
interests or short positions in the shares, underlying shares and debentures of our
Company or our associated corporations (within the meaning of Part XV of the SFO)
which will be required to be notified to our Company and the Stock Exchange pursuant
to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which
he is taken or deemed to have taken under such provisions of the SFO) or which will be
required, pursuant to section 352 of the SFO, to be entered in the register referred to in
that section, or which will be required, pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers, to be notified to our Company and the
Stock Exchange, once the Shares are listed on the Stock Exchange. For this purpose,
the relevant provisions of the SFO will be interpreted as if they applied to the
Supervisors;
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-14 –


--- page 673 ---
(b) so far as is known to any Director or Supervisors or chief executive of our Company, no
person has an interest or short position in the Shares and underlying Shares which
would fall to be disclosed to our Company and the Stock Exchange under the provisions
of Divisions 2 and 3 of Part XV of the SFO, or is, directly or indirectly, interested in
10% or more of the nominal value of any class of share capital carrying rights to vote in
all circumstances at general meetings of any other member of our Group;
(c) none of our Directors or Supervisors nor any of the persons listed in “E. Other
Information – 7. Qualification of experts” below is interested in the promotion of, or in
any assets which have been, within the two years immediately preceding the issue of
this Prospectus, acquired or disposed of by or leased to any member of our Group, or
are proposed to be acquired or disposed of by or leased to any member of our Group;
(d) none of our Directors or Supervisors nor any of the persons listed in “E. Other
Information – 7. Qualification of experts” below is materially interested in any contract
or arrangement with our Group subsisting at the date of this Prospectus which is
unusual in its nature or conditions or which is significant in relation to the business of
our Group as a whole;
(e) save in connection with Underwriting Agreements, none of the persons listed in “E.
Other Information – 7. Qualification of experts” below has any shareholding in any
member of our Group or the right (whether legally enforceable or not) to subscribe for
or to nominate persons to subscribe for securities in any member of our Group;
(f) none of our Directors or Supervisors has entered or has proposed to enter into any
service agreements with our Company or any member of our Group (other than
contracts expiring or determinable by the employer within one year without payment of
compensation other than statutory compensation); and
(g) none of our Directors or Supervisors or their respective associates (as defined under the
Listing Rules), or Shareholders who are interested in more than 5% of the issued share
capital of our Company has any interest in our Company’s five largest customers and
five largest suppliers.
D. 2022 EMPLOYEE SHARE OWNERSHIP PLAN
Our Company adopted the 2022 Employee Share Ownership Plan on October 10, 2022. The terms
of the 2022 Employee Share Ownership Plan are not subject to the provisions of Chapter 17 of the
Listing Rules as there are no outstanding shares under the 2022 Employee Share Ownership Plan and no
further shares or options will be granted by our Company after Listing. Given that all the underlying
restricted A Shares had already been granted in 2022, there will not be any dilution effect to the issued
Shares under the 2022 Employee Share Ownership Plan. No further awards will be granted after Listing.
The purpose of the 2022 Employee Share Ownership Plan was to attract, retain and motivate the
talents of our Company, and to align the interest of our Company and our personnel.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-15 –


--- page 674 ---
Eligible participants of the 2022 Employee Share Ownership Plan include the management
members and other employees of our Company. Under the 2022 Employee Share Ownership Plan,
6,075,307 restricted A Shares of our Company (constituting 1.61% of the total registered share capital
of our Company at the time of grant), which were repurchased by our Company during November 10,
2020 to August 27, 2021, were granted and transferred to a single securities account opened in the name
of the 2022 Employee Share Ownership Plan on November 22, 2022 (the “ Transfer Completion
Date ”). The grant price was RMB6.5 per restricted A Share. Upon grant of the restricted A Shares, Mr.
Wu Minggui (the finance director) and Ms. Gong Hongying (director of three subsidiaries of our
Company and a supervisor of six subsidiaries of our Company) were granted 80,000 restricted A Shares
and 100,000 restricted A Shares, respectively. The other 169 management members and employees of
our Company were granted 5,895,307 restricted A Shares in total. The terms and conditions of the 2022
Employee Share Ownership Plan provide that, among other things, the participating employees will be
entitled to only the economic rights attached to such Shares whereas the power of dealing of such
Shares (including the exercise of voting rights attached to such Shares) will be delegated to a
committee, as elected by and among the participating employees. As of the Latest Practicable Date, the
committee comprised of Ms. Guo Weiwei ( ெၪၪ ), Ms. Xu Wenxiu ( ஢˖Ӹ ) and Ms. Gong Hongying,
all of whom are employees of our Company, and they collectively control and exercise the power of
dealing in the Shares granted under the 2022 Employee Share Ownership Plan. A decision is taken at a
meeting of the committee by a majority of the votes of the committee members. As of the Latest
Practicable Date, a total of 3,949,007 Shares were held in the name of the 2022 Employee Share
Ownership Plan and there was no outstanding shares to be granted under the 2022 Employee Share
Ownership Plan.
The grantees of the restricted A Shares under the 2022 Employee Share Ownership Plan are
subject to lock-up periods which will be released in the following manner (together the “ 2022 Release
Mechanism”):
(a) 35% of the restricted A Shares are allowed to be sold upon 12 months after the Transfer
Completion Date;
(b) a further 35% of the restricted A Shares are allowed to be sold upon 24 months after the
Transfer Completion Date; and
(c) the remaining 30% of the restricted A Shares are allowed to be sold only upon 36 months
after the Transfer Completion Date.
The 2022 Release Mechanism and the extent of permitted disposal of the restricted A Shares are
subject to satisfaction of the profit growth targets in cross-border e-commerce business of our Company.
E. 2023 RESTRICTED SHARE INCENTIVE PLAN
Our Company adopted the 2023 Restricted Share Incentive Plan, which was of a one-off nature
and did not involve any option over the Shares of our Company. The terms of the 2023 Restricted Share
Incentive Plan are not subject to the provisions of Chapter 17 of the Listing Rules as there are no
outstanding shares under the 2023 Restricted Share Incentive Plan and no further shares or options will
be granted by our Company after Listing. Given that all the underlying restricted A Shares had already
been granted in 2023, there will not be any dilution effect to the issued Shares under the 2023 Restricted
Share Incentive Plan. No further awards will be granted after Listing.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-16 –


--- page 675 ---
The purpose of the 2023 Restricted Share Incentive Plan was to attract, retain and motivate the
talents of our Company, and to align the interest of our Company and our personnel.
Eligible participants of the 2023 Restricted Share Incentive Plan include the Directors,
management members and other employees of our Company. Independent Directors and Supervisors of
our Company, Shareholders or ultimate controllers who then individually or collectively held more than
5% of our Company’s A Shares, their spouses, parents and children were not eligible.
Under the 2023 Restricted Share Incentive Plan, 6,600,000 restricted A shares of our Company
(constituting 1.74% of the total registered share capital of our Company at the time of grant) were
granted on September 25, 2023 and were listed on the SZSE on October 27, 2023. The grant price was
RMB9.51 per restricted A Share. Upon grant of the restricted A Shares, Mr. Lu Tashan (an executive
Director), Mr. Wang Y apeng (the chairman of Board of Directors and an executive Director) and Mr. Wu
Minggui (the finance director) were granted 875,000 restricted A Shares, 400,000 restricted A Shares
and 50,000 restricted A Shares, respectively. The other 200 management members and employees of our
Company were granted 5,275,000 restricted A Shares in total. As at the Latest Practicable Date, there
was no outstanding shares under the 2023 Restricted Share Incentive Plan.
The grantees of the restricted A Shares under the 2023 Restricted Share Incentive Plan are subject
to lock-up periods which will be released in the following manner (together the “ 2023 Release
Mechanism ”):
(a) 35% of the restricted A Shares are allowed to be sold only between (i) the first trading day of
SZSE 12 months after the registration completion date of the restricted A Shares, being
October 23, 2023 (the “ Registration Completion Date ”) and (ii) the last trading day of
SZSE within 24 months from the Registration Completion Date (both trading days inclusive);
(b) 35% of the restricted A Shares are allowed to be sold only between (i) the first trading day of
SZSE 24 months after the Registration Completion Date and (ii) the last trading day of SZSE
within 36 months from the Registration Completion Date (both trading days inclusive); and
(c) the remaining 30% of the restricted A Shares are allowed to be sold only between (i) the first
trading day of SZSE 36 months after the Registration Completion Date and (ii) the last
trading day of SZSE within 48 months from the Registration Completion Date (both trading
days inclusive).
The 2023 Release Mechanism and the extent of permitted disposal of the restricted A Shares are
subject to performance targets including (i) the profit growth targets of 10.0%, 21.0% and 33.1% as
compared to the year ended 31 December 2022 in cross-border e-commerce business of our Company
for each of the years ended 31 December 2023, 2024 and 2025, respectively and (ii) performance
assessment of each grantee, whereby the portion of shares permitted to be sold (i.e. 100.0%, 80.0%,
60.0% and 0.0%) by a grantee in each unlocking period is adjusted based on a clawback mechanism
depending on the performance bracket (i.e. excellent, good, satisfactory and unsatisfactory) in which
such grantee is assessed to belong for that unlocking period.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-17 –


--- page 676 ---
F . 2023 SHARE REPURCHASE PLAN
On August 30, 2023, our Board of Directors resolved a plan to repurchase, in the next 12 months,
A shares from the secondary market using our internal capital, with a total budget between RMB40
million to RMB60 million and a target price of not more than RMB25.00 per A Share (the “ 2023 Share
Repurchase Plan ”), for the purpose of granting such repurchased A Shares under any future employee
incentive plan or restricted share incentive plan. On February 5, 2024, after considering our future
prospects, financial condition and the interest of our Shareholders, our Board of Directors resolved to
increase the total budget of the 2023 Share Repurchase Plan for the repurchase of A Shares from the
secondary market from between RMB40 million and RMB60 million, to between RMB60 million and
RMB120 million. Other terms of the 2023 Share Repurchase Plan remain unchanged.
Any future employee incentive plan or restricted share incentive plan to be established in
connection with the 2023 Share Repurchase Plan will not have any dilutive effect to the interests held
by the Shareholders. Such future employee incentive plan or restricted share incentive plan and the
terms thereof shall comply with the relevant provisions of Chapter 17 of the Listing Rules.
All such repurchased A Shares have been held in a single securities account opened for the
purpose of the 2023 Share Repurchase Plan. The 2023 Share Repurchase Plan was completed on August
30, 2024, and as at the date of its completion, 6,025,700 A Shares were repurchased and held in such
relevant account, representing approximately 1.57% of our Shares.
G. 2024 SHARE REPURCHASE PLAN
On November 4, 2024, our Board of Directors resolved a plan to repurchase, in the next 12
months, A shares from the secondary market using our internal capital, with a total budget between
RMB60 million to RMB100 million and a target price of not more than RMB18.20 per A Share (revised
on December 16, 2025 to RMB18.02 per A Share with effect from December 17, 2024, and further
revised to RMB17.86 per A Share on May 15, 2025 with effect from May 20, 2025) (the “ 2024 Share
Repurchase Plan ”), for the purpose of granting such repurchased A Shares under any future employee
incentive plan or restricted share incentive plan.
Any future employee incentive plan or restricted share incentive plan to be established in
connection with the 2024 Share Repurchase Plan will not have any dilutive effect to the interests held
by the Shareholders. Such future employee incentive plan or restricted share incentive plan and the
terms thereof shall comply with the relevant provisions of Chapter 17 of the Listing Rules.
All such repurchased A Shares have been and will be held in a single securities account opened for
the purpose of the 2024 Share Repurchase Plan. As at the Latest Practicable Date, 744,200 A Shares
were repurchased and held in such relevant account, representing approximately 0.19% of our Shares.
As of the Latest Practicable Date, the Company has no outstanding future employee incentive plan
or restricted share incentive plan that may be subject to the provisions of Chapter 17 of the Listing
Rules.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-18 –


--- page 677 ---
H. OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to fall on
our Company or any of our subsidiaries.
2. Litigation
As at the Latest Practicable Date, our Company is not involved in any material litigation,
arbitration or administrative proceedings. So far as we are aware, no such litigation, arbitration or
administrative proceedings are pending or threatened.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee of the
Stock Exchange for listing of, and permission to deal in, our H Shares. All necessary arrangements
have been made enabling the H Shares to be admitted into CCASS.
Each of the Joint Sponsors satisfies the independence criteria as set out in Rule 3A.07 of the
Listing Rules.
The total amount of fees paid and payable to each of the Joint Sponsors is US$1 million and
US$1 million, respectively, in respect of their services as joint sponsors for the proposed listing.
4. Preliminary expenses
Our Company has not incurred any material preliminary expense.
5. Promoter
The promoters of our Company were Y ongyue Investment, Jinrunyue, Zhuang Hao, Zhuang
Shu, He Jingying and Zhang Heping. 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 promoter in connection with the Global Offering and
the related transactions described in this Prospectus.
6. Taxation of holders of Shares
(a) Hong Kong SAR
The sale, purchase and transfer of H Shares registered with our Hong Kong SAR branch
register of members will be subject to Hong Kong SAR stamp duty. The current rate charged
on each of the purchaser and seller is 0.1% of the consideration of or, if higher, of the fair
value of the H Shares being sold or transferred. For further details in relation to taxation,
please refer to Appendix III to this Prospectus.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-19 –


--- page 678 ---
(b) Consultation with professional advisors
Potential investors in the Global Offering are urged to consult their professional tax
advisors if they are in any doubt as to the taxation implications of subscribing for,
purchasing, holding or disposing of or dealing in our Shares (or exercising rights attached to
them). None of us, the Joint Sponsors, the Sponsor-Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, or any other person or party
involved in the Global Offering accept responsibility for any tax effects on, or liabilities of,
any person, resulting from the subscription, purchase, holding or disposal of, dealing in or
the exercise of any rights in relation to our Shares.
7. Qualification of experts
The following are the qualifications of the experts who have given opinion or advice which
are contained in this Prospectus:
Name Qualifications
China International Capital
Corporation Hong Kong Securities
Limited
A licensed corporation to conduct type 1 (dealing in
securities), type 2 (dealing in futures contracts),
type 4 (advising on securities), type 5 (advising on
futures contracts) and type 6 (advising on corporate
finance) regulated activities under the SFO
CMB International Capital Limited A licensed corporation to conduct type 1 (dealing in
securities) and type 6 (advising on corporate
finance) regulated activities under the SFO
Ernst & Y oung Certified public accountants
Registered Public Interest Entity Auditor
Beijing Kangda Law Firm PRC Legal Advisor to our Company
JunHe LLP Legal advisor of our Company as to PRC data
compliance matters
Lee and Li, Attorneys-at-Law Legal advisor of our Company as to local law of
Taiwan
Robertsons Legal advisor to our Company as to local Hong
Kong SAR law
Dentons Rodyk & Davidson LLP Legal advisor to our Company as to Singapore law
Al Tamimi & Company Legal advisor of our Company as to the law of the
Kingdom of Saudi Arabia
Shin & Kim LLC Legal advisor of our Company as to the law of
Korea
Anderson Mori & Tomotsune Legal advisor of our Company as to Japanese law
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-20 –


--- page 679 ---
Name Qualifications
SyCip Salazar Hernandez &
Gatmaitan
Legal advisor of our Company as to Philippines law
Christopher & Lee Ong Legal advisor of our Company as to Malaysian law
Weerawong, Chinnavat & Partners
Ltd.
Legal advisor of our Company as to the law of
Thailand
China Insights Industry Consultancy
Limited
Industry consultant
Ernst & Y oung (China) Advisory
Limited
Tax Advisor to our Company
8. Consents of experts
Each of the experts as referred to in “G. Other Information – 7. Qualification of Experts” in
this Appendix has given and has not withdrawn their respective written consents to the issue of
this Prospectus with the inclusion of their reports and/or letters and/or legal opinion (as the case
may be) and references to their names included in the form and context in which it respectively
appears.
None of the experts named above has any shareholding interests in our Company or any of
our subsidiaries or the right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for securities in our Company or any of our subsidiaries.
9. Bilingual Prospectus
The English language and Chinese language versions of this Prospectus are being published
separately in reliance on the exemption provided in section 4 of the Companies Ordinance
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter
32L of the Laws of Hong Kong).
This Prospectus is written in the English language and contains a Chinese translation for
information purpose only. Should there be any discrepancy between the English language of this
Prospectus and the Chinese translation, the English language version of this Prospectus shall
prevail.
10. Binding effect
This Prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions) of
sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so
far as applicable.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-21 –


--- page 680 ---
11. Miscellaneous
Save as disclosed in this Prospectus:
(a) within the two years preceding the date of this Prospectus, we have not issued nor
agreed to issue any share or loan capital fully or partly paid either for cash or for a
consideration other than cash;
(b) no share or loan capital of our Company, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) we have not issued nor agreed to issue any founder shares, management shares or
deferred shares;
(d) we have no outstanding convertible debt securities or debentures;
(e) within the two years immediately preceding the date of this Prospectus, no commission,
discount, brokerage or other special term has been granted in connection with the issue
or sale of any capital of our Company;
(f) there is no arrangements under which future dividends are waived or agreed to be
waived;
(g) there has been no interruptions in our business which may have or have had a
significant effect on the financial position in the last 12 months;
(h) save for the A Shares of our Company that are listed on the SZSE, none of the equity
and debt securities of our Company, if any, is listed or dealt with in any other stock
exchange nor is any listing or permission to deal being or proposed to be sought. We
currently do not intend to apply for the status of a Sino-foreign investment joint stock
limited company and do not expect to be subject to the PRC Sino-Foreign Joint V enture
Law; and
(i) our Directors confirm that, save for the expenses in connection with the Global
Offering, up to the date of this Prospectus, there has been no material adverse change in
the financial or trading position or prospects of our Group since December 31, 2023,
and there had been no events since December 31, 2023 which would materially affect
the information shown in our consolidated financial statements included in the
Accountant’s Report.
APPENDIX VI STA TUTORY AND GENERAL INFORMA TION
– VI-22 –


--- page 681 ---
A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this Prospectus delivered to the Registrar of Companies in
Hong Kong SAR for registration were, among other documents:
(a) the written consents referred to in “Statutory and General Information – G. Other
Information – 8. Consents of Experts” in Appendix VI; and
(b) a copy of each of the material contracts referred to in “Statutory and General Information –
B. Further Information about Our Business – 1. Summary of Material Contracts” in
Appendix VI.
B. DOCUMENTS A V AILABLE ON DISPLA Y
Copies of the following documents will be published on the Stock Exchange’s website at
www.hkexnews.hk and our Company’s website at www.jihong.cn up to and including the date which is
14 days from the date of this Prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report, the report on the reviewed financial information of the Group for
the three months ended 31 March 2025 and the report on the unaudited pro forma financial
information of our Group from Ernst & Y oung, the texts of which are set out in Appendices
IA, IB and II, respectively;
(c) the audited consolidated financial statements of our Group for each of the three years ended
December 31, 2022, 2023 and 2024;
(d) the material contracts referred to in the section headed “Appendix VI – Statutory and General
Information – B. Further Information about Our Business – 1. Summary of Material
Contracts” in this Prospectus;
(e) the service contracts referred to in the section headed “Appendix VI – Statutory and General
Information – C. Further Information about Our Directors and Substantial Shareholders – 2.
Particulars of Service Contracts” in this Prospectus;
(f) the written consents referred to in the section headed “Appendix VI – Statutory and General
Information – G. Other Information – 8. Consents of Experts” in this Prospectus;
(g) the industry report prepared by China Insights Industry Consultancy Limited, our industry
consultant;
(h) the legal opinion issued by Beijing Kangda Law Firm, our legal advisor as to PRC laws, in
respect of certain aspects of our Group and our property interests in Mainland China;
(i) the legal opinion issued by JunHe LLP , our legal advisor as to PRC data compliance, in
respect of certain PRC data compliance matters of our Group;
(j) the legal opinion issued by Lee and Li, Attorneys-at-Law, our legal advisor as to local law of
Taiwan;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLA Y
– VII-1 –


--- page 682 ---
(k) the legal opinion issued by Robertsons, our legal advisor as to local Hong Kong SAR law;
(l) the legal opinion issued by Dentons Rodyk & Davidson LLP , our legal advisor as to
Singapore law;
(m) the due diligence report issued by Al Tamimi & Company, our legal advisor as to the law of
the Kingdom of Saudi Arabia;
(n) the legal opinion issued by Shin & Kim LLC, our legal advisor as to Korean law;
(o) the legal opinion issued by Anderson Mori & Tomotsune, our legal advisor as to Japanese
law;
(p) the legal opinion issued by SyCip Salazar Hernandez & Gatmaitan, our legal advisor as to
Philippines law;
(q) the legal opinion issued by Christopher & Lee Ong, our legal advisor as to Malaysian law;
(r) the legal opinion issued by Weerawong, Chinnavat & Partners Ltd., our legal advisor as to
the law of Thailand;
(s) the direct and indirect tax reports issued by Ernst & Y oung (China) Advisory Limited, our tax
advisor; and
(t) the Company Law, the PRC Securities Law and the Trial Measures together with their
unofficial English translations.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLA Y
– VII-2 –


--- page 683 ---
XIAMEN JIHONG CO., LTD
ʮ̡
Stock Code: 2603
(a joint stock company incorporated in the People’s Republic of China with limited liability)
Joint Sponsors, Sponsor-Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL
OFFERING
	JOBMQIBCFUJDBMPSEFS
 XIAMEN JIHONG CO., LTD
